Junk food tax is junk policy
January 15, 2010
Junk food tax, fast-food tax, fat tax, soda tax, candy tax-by any name, the only thing these taxes succeed in making slimmer is your pocketbook.
That's something Washingtonians may discover if the legislature succeeds in passing a new tax on "unhealthy" food.
A CBS poll published Jan. 8 showed that although most Americans want to be healthier and lose weight, 60 percent oppose taxing so-called junk foods. Unfortunately, the public's opposition has not stopped some policymakers and special interests from implementing taxes to discourage people from eating foods the "experts" deem unhealthy.
Starting in March, Romania will become the first country to place a nationwide tax on any food or beverage the government claims is unhealthy. In the United States, 33 states currently tax soft drinks, and 15 tax candy at a higher rate than other products. Cities are considering similar taxes.
One reason for the public opposition to these taxes is that the money is all too often diverted from its stated purposes to pay for unassociated increases in government spending. These taxes are nothing more than yet another attempt by government officials to grab more money from taxpayers, under the pretense of enhancing public health.
A study by the Mercatus Center explains, "Taxes on sugar-sweetened soft drinks do not necessarily advance the overall public interest, may be regressive in nature, and hardly ever work as intended."
Regardless of whether you believe government should force people to eat what contemporary experts say is healthiest, we can all agree that any government actions in this regard should actually work. If they don't, they shouldn't be implemented. Yet even health-oriented advocates of such taxes readily admit fat taxes will have few if any health benefits unless set extremely high, which creates a whole host of new problems. Although some people might quit drinking or eating these newly taxed products, they'll probably just begin consuming an alternative calorie-filled product that isn't taxed as highly.
Thus the 2007 study Cheap Donuts and Expensive Broccoli: The Effect of Relative Prices on Obesity found, "the sensitivity of individuals to relative food prices is too small for fat taxes to have much of an effect, at least in reasonable ranges of tax rates. For example, a 100 percent tax on unhealthful foods would reduce average BMI by less than 1 percent, according to our results."
Singling out certain products as sinful and placing draconian taxes on them is an ineffective health policy and even worse tax policy. The definition of what is healthy tends to be arbitrary and creates absurd anomalies: Illinois taxes a Twix bar as food while taxing yogurt-covered fruit as candy. These taxes also unduly punish low- and moderate-income people, as they consume higher quantities of these products in relation to their overall income.
Local, state and federal officials should focus on trimming their own budgetary belts instead of taking more money from citizens who eat the occasional cheeseburger or drink an occasional soda.
- John Nothdurft is the budget
and tax legislative specialist
for The Heartland Institute