A proposal by Massachusetts Governor Deval Patrick to levy a 5 percent surcharge tax on sugar-laden snacks and beverages, pitched by his office as “a critical first step in discouraging the consumption of these empty calories,” has raised again some basic questions about the wisdom and practicality of imposing “sin taxes” to reduce the public’s usage of certain commodities. A quick review of some of them, with attempts at answers.

Isn’t this just another revenue-raising scheme disguised as a health issue?

True to some extent; even the Massachusetts public health commissioner admitted that the primary goal of the tax is to provide money to state coffers. But that money, which is expected to run more than $40 million a year, will be used to fund public health services, some of which will probably involve weight-reduction programs.

Will it actually motivate people to consume fewer sodas and candy bars and the like?

Ordinarily, the answer would be “not much,” and not enough to significantly lower the state’s obesity numbers. There are already 33 states that charge sales taxes on soft drinks or candy, mostly around 4 to 6 percent, and studies of the sales charts indicate that those amounts are too small to put a meaningful dent in public consumption.

To really accomplish that, take a leaf from the imposition of cigarette taxes, which did in fact cut into tobacco sales because of their sheer size of the taxes, which often amounted to $2 or more per pack. A Harvard experiment found that, given a big enough tax on sugary sodas — in that case, 35 percent — sales thereof tanked by fully 20 percent, even as sales of non-taxed diet sodas rose.

So why not make it a 35 percent tax?

Because no legislature would ever go for something that draconian. First, it’s hard to sell the premise that Cokes and Hershey bars are cigarette-level health hazards and legitimate targets for hypertaxing. Second, it’s hard to sell any tax increases whatsoever during a Recession of a Lifetime; 5 percent is as much as Governor Patrick thought he could get away with.

But the economic downturn may change the basic math, here. For the same financial reasons that a large tax is out of the question, a small tax may actually gain some clout. Sure, another 5 percent won’t change people’s behavior under normal economic conditions, but at a time when people have begun raising their own vegetables and cutting their kids’ hair to save a few bucks, an extra nickel per soda or Snickers bar might get a lot of people rethinking that impulse purchase.

It might also mean that any tax at all would be politically unacceptable right now.

Then we might give some thought to the Australian Variation, where they’re calling for the tax on low-alcohol beer to be abolished, as an incentive for the notoriously thirsty Aussies to cut their overall alcohol intake.

An American adaptation of that might have those states that currently tax food products eliminate the tax for low-fat, low-cal, low-sugar dietary soft drinks, candy, snack foods and so forth. Write or e-mail your legislator. (Ironically, the proposed Massachusetts law would tax both regular and diet items equally. Tsk tsk. Back to the drawing board, Governor.)

(By Robert S. Wieder for CalorieLab Calorie Counter News)

Subscribe to our RSS feed | Weekly e-mail updates | Follow us on Twitter

This entry was posted on Friday, February 27th, 2009 and is filed under Beverages, Food miscellaneous, Public policy. You can skip to the end and leave a response. Pinging is currently not allowed. Permalink.