Food and Beverage Taxes Cynical Revenue-Raisers

The phrase about Washington these days is “fiscal cliff,” and like they did during the 2009 debate over health insurance reform proposals, food activists are attaching themselves like leeches to it in the hopes of getting their pet projects passed. Sure enough, the food Puritans at the Center for Science in the Public Interest have called on Congress and the President to pass a soda tax. But even in progressive California, voters have rejected soda taxes by overwhelming margins.

Former Treasury Secretary Lawrence Summers also thinks that taxing “junk food” is a good idea. Of course, the Danes found out that trying to define and tax “fatty” foods was extremely difficult, not to mention a great way to enrich shopkeepers in bordering Germany. With approximately 38,000 items in the typical grocery store, such a scheme wouldn’t be any easier in America.

Fundamentally, food taxes are all about fattening government coffers, not fighting obesity. Rigorous estimates of soda tax effects on calorie consumption range from effectively zero to less than one percent of a daily intake. That’s not nearly enough to make a dent in obesity rates.

Soda and fat taxes are unpopular policies, administrative nightmares, and ineffective at fighting obesity. No wonder the penny-per-ounce levy — which although marketed to sound small is actually higher than any state beer tax — has failed everywhere it has been proposed. With over 60 percent opposition to soda taxes in recent national polling, there’s no reason to think the Feds will be first off the tax cliff this time.

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