The Calorie Tax
We’ve spent a whole year talking about health care reform in our country but have spent very little time talking about lifestyle reform. As a calorie-watcher, I know how difficult it is to purchase the right kinds of foods. More nutritious foods are more expensive and don’t keep as long. The results of a new study are bound to raise some eyebrows, though:
A new study published in Psychological Science concludes that taxing foods is more effective in reducing consumption of unhealthy products than subsidizing healthy foods. Researchers at the University at Buffalo studied the purchasing habits of 42 mothers from different social economic backgrounds in a simulated grocery store by increasing the prices of unhealthy foods by “12.5%, and then by 25%” and discounting “the price of healthy foods comparably.”
The study found that “taxes were more effective in reducing calories purchased over subsides. Specifically, taxing unhealthy foods reduced overall calories purchased,” while “subsidizing the prices of healthy food actually increased overall calories purchased without changing the nutritional value at all. It appears that mothers took the money they saved on subsidized fruits and vegetables and treated the family to less healthy alternatives”:
Taxing foods had the dual benefit of reducing purchases of HCFN [High-Calorie-for-Nutrient] foods while increasing purchases of LCFN [Low-Calorie-for-Nutrient] foods with lower energy density. From a public-policy standpoint, this strategy had the additional benefit of generating significant tax revenue. If policymakers aim to reduce consumption of HCFN foods to control rising rates of obesity, then taxing these foods may be more effective than subsidizing LCFN foods. In our experiment, a tax that increased the price of HCFN foods by 10% reduced total calories purchased by 6.5%, as a result of a reduction in fat and carbohydrate calories of 12.8% and 6.2%, respectively.
People buy these high calorie foods because they taste good and because you get more calories for your dollar. I think food research has spent a lot more time researching what makes these kind of foods taste good because they get a lot of money out of processing a cheap commodity (corn) into a much more expensive food (twinkies, TV dinners). If only there had been as much research on making more nutritional foods taste as good. Personally, I think the craving for fat and sugar is probably an evolutionary adaptation – people who could store fat for longer period of times no doubt had significant advantages during times of feast and famine in the hunter-gatherer days.
I’m very hesitant to support a “calorie tax.” It is a regressive tax, it will punish poorer, less healthy people over richer, more healthy people. Of course, our society supports any number of “sin” taxes, like taxes on alcohol and cigarettes. Would a calorie tax just be following in the footsteps of these taxes?
YEs it is UI, but as someone who smokes, I’d like someone else to be targeted when the next round of sin taxes are raised 🙂
One of the things that might still get to a rebalancing of prices for calories would be eliminating the subsidies for corn, wheat, soy beans. These cheap commodities have made it alot easier for food manufacturers to create calorie dense (but not necessarily nutrient dense) foods for a very long time. Eliminate those subsidies and let the food markets really work — which would likely start to change what gets grown, reducing the amount of cheap corn, wheat and soy and increasing the raising of other types of food.
Corn, wheat, and soybeans are all healthy foods before they are processed. I don’t know if eliminating grain subsidies is a good thing or a bad thing, economically and policy-wise – that’s a different can of worms.
But in terms of taxing junk food, I think the tax belongs on the processed products at the manufacturer level – not in the supermarkets.
It would still get passed on as higher prices, anon.
Eliminate the subsidies and farmers won’t plant as much corn, wheat and soy for manufacturers to bathe your food in or it will increase the cost of bathing all of this food in plant byproducts which acts like a tax, but reduces incentives for more corn, wheat and say at all levels of the process.
Eliminate the subsidies and farmers will start evaluating the planting of crops that they can sell for a fair market price, since their government checks will be gone.
Eliminate the subsides,and you eliminate all of the incentives for excessive corn, wheat and soy production and make the raising of real food (or maybe cellulosic crops) much more competitive.
It would still get passed on as higher prices, anon.
Yes, that is sort of the point. It would ultimately reduce demand and hopefully divert the grain to more healthy products. But it is easier to administer a tax at the processor level.
I think grain subsidies are only partly related to the fat tax. Like I said, I am still not knowledgable enough about the economics of farming, so I am open-minded.
Grain production is a strategic industry, so the taxpayer has an interest in keeping it stable and healthy. On the other hand, it is not good policy to subsidize production of corn for secondary products like corn syrup, cattle feed, hydrogenated oils, and ethanol. It is that secondary level of food where the tax belongs. And maybe on the GM seeds and petroleum-based fertilizers as well.
It sucks to shovel direct cash payments to Big Ag. But from a strategic viewpoint, it is the US breadbasket, so it makes sense for the taxpayer to support certain things like irrigation and distribution facilities, and to regulate soil depleting activities.
Overproduction of grain is a strategic advantage to ADM and Cargill. Not to anyone else. And certainly not to the American taxpayer.
Once again I remind liberals and conservatives alike that taxing soft drinks — both sugared and artificially sweetened types — is good tax policy not because it will make people healthier, but because it is a luxury. It’s a very small luxury, yes — but nobody can argue that it’s a necessity. IF we cannot overcome the influence of a special interest as limited as soft-drink bottlers, we cannot overcome any special interest out there.
“Of course, our society supports any number of “sin” taxes, like taxes on alcohol and cigarettes. Would a calorie tax just be following in the footsteps of these taxes?”
No, because the poor don’t have to smoke or drink to live, but they do have to eat. Food is already absurdly expensive, especially for healthier products. That is why so many people live on hot dogs, bologna, and Ramen Noodles. Taxing these products will just mean that those who rely on them to live will simply go without. Not that same as someone just NEEDING that nicotine fix.