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The Bad Food Tax

July 25, 2011

There’s an interesting op-ed article in today’s New York Times. The author, Mark Bittman, is proposing that we tax bad foods to the point where people will naturally select healthy food because they will be subsidized and cheap.

He has lots of statistics to back him up, and if you’re someone like me who reads this kind of thing widely, nothing surprised me. Of course Americans eat crappy food and it’s terrible for our bodies. We know that, it’s old news.

And we all want to know how to fix this- clearly education about nutrition isn’t doing the trick by itself. And I’m the first person who would love to use quantitative methods to solve a really important, big problem. Moreover, if we start to get rid of the evil farm subsidies that are currently creating a ridiculous market for corn sugar (a major reason we have some much soda on the shelves at such low prices to begin with) as well as screwing up the farmers in Africa and other places, that will be a good thing.

Unfortunately, I really think his tax plan stinks. The main problem is something he actually brings up and dismisses- namely:

Some advocates for the poor say taxes like these are unfair because low-income people pay a higher percentage of their income for food and would find it more difficult to buy soda or junk. But since poor people suffer disproportionately from the cost of high-quality, fresh foods, subsidizing those foods would be particularly beneficial to them.

Yes they would, if they could actually buy them in their neighborhood! If he has the idea that the reason poor people buy crappy food is because they go into their neighborhood grocery store with a museum-like display of fresh fruits and vegetables, bypass those foods (because they are too expensive) to go straight to the back and find junk, then I guess his plan would make sense. Unfortunately the truth is, there is no fresh fruit at most of the food stores in poor urban areas – they are typically small and carry long-lasting packaged goods and groceries, from canned evaporated milk to diapers, and don’t have extra space. Moreover, I don’t think a pure price comparison is going to convince them to carry fruit, because it’s not just the higher prices that makes bodegas carry no fruit- it’s also the convenience of packages that don’t go bad. In fact it’s an entirely different business model, which is unfortunately a pretty tough nut to crack, but is essential in this discussion.

In other words, the result of this tax plan would be, for poor people, even higher prices for crappy food, not access to fresh cheap food. Unless the plan has worked out a system for how to get fresh fruit into poor areas, it really is missing the very audience it wishes to target.

Categories: news, rant
  1. July 25, 2011 at 9:40 pm

    What do you make of the apparent failure of increasing access to supermarkets: http://www.latimes.com/health/la-he-food-deserts-20110712,0,537936.story


    • July 25, 2011 at 10:01 pm

      Interesting, thanks!

      It tells me that this is a hard issue, and needs to be addressed on multiple fronts. It’s clearly not sufficient to have supermarkets available. We need to have affordable fresh food as well, and perhaps we need to even limit the fast food restaurants, or at least zone them to be less ubiquitous (for example, to have them zoned beyond the supermarkets). Also coming into the equation, of course, is that families with children are often led by single working mothers who are overtired and overworked and can’t summon the energy when they come home from work to cook when there are other easier options. I guess overall it comes down to an overhaul on how we behave as a community with respect to feeding each other. It’s definitely not easy. But it’s definitely important, and we should be trying different things and doing our best to innovate. I’m hopeful that we can improve the current situation without simply adding to the prices of crap food. In fact considering the upcoming health care system costs, we have no choice but to innovate.

      I am open to suggestions, I really care about this issue.

      Thanks again,


  2. FogOfWar
    July 25, 2011 at 9:55 pm

    That article has been making the rounds–just got asked about it yesterday.

    A few points:

    1. eliminating the subsidy for high fructose corn syrup at the producer level and imposing a tax on products high in sugar would have pretty much the same impact.

    2. The real question is what’s the elasticity of food choices. If food decisions are highly elastic, this is a decent social policy tax (assuming you agree with (a) the goals and (b) using tax for social policy). If food decisions are not that elastic, then it’s not going to have the desired effect. What’s the data out there?

    In a textbook free market (i.e., something that bears no relation to the world we live in), distributors would restock different foods in response to the tax to hit the desired price point of their customers. There might be a grain of truth to that–supermarkets in low-income neighborhoods have long been known to charge higher prices than supermarkets in affluent suburbs. Theorized to be because of greater ability of the affluent customers to travel and price-compare/create competition amongst grocery stores. But even with this, there’s only so much blood you can draw from a stone, and so the low-income supermarkets might be forced to switch to lower sugar products or else risk their large profit margins as their prices might go beyond what their customers have to spend.

    3. The whole idea is paternalistic. Whatever–that word has a pejorative connotation (and it is true that the road to hell is paved with good intentions) but the goals are good…

    4. In any case, it would definitely be regressive. Depends to some degree on point 3 as to whether you’re ok with that. One could study the health savings expected from the tax (based on point 2) compared with the health benefits…



  3. July 26, 2011 at 9:58 am

    I’d be pretty upset with letting government decide which foods are unhealthy and would expect a proposed tax on traditional foods butter, eggs, and fatty cuts of meat. As you said, clearly nutrition “education” isn’t doing the trick. Of course, when you constantly push diabtetics to eat more wheat, it’s never going to.


  4. Daniel K.
    July 26, 2011 at 10:36 am

    The issue is indeed complex. The US is a country as much plagued by unhealthy eating and living as by mythological diets. If you start to look at nutrition as a field, you’ll quickly realize that it is not particularly scientific, adhering to less statistical rigor than even the pharmaceutical industry. Many of the nutrition theories the US government has endorsed have been essentially hack (here is a lay list of things you probably heard in the last 20 years http://www.healthy-eating-politics.com/food-myths.html for example) and many others that are absurd and essentially just abstentionism are the rage today (paleo, liquid, etc). It would be terrifying, and incredibly profitable for some, to have the US government tax what it today deems unhealthy. Beyond economic and practical reasons why nutrition education has failed to make America healthier is the simple fact that food is just one component of a bigger picture that needs to be addressed.


  5. anonymous
    July 26, 2011 at 11:49 am

    I disagree.

    Consider a tax on Soda (or for that matter Beer and Liquor). It would be much healthier for people to drink tap water over soda (and with very rare exception most Americans have access to potable tap water). While it would be better if individuals just drank water, part of the problem is that Soda is currently cheaper than other beverage alternatives such as juices and milk. I see no social downside to bring the price up to 2-3 times (heck, even 5 or 10 times) that of juice with large taxes.

    Of course, a lot of people will just buy soda anyway because they prefer the taste. When these individuals get high cost diseases (diabetes) as a result, it is public tax dollars that will most likely go to paying for their medical care (medicaid if they are poor and medicare when they get old). The idea is that when they go to buy the soda in the first place they will either be discouraged by the high price and not buy it — or pay into the pot a contribution to help cover the cost of their medical care when they get ill. Your issue of access to high quality foods is valid, but I do not see how it applies in all cases, such as that of Soda where the alternatives are essentially free (tap water) or widely available (juices and milk).


  6. Frank H
    July 26, 2011 at 2:23 pm

    I don’t have any research or hard data to back this up, but it appears to me that the greatest value in calories of food per dollar is probably from the fast food dollar menu items. Am I right or wrong – does anybody have data? I agree that these dollar menu items are not a balanced diet and that they don’t supply all the micro-nutrients that humans require, but I believe that for the homeless or for people in poverty these are literally life savers. Please don’t add a 100% or more tax on these items – people could literally starve…


  7. Dan L
    July 27, 2011 at 11:18 am

    Taxing “bad food” is tricky because who gets to decide what “bad food” is? Should heavy cream be taxed? What about reduced-fat Chips Ahoy? If history is any guide, the food industry will decide. (For example, see the cruel joke that is the USDA.) But really, no matter who writes the rules, I guarantee that there would be many arbitrary and scientifically unsound choices made.

    But I’m all for incremental improvement. I think that a sugary drinks tax is an absolute no-brainer. There is truly no nutritional value to these drinks. Yes, it would be regressive, but so are cigarette taxes. Most importantly, sugary drinks have a much cheaper and healthier substitute known as… water.

    While the beverage industry was able to kill the NY soda tax, I think that the winds of change are blowing in the right direction, and soda taxes will be a reality in 5 years or so.

    And of course, it’s hilarious that we have to talk about asking the government to *tax* unhealthy food when in fact, the government *subsidizes* it. (But there is indeed a logic to it since one government is state/local and the other is federal.)


  8. Aaron
    July 27, 2011 at 9:35 pm

    Did you hear this NPR story? It’s about Walgreens (believe it or not) and an experiment with offering real food — fresh fruits and vegetables — at stores in some of what they call “food deserts” in Chicago.


    Seems like a positive step on the distribution-of-food problem.


  9. July 28, 2011 at 6:49 am

    One thing to consider: currently, one in seven households in the country receives food stamps (the current official name for food stamps is “Supplemental Nutrition Assistance Plan” or SNAP and the “stamps” are actually a debit card.) Even in states where retail sales tax is charged on groceries, federal law does not allow such taxes to be charged on purchases paid for with SNAP. Thus, if the junk food taxes are assessed at the register, low income families would not be affected at all by those taxes if they pay for the items with their SNAP card.

    Then again, there is a whole separate policy issue as to whether junk food purchases should qualify for food stamp purchases in the first place. Mayor Bloomberg has taken a lot of heat for his request to disallow the use of foodstamps for soda purchases in New York City. I agree with him. Since the official program title (SNAP) refers to “Nutrition” and not to food, describing soda as “nutrition” is an abuse of the word.

    On a more positive note, my favorite idea for promoting nutrition is a wonderful program in Schenectady’s Central Park run by Cornell Cooperative Extension called Roots and Wisdom.

    Inner city children and teens in the Roots and Wisdom program grow vegetables and fruits under the guidance of mentors. They learn how to prepare it as well. They sell some of it at a market in the park (which is adjacent to some of the poorest neighborhoods in Schenectady) and they take some of it home. Some is donated to food banks. The younger children (ages 6 to 11) participate in a program that is primarily educational/recreational–like a summer camp. The teens (ages 14-18) receive stipends for their work. College students from a nearby ag schools are hired to assist the professional staff.

    Here is the mission statement: “Youth from throughout the county work together to make Schenectady a better place by growing high quality organic food for sale and donation.
    In the process they also learn about themselves, their community, sustainable agriculture, nutrition, and the power of youth. “


  10. July 28, 2011 at 7:46 am

    Thanks, Mary!

    One other issue I’ve thought of since my post is that we should also keep in mind what effect, if any, those taxes would have on school lunch programs, since that’s a huge source of food for poor kids. Does anyone know?



  11. July 28, 2011 at 12:02 pm

    Since schools participating in school lunch programs are generally public or private nonprofit institutions, their purchases of all items are generally tax-exempt, so I don’t see that junk food taxes would affect them. Moreover, the types of food proposed for junk food taxation are generally not permitted to be served in the current school lunch program.


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