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Faced with an enormous $15 billion budget deficit in the middle of a recessionary economy, New York State Gov. David Patterson yesterday a broad series of tax increases, some of which could affect food retailers and manufacturers.

Among them, a 15 percent tax of sugared soft drinks and other beverages, which was couched as an “obesity tax” that would simultaneously put money in the public coffers while discouraging the consumption of products that are accused of making people – especially children – dangerously overweight. Diet drinks would not be affected.

The American Beverage Association (ABA) has blasted the proposal as a “money grab.” Kevin Keane, the ABA’s senior vice president of public affairs, said yesterday, “We think that everybody has to keep in mind that we're in a recession, and in an economy like this, the last thing we should be doing is raising taxes on everyday needs like clothing and groceries. That doesn't wash with the consumer. This has the potential to affect the consumer's checkbook, as well as paychecks. Every time you raise taxes on an industry's product, you put jobs at risk. It's a double whammy.”

One other result of New York State’s fiscal problem … According to the Albany Times Union, is that New York could become the 36th state in the nation to allow the sale of wine in supermarkets – a move that Gov. Patterson estimates could generate between $100 million and $200 million in licensing fees from supermarkets.

KC's View:
It probably is fair to say that Gov. Patterson’s proposals are going to get at least as much scrutiny as the parody of him that was on “Saturday Night Live” last weekend.

There is a logical disconnect in the tax on sugared drinks. After all, if the government needs to raise money…is the best way to do so the institution of a tax that is designed to drive down consumption, and therefore drive down tax revenues?

I do love the idea of allowing wine sales in supermarkets, though. It will be good for retailers and good for consumers, creating a new energy in stores.

I have to admit that I am less enamored of the proposed “iPod tax,” which would charge state and local taxes for “digitally delivered entertainment services,” including music bought from iTunes and books bought for the Kindle. Guess I won’t be moving to NY anytime soon…