Arguments For and Against Junk Food and Soda Taxes

December 27th, 2009 by Jacob Rheuban
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The debate over junk food taxes is drawing increasing attention from both sides.  Continued debate over of the adverse health impacts of sugary drinks is coupled with heating debate over the propriety of a tax on a dietary pleasure — a pleasure some believe people have an unassailable right to partake in, but others find to be a health hazard.

Here are some recent arguments from vocal advocates on both sides of the debate:

Opponents

  • Americans Against Food Taxes has started a campaign urging citizens to petition politicians to oppose taxes on junk food. [1]  According to their website:

The coalition has twin primary aims: 1) To promote a healthy economy and healthy lifestyles by educating Americans about smart solutions that rely upon science, economic realities and common sense; and 2) To prevent the enactment of this regressive and discriminatory tax that will not teach our children how to have a healthy lifestyle, and will have no meaningful impact on child behavior or public health, but will have a negative impact on American families struggling in this economy.[2]

To support their stance that the tax would have no “meaningful impact on…public health” they site a variety of studies including one from the The Mercatus Center at George Mason University that Americans Against Food Taxes says finds “that any impact of a soft drink tax would be trivial because soft drink consumption is a relatively small part of the diet for overweight people.”  Further, they suggest that the financial impact of the tax could be excessively burdensome, particularly on the poor.  They also site an article in Obesity Reviews; 2005 suggesting that   “Overweight status was not associated with the intake of fruits, vegetables, and soft drinks….Increasing physical activity participation and decreasing television viewing [3] should be the focus of strategies aimed at preventing and treating overweight and obesity in youth.” [4]

The NY Times has suggested that the Americans Against Food Taxes is a front for the soft drink industry reporting that “Calls to a media contact listed on the site reach the American Beverage Association, an industry organization whose board is made up of top executives from the major soft drink manufacturers.”[5]

Proponents

  • Barry Popkin, a Professor in the Department of Nutrition at the University of North Carolina, has vocalized his advocacy of a junk food tax.  According to a recent Reuters article:

 

“Activity is not the solution – you can’t run off a Coke or an ice-cream cone or candy bar very easily – it takes a lot of exercise to offset an extra hundred calories,” he said.

The nutrition expert says the basic problem is that when people shift from drinking water or unsweetened tea and coffee to sugary drinks and juices, they don’t cut their food intake.

But since the biological mechanisms controlling thirst and hunger are separate, he says reducing calories by changing people’s drinking tastes – rather than chasing elusive ways to cut their eating – is a viable way of fighting fat. [6]

Popkin advocates a tax on sweetened drinks as a step towards changing the tastes of people away from sugary drinks.

  • The Institute of Medicine and National Research Council, in a report titled “Local Government Actions to Prevent Childhood Obesity”[7]  recommends implementing a “tax strategy to discourage consumption of foods and beverages that have minimal nutritional value, such as sugar-sweetened beverages”   [8]

 

  • New Mexico is facing a re-imposition of a food tax.  Think New Mexico, a think tank in the state, is advocating a junk food tax in lieu of a food tax, suggesting:

a junk-food tax would do some good. It would help combat New Mexico’s growing obesity crisis, which would reduce health care expenses over the long term.[9] [10]

 

A penny-per-ounce excise tax could reduce consumption of sugaredbeverages by more than 10%. It is difficult to imagine producingbehavior change of this magnitude through education alone, evenif government devoted massive resources to the task. In contrast,a sales tax on sugared drinks would generate considerable revenue,and as with the tax on tobacco, it could become a key tool inefforts to improve health.[11]

Summary of Arguments in Favor of and Against a Junk Food Tax

Below is an attempt to summarize the arguments coming from both sides of the debate.  Some of the arguments reflect conflicting beliefs on fundamental facts.[12]

Arguments in Favor of Junk Food Taxes

  1. Would help discourage consumption of unhealthy foods.
  • There is evidence that taxes on cigarettes reduced cigarette consumption.
  • Taxes will be more effective at discouraging consumption of junk food that education alone.
  1. Reduce the costs of treating medical issues to which junk food contributes.
  2. Generate additional revenue, part of which could be used to offset costs of treating medical issues that arise from over consumption of junk foods.
  3. Could shift consumer spending to healthier foods, bolstering the industries that produce those foods.

Arguments Against Junk Food Taxes

  1. The tax is unfair
  • A junk food tax is regressive
    • The tax is a sales tax and all sales taxes are regressive.
    • Lower income people either spend more money in total, or more money as a percentage of their total income, on junk food.
    1. The tax unfairly targets junk food.
    • It is difficult to accurately quantify how much various foods contribute to health problems and thus difficult to determine which foods should be classified as “junk food” and subject to taxation.
    • Among all potential unhealthy habits that people may enjoy, junk food would be unfairly singled out.
    1. Consumers have not expressed enough price sensitivity to junk food to conclude that a junk food tax would adequately dissuade consumption.
    2. Would distract from more important health agendas like educating people to make their own healthy dietary decisions.
    3. Would restrict the freedom of people to make their own dietary choices.
    4. Would hurt industries that create and sell the taxed foods, potentially costing jobs in those industries.
    5. American’s don’t want to pay more taxes.

Feel free to post additional arguments in the comments section.

The Balance

The opponents and proponents of the junk food tax seem to draw vastly different conclusions about the effect of sugary drinks on national health.  The level of contribution of sugary drinks to a variety of health problems impacting our nation may be subject to debate.  But if (1) junk food significantly adversely impacts health and (2) as a matter of social policy we want to disincentivize people from engaging in the unhealthy habit of consuming such foods [13], does Americans Against Food Taxes’ argument that the tax would cause an economic burden, particularly on the poor, necessarily condemn the tax?  Many disincentives from parking fines to cigarette taxes disproportionately impact lower income citizens without condemnation.  Is a junk food tax categorically different?

Citizens may simply feel that the freedom to make individual dietary selections is beyond the realm of appropriate government regulation?  One can debate the detrimental impact of certain junk foods and the potential (or lack of potential) positive impact that taxing them might have.  But if society believes that people have a right to cause and endure any detriment that might be caused by junk food, free of the influence of taxation, then the aforementioned debate may be moot.

On the other hand, why should junk food be exempt from sales tax while other pleasures rely on goods that are taxed?  Many states that have sales taxes have exempted groceries from sales taxes.[14]  One predominant policy for exempting groceries from sale taxes is that since groceries are necessities, lower income people are likely to spend a significant portion of their income on groceries and a tax on groceries is thus likely to be regressive.  To what extent does this policy hold true for sodas and other junk foods?  It might be true that spending on sodas represents a larger portion of income for the poor.  But are sodas and other junk food necessities?  What is the policy behind exempting sodas and other junk foods from sales tax while levying a tax on other pleasures such as cigarettes, DVDs and books?

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  1. http://www.votervoice.net/Core.aspx?AID=989&APP=GAC&IssueID=18593&SiteID=-1 []
  2. http://www.nofoodtaxes.com/about/ []
  3. Would Obesity Reviews choose a TV tax over a junk food tax? []
  4. http://www.nofoodtaxes.com/facts/ []
  5. http://www.nytimes.com/2009/09/17/business/17soda.html?_r=1 []
  6. http://www.reuters.com/article/idUSTRE5B843A20091210 []
  7. http://www.iom.edu/en/Reports/2009/ChildhoodObesityPreventionLocalGovernments.aspx []
  8. http://www.iom.edu/~/media/Files/Report%20Files/2009/ChildhoodObesityPreventionLocalGovernments/local%20govts%20obesity%20report%20brief%20FINAL%20for%20web.ashx []
  9. http://www.santafenewmexican.com/LocalColumnsViewpoints/Their-View-Tax-junk-food–not-fruits–vegetables-and-baby-food []
  10. The debate over junk food tax is often brought up as an expansion of taxation. However, with New Mexico facing a potential re-taxation of all foods, the concept of a junk food tax would represent a limitation on proposed taxation. This shifting context of the discussion likely impacts peoples’ views on the issue. []
  11. http://content.nejm.org/cgi/content/full/360/18/1805 []
  12. For example, there is some dispute about the impact that sodas have on obesity and the impact that a tax would have on soda consumption. []
  13. Whether or not there is a legitimate public interest in regulating individual self-destructive behavior is subject to debate.  See the discussion of junk food tax here []
  14. http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States []
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