NY Times: Taxing Junk Food to Save Lives and Money

The Sunday New York Times ran this story on how taxing junk food and soda pop could significantly reduce the rising rates of obesity and diabetes among Americans.  And by taxing junk food, not only would we reduce these serious health risks but at the same time, be able to raise revenues and save lives.  The story compares the effort with the high sin taxes affixed to tobacco which has resulted in a dramatic drop in smoking and lung cancer deaths in American since 1970. The Times suggests a tax of 20 percent on sugary drinks and junk food will cut consumption by 20 percent and save taxpayers as much as $30 billion in healthcare costs related to treated obestity and diabetes.

This can be done even at the City level and currently, there are at least 30 cities and states considering taxes on soda or all sugar-sweetened beverages.  Americans, on average, consume 278 additional calories daily since 1977 and more than 40 percent of that came from soda, and sweetened drinks like Kool-Aid and Crystal Light, as well as energy drinks like Red Bull and Gatorade.  Even the brand Vitamin Water as about half the sugar of a serving of Coca-Cola.  In some states, soda carries a sales tax but there are measures to turn this into an excise taxes, which is levied before purchase.

From the article: “Yet the food industry appears incapable of marketing healthier foods. And whether its leaders are confused or just stalling doesn’t matter, because the fixes are not really their problem. Their mission is not public health but profit, so they’ll continue to sell the health-damaging food that’s most profitable, until the market or another force skews things otherwise. That “other force” should be the federal government, fulfilling its role as an agent of the public good and establishing a bold national fix.

Rather than subsidizing the production of unhealthful foods, we should turn the tables and tax things like soda, French fries, doughnuts and hyperprocessed snacks. The resulting income should be earmarked for a program that encourages a sound diet for Americans by making healthy food more affordable and widely available.

The average American consumes 44.7 gallons of soft drinks annually. (Although that includes diet sodas, it does not include noncarbonated sweetened beverages, which add up to at least 17 gallons a person per year.) Sweetened drinks could be taxed at 2 cents per ounce, so a six-pack of Pepsi would cost $1.44 more than it does now. An equivalent tax on fries might be 50 cents per serving; a quarter extra for a doughnut. (We have experts who can figure out how “bad” a food should be to qualify, and what the rate should be; right now they’re busy calculating ethanol subsidies. Diet sodas would not be taxed.)

Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

We could sell those staples cheap — let’s say for 50 cents a pound — and almost everywhere: drugstores, street corners, convenience stores, bodegas, supermarkets, liquor stores, even schools, libraries and other community centers.”

California has the nation’s best fruit and vegetable industry, and is often called the salad bowl of America.  Additional revenues to help cut costs of produce to consumers while offsetting costs to farmers and the fresh produce transportation and distribution methods would be an asset to this industry while helping Americans eat heathier food.  It worked for the tobacco industry as smoking rates have declined to half what they were in 1970.

And for the nanny-state naysayers, your rights to drink Red Bull are not infringed anymore than your right to smoke is; but it could cost you more.