Philadelphia is expected to pass a city-wide tax on soda this week. It’s unclear exactly where these funds will go. The potential tax money was originally marketed as a way to increase dollars for kids, mostly in the form of more pre-K programs, but recently the mayor announced the money will balance the city budget. In the Washington Post, New York University professor Marion Nestle, was quoted as saying, “This is a fabulous way to get revenue for revenue-starved cities.” Hilary Clinton is in full support of sugar taxes, however Bernie Sanders feels that the tax would unfairly burden the poor.
Taxing Sins
With the cigarette tax, many people might say, “Well good, people shouldn’t smoke, so let those smokers pay the tax and maybe it will encourage them to stop smoking and be healthier.”
Most people don’t pay much attention to issues when the rules are in their favor – but what happens when the political winds shift?
The Gas Tax
The US federal government makes about 18.40 in cents per gallon, and states average 26.50. The number is higher for diesel fuel at 24.40 at the federal level and 27.24 at the state level. That’s a lot of money! Simply put, if the government is making so much money off our use of gasoline, do you think it’s in their best interest to reduce our dependence on gasoline?
The Sugar Tax
Currently, the US government subsidizes the sugar industry with our tax money. This practice ends up making sugar in America nearly twice the price of sugar on the global market. Maybe you think it’s not so bad that sugar is expensive to consumers, because it’s bad for us anyway… But, because sugar is so expensive, many corporations have moved their production oversees. The government also limits imports of cheaper sugar. One study found that if these systems ended, consumers would save 2.9 to 3.5 billion dollars by sugar prices falling by roughly one third. That study also found that eliminating the sugar subsidies would result in 17,000 to 20,000 more US jobs. So, if we do enact a sugar tax, doesn’t it make sense to first end sugar subsidies?
Now, maybe you still don’t care about sugar. You think, “I’m paleo and I don’t eat sugar, so it doesn’t matter to me.” Welp, what happens when the government decides that fat should be taxed?
The Fat Tax
Denmark introduced a “Fat Tax” in 2001, which taxed oils, pizza, milk and butter. The government quickly eliminated this tax only one year later, after realizing that this tax had unintended consequences. The price of every day food items went up, residents were traveling into neighboring countries to shop, it was a huge administrative nightmare, and it didn’t change eating habits. Because of all of this, Denmark also cancelled plans to introduce a sugar tax. Berkeley, California had a sugar tax, which failed in very similar ways.
The Power of the Retailer
I used to work for Whole Foods Market, a company that is quite smart about marketing. One of my jobs was to design product displays. The most powerful product selling tools are at the end-of-aisles, which the industry calls “end-caps”. Product end-cap displays increase sales up to 50%. The fact is, if retailers want to sell soda, they know how to do it. Do you think adding a few cent sugar tax on the soda will override retailer discounts and in-store marketing?
We are Reducing our Sugar Consumption Without a Sugar Tax
In 2015, total soda sales declined 1.2%, which is much faster than the 0.9% decline in 2009. Furthermore, annual per capital carbonated soft drinks dropped to about 650 eight-ounce servings in 2015, which is the lowest number since 1985. Ouch, yes – that’s about 1.8 sodas per person PER DAY. But hey, everything is healthy in moderation, right?
image credit: businessinsider.com
Why Food Freedom Matters
So maybe you still don’t care about sugar, gas, cigarettes, or soda. The important thing to think about is: what tax could be coming next to Americans? A fat tax? What about the increasing vilification of red meat? Could we have a meat tax? I could totally see that coming. How about a tax on bacon? What would happen if they did that?
Do we need the government telling us what is “healthy food” and taxing “unhealthy food”?
The Farm-to-Consumer Legal Defense Fund
One organization that I strongly support is the Farm to Consumer Legal Defense Fund. If you eat, then I recommend you consider supporting them. These guys protect the rights of farmers, homesteaders, artisan food producers, and consumers all looking to engage in direct commerce. Farmers should be able to sell their products to consumers, and consumers should be able to purchase the food of their choice without the government imposing taxes “because it’s in our own best interest”. The FTCLDF is a true grassroots organization and receives no government funding.
At this year’s PaleoFx, I sat on the “Why Food Freedom Matters” panel. For the first time, I saw a PACKED ROOM for a talk on food politics! During the talk, Robb suggested that everyone in the audience join the FTCLDF, and guess what, it worked! Membership at an event has never been stronger for them. If you’re not already a member, then join today.
The Food Freedom Fundraiser
If you’ve seen any of the dozens of food documentaries that have come out in recent years, then you’re probably familiar with Joel Salatin, the owner of Polyface Farms. Joel is a huge supporter of the FTCLDF and is hosting a tour of Polyface on Saturday, August 20th. The next morning, myself, Joel Salatin, Robb Wolf, Dallas Hartwig, and Charles Mayfield will all be at the “Ancestral Health Connection”. We’ll be speaking about health and connecting to our food, then offering 15-minute “ask me anything” sessions for the rest of the morning. This is a truly unique opportunity to sit down with one of us. Ask me nutrition questions, have Charles view your squat form, chat with Dallas about his favorite books, or play Parcheesi with Robb. Buy your tickets here.
Let’s protect our right to buy food from the producers of our choice, and protect farmers who are trying to produce nutrient-dense food. Do we need the government deciding which foods are “healthy” for us?
Do you want a bacon tax?
What are your thoughts? Do you have an opinion, or better yet, a solution? Let’s hear it!
Aren’t we already subsidizing the production of sugar and HFCS to keep prices artificially low? Why not just get rid of that rather than paying for both production and consumption?
And they are also making a lot of money on the management of the long term health consequences of a diet high in sugar…
(Almost) everybody wants to grab the reins of govt power and force everybody else to do their bidding or what they think is right. The whole concept is immoral, of course. How about we continue having voluntary transactions/relationships between people and use rational arguments and persuasion to enlighten others and not continue down the road of more and more force.to (supposedly) fix society’s ills? I know, what a radical concept.
Oh yeah, one more thing. Keep telling it like it is and delivering the truth, Diana and Robb!
“Currently, the US government subsidizes the sugar industry with our tax money. This practice ends up making sugar in America nearly twice the price of sugar on the global market.”
I’m confused. I thought that subsidies made commodities _less_ expensive.
“Berkeley, California had a sugar tax, which failed in very similar ways.”
The Berkeley sugar tax “failed” because it was imposed on distributors, who simply absorbed the tax and didn’t pass it on to consumers.
I explained in the article and gave back up references on how the sugar subsidies end up making the price higher. Here’s that paper.
The Berkeley sugar tax failed for several reasons, and had no impact on sugar consumption. Here is that study, which I referenced in the article.
Legislation is often MARKETED to benefit kids or some other vulnerable population, and the long-term, net effect is a decrease in funds for that group.
What if all subsidies on commodities ended (agriculture, petroleum, etc)? Maybe we’d see a lot more pasture.
Are you taking Philadelphia into account at all? That chart you reference comparing water to soda, what context is that, does it look at region, county or city specifically or is that just a cumulative average? Do you know that Philadelphia has a $2 tax on every pack of cigarettes and the sale of cigarettes has dramatically declined in this city? Do you know that colorado taxes upwards of 13% for marijuana and has earned the state millions of dollars to invest? The money earned for a potential $0.18 increase to a can of soda is monumental in being able to help relieve 26% (highest in the country) below poverty line communities by putting that money intentionally back into those communities. Your fear a soda tax as a spring board of government regulations sound like political propaganda and fear mongering rather then seeing the context of the overwhelming soft drink consumption in lower income areas that absolutely contribute to poor health. The real concern is how Philadelphia government will handle where the money goes, but taxing soda is not the worse thing this city has come up with….. nor was taxing cigarettes. By the way, the war on Fat has long been here, fat free this and that….. education is the real means.
That chart was US consumption, as clearly labeled in the chart, and I also referenced this article http://fortune.com/2016/03/29/soda-sales-drop-11th-year/
I’m not sure, but I’m guessing that a tax on weed is not going to cut down on weed consumption. I haven’t looked at the numbers. Education is what reduces consumption. When the government makes a lot of money on taxing things like pot, then it’s really not in their best interest to reduce consumption. The US government has failed miserably at dietary education. Taxing a “bad” product may appear to be a good idea, until things change and that food YOU consider healthy could be taxed because it’s “bad”. At the very least, subsidizing an item then taxing it seems like a strange practice.
I am much more in favor of voluntary taxes than I am of involuntary ones. The gas tax is a great example, because the money from the gas taxes gets used to build roads, so it directly correlates. If a tax on sugar purchase is enforced and it goes toward healthcare and lowers my liability to cover others peoples poor decisions, then I am all for it. We pay for the consupmtion of sugar in rising health costs whether we consume it or not, this would balance things out a little, if the funds were appropriated properly.
This tax is afterall on the sale of sugar, not the consumption and you can feel free to make your own sugar or sugary foods without paying the tax.
The point made in the article as to the fact that there was no indication of how these tax dollars will be spent, on the other hand, makes this tax nothing more than robbery.
Persoanlly I believe all taxes should be voluntary and appropriated based on the source of the revenue.
How would you feel if steak or bacon were considered as bad as sugar and were also taxed?
Great post, Diana! People should be free to make their own choices about food. Taxes and subsidies just complicate the issue in my opinion. I’ll continue to shop for the highest quality food, and hope that there is no tax imposed on pastured meat or organic, locally grown greens.
You seem very smart, but not so informed on economics. Tobacco, alcohol, sugar, carbon etc all produce what are called “externalities.” An externality is a social cost imposed on society which is not included in the transaction, for example consumers of sugar put more strain on the healthcare system and so its efficient to tax Sugar to A) discouraged the behavior and B) to raise revenue to pay for said social costs. This kind of tax is what’s called a “Pigouvian tax” and is shown to increase economic efficiency as well as overall social outcomes. A similar tax on Carbon is well overdue, and is overwhelmingly supported by the majority of both climate and economic scientists.
This whole post reads like it was designed to terrify people who never went to college and maybe watch a bit too much fox news, ie industry propaganda.