How Lobbyists Made the Soda Tax Fall Flat: A Timeless Tale

When we reported on the State Assembly's proposal to add another dollar tax onto cigarettes, making New York's tax the highest state in the land, some wondered, "Why the F can't politicians stand up to the beverage companies and tax soda a meager $.10?" But standing up doesn't really pay in Albany, where you can just keep your seat by taking big campaign contributions from lobbyists. Today the Daily News looks at how the soda tax sausage got unmade, thanks in no small part to State Senator Jeffrey Klein (D-Bronx/Westchester).

According to public records reviewed by the News, "Klein has accepted at least $36,000 in campaign contributions from drink companies and special interest groups tied to the beverage industry since the tax was proposed in December 2008." One source tells the tabloid, "Klein has been instrumental in getting the soda tax off the table. He and the other senators from Westchester were louder than others." Tellingly, Klein was for the soda tax before he was against it, seeing it as a way to generate revenue for property tax relief programs and cut obesity rates. But at some point he changed his tune. It's unclear if that had anything to do with the big dumptruck of money lobbyists parked at his office.

The American Beverage Association spent nearly $900,000 on lobbying in New York last year, up from zero dollars in 2008, the News reports. Of course, correlation does not imply causation! It could very well be that Klein is truly trying "to protect good jobs" in the beverage industry, because if a penny-per-ounce soda tax became law, surely consumers would simply stop drinking the crap, forcing Coke and Pepsi to downsize. It could also be that Klein is just like all the other bought-and-paid-for politicians in America, where this kind of conduct is perfectly legal.

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By John Del Signore in Food on March 26, 2010 11:12 AM

Comments [rss]

ChampionOfTheSun

I don't smoke or drink soda, but if the government decides to pay for healthcare for every American, then I'd be ok with them taxes soda and cigarettes. Until then, it's bullshit.

Think2wice

Albany whores.

jgonzz

This tax was dumb idea. Saying it was an effort to help 'fat kids' is hilarious. You got a fat kid? Deal with it. It ain't the 'evil soda companies' working their magic on your kid's expanding waistline.

A lot of other beverages had similar or greater carb amounts than coke/pepsi/pibb/etc but were going to not be affected by this new tax.

Kevin Walsh

>>>some wondered, "Why the F can't politicians stand up to the beverage companies and tax soda a meager $.10?"

And some others wonder why politicians are suddenly jonesing to tax everything we ingest.

www.forgotten-ny.com

Telephone 280

I forgot how much I liked soda, until this tax threat came up, and I'm now enjoying it regularly again. And just in time for REAL sugar Kosher Coke season. Amazing stuff!

snickerdoodle

The "sin taxes" have got to stop. Instead of taxing people to death it's time for government to reign in their overspending and learn how to love a budget.

FelixtheCat & Christine Quinn'

sin taxes leads to cost that the public end up paying while the corporate heads reaps the profits

FelixtheCat & Christine Quinn'

i meant sin taxes are good since the cost of these products are paid by the public and the corporate heads are the only ones to reap the benefits. In reality, it isn't a tax since it is avoidable, you chose to buy the soda

CaptainWillard

You are right, I CHOOSE to buy soda... Why? Because I like it. It's what I live on. I don't like water (makes me nauseous), and I don't drink juice often either (I get heartburn from OJ)... However, I drink bottles and bottle of soda daily... And yet, *shockshock* I'm about 30 pounds UNDERWIGHT... So explain to me again why I have to pay this tax?

FelixtheCat & Christine Quinn'

I highly doubt that you drink so much soda and you're underweight. Just making it up.

ides_of_march

Unfortunately, most of the people in government have zero real world business experience; never had to create and sell a product, never had to meet a payroll, never had to answer to shareholders. They're free to flush money down the pan - it's easy to do when it's money you didn't actually earn - and Joe Taxpayer has no choice but to cough up some more. Not exactly a recipe for fiscal responsibility.

Stewart

You know what's a drain on the economy? Lower productivity due to people wasting time at lifestyle blogs. We can't get citizens to consume less internet content, so let's tax it.

I think there should be a blog tax, let's say $0.10 for every post that someone reads. That way, there will be less consumption which will lead to higher productivity (both are good for society) plus there will be more revenue for Albany.

Sure it would decrease traffic to sites like gothamist, which would decrease ad revenue and probably lead to a couple of people being laid off, but it's for the good society so suck it up folks. Take one for the team.

krinkle cut fires

It always makes me sad to find out just how little it costs these companies to derail regulation. $900,000?! That is probably what Coca Cola makes on an overcast afternoon in Central Park.

I feel like it should cost a minimum of $10million to lobby/bribe a state and $50million to lobby/bribe the federal government, but thats just me.

kissel

i am glad this effort died. i dont even drink soda, but i am glad that this is one less revenue grab this state will have. the taxes are so damn high here, we get very little for them (considering the cost differential we pay for the services we have) and our beloved politicians refuse to even consider cuts to the budget - they raised the damn budget 10% last year fully knowing the state was in trouble expecting the tax payer to make up the difference, and they still refuse to take a look in the mirror before picking our pockets for more.

Stevennnn

It's not any secret corporations are the ones who are running america not the people in Washington or the states.

BDS=(Boycott.Divest.Sanction)

you make it sound like theres one side to the issue.

You dont mind picking on the people who drink soda, so you want to tax them .10 cents.

I dont like people who hoard billions of dollars in wealth. I say we tax some of the real estate scions in nyc who can afford a pinch to their budget more than the average person can.

Which is better? The former will happen all the time, new taxes, congestion pricing, the latter, aggressively taxing the wealthy, the top 1%....that NEVER happens. Why?

why don't we have public referendums and let the public decide on what to tax?

Imagine that. Imagine direct democracy! People voting directly for they believe in. Never. never. they'll let us have guns, they tell us we have the freedom to smoke till we get cancer, the freedom to have to pay for our own health insurance.

we can have all those kinds of freedom, but they'll never give up the real power to control our lives thru government. never. never. never.

J.d.

"the latter, aggressively taxing the wealthy, the top 1%....that NEVER happens. Why?"

Well, A) lobbying. But also B), because there aren't actually all that many of the super-rich, not compared to the middle class, so the amount you can get that way is limited. Also, the wealthy have more access to accountants and financial planners who can help them structure their wealth so as to avoid the taxes. Also, believe it or not, the wealthy are not just impassive lumps that willsit there while you treat them like an inexhaustible resource; raise taxes and they may decide to look for a more friendly climate elsewhere, taking their wealth with them. I realize that "soak the rich" always sounds like a good plan, but you may remember this story about a goose and some golden eggs...

BDS=(Boycott.Divest.Sanction)

another reason we dont see policticans pushing to tax the rich is that they're all Millionaires themselves!

http://www.cnn.com/2003/ALLPOLITICS/06/13/senators.finances/

Even without high taxes, the rich already are transfering their wealth out of America. All this industry in China and India that now American workers are told we have to compete with, wouldnt have existsed if US tax law didnt make it so easy for multinationals to avoid taxes here by investing abroad.

The money is leaving the US already, the money to pay for services is being put on the backs of working joe-schmos.

the root of it, I believe, is that we don't have a functioning democracy. The goverment acts in the interests of the few with money and an infantile public feels pacified and involved reading and arguing about 'politics' in the paper. Thats just the way it is.

lately, seeing people manipulated into be rabidly against having healthcare for themselves doesnt make me optimistic for the future.

Billiamsburg

???

there's a middle class now? There's certainly more money to be gotten from the 1% than the other 99%. In the 1950's we taxed the rich around 91%. (http://www.truthandpolitics.or...

They didn't all 'flee' the country then. And we had a middle class then. And a thriving economy.