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Should junk food be taxed?

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  • jdlobb
    jdlobb Posts: 1,232 Member
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    Cherimoose wrote: »
    jdlobb wrote: »
    Yes. Pigovian taxes work. Junk food has quantifiable negative externalities and should be taxed accordingly.

    In moderation, foods perceived as bad are generally fine. Soda was drunk for decades before obesity became an epidemic, and its decline the past 20 years doesn't correlate with the rise in obesity. The main problem with "junk food" is its contribution to a calorie surplus, and since all food can be overconsumed, all food should be taxed in proportion to its calorie content. Additionally, everything which reduces calorie output - including all technology - should also be taxed. This is a ridiculous proposition of course, which is why singling out foods perceived as bad is also a folly.

    increasing the cost through taxation wouldn't do precisely what you're talking about though. It would reduce consumption without eliminating it entirely. The money raised from such a tax should be used to mitigate negative externalities, mainly, pay for public health care.
  • jdlobb
    jdlobb Posts: 1,232 Member
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    CSARdiver wrote: »
    Packerjohn wrote: »
    CSARdiver wrote: »
    Chicago just tried taxing soda and other specific drinks. As you can imagine this was a massive failure. Proponents of the increase predicted a 200M increase in revenue. Reality put the increase closer to 300k based on trending. Votes already came in to repeal this.

    They would have been better served putting up MFP billboards.

    Poor implementation in Chicago. Soda tax in Mexico seems to be having desired outcome:

    https://www.nytimes.com/2017/02/22/upshot/soda-sales-fall-further-in-mexicos-second-year-of-taxing-them.html

    From the article:

    The new study, published online Wednesday in Health Affairs, shows that the results of such a tax may be far more long-lasting. The research, based on shopping data from a large sample of urban Mexican households, showed that the first year’s consumption declines continued during the second year. Over all, sugary drink sales fell by 5.5 percent in 2014 compared with the year before, and by 9.7 percent in 2015 — again compared with 2013. (The results are based on predicted volumes had there been no tax.) Once again, the largest reductions were among the poorest Mexicans.

    Chicago and Illinois in general simply have a disastrous track record of implementing anything. The level of corruption is unparalleled. Of course in this case the tax could never work as people simply make their purchases outside city limits. Many Illinois residents do the same with food tax and make a trip to Wisconsin to avoid the high taxes.

    This is largely because Chicago and Illinois more broadly are surrounded by areas of vastly different political ideologies, and with vastly different rules. Ban guns in Chicago? Fine, drive 15 minutes to Gary, Indiana to buy one without a background check. Raise taxes to pay for public services? Fine, move across the street into Indiana. etc.

    It's very difficult to pass behavior modifying or punitive taxation in a small jurisdiction with high ease of mobility.

    A tax would have to be instituted either nationwide, or by a coalition of neighboring states to be completely effective.
  • ccrdragon
    ccrdragon Posts: 3,368 Member
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    jdlobb wrote: »
    Cherimoose wrote: »
    jdlobb wrote: »
    Yes. Pigovian taxes work. Junk food has quantifiable negative externalities and should be taxed accordingly.

    In moderation, foods perceived as bad are generally fine. Soda was drunk for decades before obesity became an epidemic, and its decline the past 20 years doesn't correlate with the rise in obesity. The main problem with "junk food" is its contribution to a calorie surplus, and since all food can be overconsumed, all food should be taxed in proportion to its calorie content. Additionally, everything which reduces calorie output - including all technology - should also be taxed. This is a ridiculous proposition of course, which is why singling out foods perceived as bad is also a folly.

    increasing the cost through taxation wouldn't do precisely what you're talking about though. It would reduce consumption without eliminating it entirely. The money raised from such a tax should be used to mitigate negative externalities, mainly, pay for public health care.

    There problem here is that the more effective the tax is, the less money you would have to fund anything else... look at what keeps happening with the tobacco taxes - as revenue from the tax drops because fewer people are using the product, the tax keeps going up because there a programs in place that are dependent on the tax funding (which keeps dropping the usage, which makes the taxes go up, etc).
  • jdlobb
    jdlobb Posts: 1,232 Member
    edited October 2017
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    ccrdragon wrote: »
    jdlobb wrote: »
    Cherimoose wrote: »
    jdlobb wrote: »
    Yes. Pigovian taxes work. Junk food has quantifiable negative externalities and should be taxed accordingly.

    In moderation, foods perceived as bad are generally fine. Soda was drunk for decades before obesity became an epidemic, and its decline the past 20 years doesn't correlate with the rise in obesity. The main problem with "junk food" is its contribution to a calorie surplus, and since all food can be overconsumed, all food should be taxed in proportion to its calorie content. Additionally, everything which reduces calorie output - including all technology - should also be taxed. This is a ridiculous proposition of course, which is why singling out foods perceived as bad is also a folly.

    increasing the cost through taxation wouldn't do precisely what you're talking about though. It would reduce consumption without eliminating it entirely. The money raised from such a tax should be used to mitigate negative externalities, mainly, pay for public health care.

    There problem here is that the more effective the tax is, the less money you would have to fund anything else... look at what keeps happening with the tobacco taxes - as revenue from the tax drops because fewer people are using the product, the tax keeps going up because there a programs in place that are dependent on the tax funding (which keeps dropping the usage, which makes the taxes go up, etc).

    but that's the point of a pigovian tax. If the use of the taxed good goes down, then so do the negative externalities associated with it, meaning they need less money.

    A perfectly taxed good would reduce consumption to a level that generated externalities exactly equal to the tax raised on it. Figuring out that level is a large part of economics.

    But just look at the extreme end. If you taxed it enough that nobody was using it, then there would be no need for the programs the tax was paying for. They both reduce to zero.

    The purpose of a pivogian tax is primarily to decrease consumption of a good with negative externalities. If those externalities are eliminated, then the tax was successful.

    I could make graphs it it helps.
  • CSARdiver
    CSARdiver Posts: 6,252 Member
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    jdlobb wrote: »
    CSARdiver wrote: »
    Packerjohn wrote: »
    CSARdiver wrote: »
    Chicago just tried taxing soda and other specific drinks. As you can imagine this was a massive failure. Proponents of the increase predicted a 200M increase in revenue. Reality put the increase closer to 300k based on trending. Votes already came in to repeal this.

    They would have been better served putting up MFP billboards.

    Poor implementation in Chicago. Soda tax in Mexico seems to be having desired outcome:

    https://www.nytimes.com/2017/02/22/upshot/soda-sales-fall-further-in-mexicos-second-year-of-taxing-them.html

    From the article:

    The new study, published online Wednesday in Health Affairs, shows that the results of such a tax may be far more long-lasting. The research, based on shopping data from a large sample of urban Mexican households, showed that the first year’s consumption declines continued during the second year. Over all, sugary drink sales fell by 5.5 percent in 2014 compared with the year before, and by 9.7 percent in 2015 — again compared with 2013. (The results are based on predicted volumes had there been no tax.) Once again, the largest reductions were among the poorest Mexicans.

    Chicago and Illinois in general simply have a disastrous track record of implementing anything. The level of corruption is unparalleled. Of course in this case the tax could never work as people simply make their purchases outside city limits. Many Illinois residents do the same with food tax and make a trip to Wisconsin to avoid the high taxes.

    This is largely because Chicago and Illinois more broadly are surrounded by areas of vastly different political ideologies, and with vastly different rules. Ban guns in Chicago? Fine, drive 15 minutes to Gary, Indiana to buy one without a background check. Raise taxes to pay for public services? Fine, move across the street into Indiana. etc.

    It's very difficult to pass behavior modifying or punitive taxation in a small jurisdiction with high ease of mobility.

    A tax would have to be instituted either nationwide, or by a coalition of neighboring states to be completely effective.

    True - Illinois has mismanaged its finances for decades and despite the myriad of tax increases, implementation of gambling, state lottery, etc. is over 15B in debt and approaching a 250B pension timebomb. This is somehow the fault of financially responsible neighboring states?

    http://money.cnn.com/2017/06/29/investing/illinois-budget-crisis-downgrade/index.html

    Additional income means nothing if you first don't limit your spending. I'm finding this rather obvious and a little humorous stating this on a calorie counting website.

    Not sure why you bring up gun laws, as background checks are still required in Indiana, just as they are in Illinois.



  • Packerjohn
    Packerjohn Posts: 4,855 Member
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    CSARdiver wrote: »
    Packerjohn wrote: »
    CSARdiver wrote: »
    Chicago just tried taxing soda and other specific drinks. As you can imagine this was a massive failure. Proponents of the increase predicted a 200M increase in revenue. Reality put the increase closer to 300k based on trending. Votes already came in to repeal this.

    They would have been better served putting up MFP billboards.

    Poor implementation in Chicago. Soda tax in Mexico seems to be having desired outcome:

    https://www.nytimes.com/2017/02/22/upshot/soda-sales-fall-further-in-mexicos-second-year-of-taxing-them.html

    From the article:

    The new study, published online Wednesday in Health Affairs, shows that the results of such a tax may be far more long-lasting. The research, based on shopping data from a large sample of urban Mexican households, showed that the first year’s consumption declines continued during the second year. Over all, sugary drink sales fell by 5.5 percent in 2014 compared with the year before, and by 9.7 percent in 2015 — again compared with 2013. (The results are based on predicted volumes had there been no tax.) Once again, the largest reductions were among the poorest Mexicans.

    Chicago and Illinois in general simply have a disastrous track record of implementing anything.
    The level of corruption is unparalleled. Of course in this case the tax could never work as people simply make their purchases outside city limits. Many Illinois residents do the same with food tax and make a trip to Wisconsin to avoid the high taxes.

    As an IL resident I 100% agree with you.
  • GaleHawkins
    GaleHawkins Posts: 8,160 Member
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    Prohibition by taxation historically is not that effective. There are too many lobby dollars for 'junk' food to likely ever be legally defined. The trend to withhold medical services to people with bad health habits may been more effective in saving taxpayers money perhaps.
  • mysteps2beauty
    mysteps2beauty Posts: 494 Member
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    One person's junk is another one's treasure.

    Instead of punishment, how bout we get tax write-off's with proof of good health.
  • erika_307
    erika_307 Posts: 82 Member
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    Only if it will pay for free healthcare.
  • Fyreside
    Fyreside Posts: 444 Member
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    16 months and 60 pages later, and the best answers are still on page 1. Until someone can measurably qualify the value of food the question is moot. And if you were to achieve that, I'm yet to see clear evidence of taxation alone leading to significant change in a trend or popular pursuit.
    There have been some initiatives, like what Germany has done with it's packaging laws that appear to have been widely successful. In this instance, charging a food manufacturer a public health levy on a sliding scale depending on the percentage of sugar or sodium in their product. You just might find companies finding a way to put less sugar in product x despite what the focus groups say.
  • Fyreside
    Fyreside Posts: 444 Member
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    Dnarules wrote: »
    erika_307 wrote: »
    Only if it will pay for free healthcare.

    There is no such thing as free health care.

    I have free healthcare. :p
  • clicketykeys
    clicketykeys Posts: 6,568 Member
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    Cherimoose wrote: »
    jdlobb wrote: »
    It would reduce consumption without eliminating it entirely. The money raised from such a tax should be used to mitigate negative externalities, mainly, pay for public health care.

    I have a novel idea - encourage citizens to be self-sufficient and pay for their own health care, instead of encouraging them to lean on the government for everything, which creates a disincentive to be accountable for their own health habits.

    Because a person's health benefits only themselves, apparently?

    A healthy population is a public good and therefore ought to be supported. Similar to education.