Dec 172009
 
Authors: Ian Bezek

Gov. Ritter’s proposal to tax candy and soft drinks in Colorado may have good intentions, but it is a terribly misguided plan that will, if enacted, backfire.

On the surface, the benefits of a so-called junk food tax make sense. The state of Colorado is cash-starved, so what better way to feed itself than by taxing unhealthy foods and beverages?

The Collegian’s Our View today does a good job of explaining the case for this new tax. But, it should be noted, the editorial board doesn’t always unanimously decide what Our View will be, and in today’s case, I vehemently disagree with the majority of my fellow board members.

While junk food taxes appear to make sense, results of these sorts of taxes so far have been poor. More than half of American states have already enacted a soda tax, for example, and yet the states with these taxes continue to have the highest rates of obesity.

In fact, the five most obese states all have soda taxes, while America’s leanest states (Colorado is the thinnest of all) do not have soda taxes.

Furthermore, studies have found that consumption of soda has barely budged in states with soda taxes. Researchers speculate that a soda tax would have to charge at least a penny per ounce to actually impact consumer’s behavior — and the idea of raising the price of a two-liter of soda by 67 cents is politically unacceptable.

Since the demand for soda and candy is very inelastic, taxation doesn’t actually reduce the consumption of these goods to any significant degree unless the level of taxation is so high as to make people be unable to afford them at all.

With that in mind, it’s obvious why these so-called “sin taxes” don’t actually reduce the consumption of whatever evil it is the government is “protecting” us from. Alcohol, cigarettes and gambling continue to be spent on in large quantities despite punitive levels of taxation on these “sinful” products.

So what effect do taxes on candy and soda have? As we’ve seen, they can’t effectively fight obesity to any significant degree, just as taxing alcohol has not fixed the drunk driving epidemic or made alcoholics go dry.

Instead, these taxes are a backhanded way to get the poor to pay up. As always, when studying politics, you must follow the money. In this case, the money generated by this tax comes from the predominantly poor consumers who enjoy candy and cola.

It isn’t wealthy people who are going to 7-Elevens to buy some Skittles and a Coke. They’re too busy eating $2 bagels and drinking $4 mochas over at Starbucks.

Cola and candy are inferior products. The upper class consumes far less of them, as they have better options, so the brunt of these taxes will fall on the poor. Will some of these poor consumers switch to other sorts of healthier products if taxes on cola rise? Perhaps, but I doubt I’m going to see poor folks lining up at Whole Foods to pay three bucks for a quart of organic grapefruit juice.

The simple fact is that people like unhealthy food, and government action can’t change that. That the government would target the unhealthy products primarily consumed by poor people isn’t surprising, since the government always makes a big deal about standing up for the little guy and then sticks him in areas where he doesn’t see it coming.

This tax wouldn’t be so bad in and of itself. Cola and candy aren’t particularly beneficial products.

But it sets a precedent that the government should be watching over your kitchen, making sure you eat wisely. It sets the stage for them to tax deserts, whole milk, red meat and who knows what else.

If consumers wanted to buy broccoli, we’d buy broccoli. We don’t need the government to tell us what to eat.

It’s disappointing that the Collegian editorial board, which frequently and correctly reminds us not to let the government regulate what we do in the privacy of our bedroom, has no problem with the government watching over our pantries.

Editorials editor Ian Bezek is a senior economics major. His column appears Mondays in the Collegian. Letters and feedback can be sent to letters@collegian.com.

 Posted by at 6:33 am

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