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Should junk food be taxed?
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lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Not all poor folk are on food stamps, though1 -
lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Not all poor folk are on food stamps, though
Right - that is part of my point about how food assistance needs to increase. As a single man with no children, the qualifications are nearly impossible to meet. I don't need it today, but I was unemployed during the recession for 9 months. Even while I was unemployed, I didn't qualify for food stamps. I also didn't qualify for medicaid and I have type 1 diabetes, so I would die within a few days of running out of insulin. During the time I was unemployed, I had additional medical issues (one of which was related to diabetes, the other ended up being caused by a tumor on my brain). Pretty much all of my savings went to pay for COBRA premiums and I was still borrowing money to pay co-pays. But then again, how we deal with poverty in this country (or how we ignore it) is a whole different debate altogether.2 -
Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.1 -
Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
I'm open to trying this (my saying that does not indicate that I think sugar makes people fat any more than other foods). My preference is that states do it as they like and then we can see how it works compared to other policies other states might want to try.
Also, I'll note again that much "added sugar" is HFCS, which is artificially cheap (subsidies).0 -
Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Depends on the recipe and quality of tomatoes you use to make ketchup. It can be very delicious and much lower in calories than Heinz.1 -
Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
Lol @ any third grader would... but not on this forum! So weird!
Taxing based on added sugar seems reasonable and doable.
Asking what the definition would be is by no means a laughable question when we are trying to talk about a specific law, sorry. You can't just tax "junk food." You need a definition. This has already been an issue when people try to tax "soda" (which often means sugary drinks) -- is diet included? (often it is), is juice?, are energy drinks and sports drinks?
If you get into a broader range of products, the question becomes harder. For example, the US definition of "empty calories" on things like MyPlate is added sugar AND added sat fat, but there are an awful lot of people on MFP who would take issue with the latter portion of that. And is bread or ketchup with some added sugar necessarily junk food? All flavored yogurts?
Still others seem to be saying things like fast food (restaurant meals are already taxed, so I don't think it should mean this). But you can get a salad at a fast food place (or such is my understanding -- haven't been to one in years). And then of course we get into what's fast food (since despite what I just said, I've been to a Chipotle and a Pret -- fast food?).
Anyway, if we are to seriously talk about this, I am interested in what the tax would say. Silly thing to mock. Defining things in a workable way is one of the difficulties of lawmaking.1 -
Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
I like the idea to stop subsidizing the raw materials to begin with, if we're deciding they're no good for us at the quantities consumed. Why not fix the problem we created at the source?
Although I said that too, and that's generally my preference (I tend to like less messing around with the market rather than more, all else equal), my guess is because they'd have different effects. Subsidizing Big Corn and the like has broad effects -- probably cheaper meat, among others (used as animal food), as well as related to exports that directly benefit the agriculture business. (And dumb stuff like ethanol.) Taxing products that include HFCS (and other forms of sugar) would have a more targeted effect while allowing us to continue benefiting the agriculture industry.
(Don't get me wrong, I disapprove of ag subsidies, but that would be a reason to address it with the taxes.)0 -
Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Hidden sugar is a bogus, made-up thing, but you could tax* based on percentage by weight that's added sugar. Kind of questionable in that the calories in something like a Hostess cupcake (do those still exist?) or potato chips (no sugar, so not covered by the law) are about half from fat. Both the cupcake and the ketchup contain sugar, but I suspect ketchup results in weight gain by absolutely no one. (Neither do cupcakes, calories do, but I think a lot more people overeat cupcakes to the point of throwing their overall calories out of whack -- or chips, for that matter -- than ketchup. A law that blames ketchup and not chips for obesity is weird,** which I why I mentioned the definition point and got told that was a stupid laughable question!)
*Not saying I'm in favor, but speculating about how the law could work.
**Yes, no food is responsible for obesity. People eating too much cause obesity.2 -
lemurcat12 wrote: »Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Hidden sugar is a bogus, made-up thing, but you could tax* based on percentage by weight that's added sugar. Kind of questionable in that the calories in something like a Hostess cupcake (do those still exist?) or potato chips (no sugar, so not covered by the law) are about half from fat. Both the cupcake and the ketchup contain sugar, but I suspect ketchup results in weight gain by absolutely no one. (Neither do cupcakes, calories do, but I think a lot more people overeat cupcakes to the point of throwing their overall calories out of whack -- or chips, for that matter -- than ketchup. A law that blames ketchup and not chips for obesity is weird,** which I why I mentioned the definition point and got told that was a stupid laughable question!)
*Not saying I'm in favor, but speculating about how the law could work.
**Yes, no food is responsible for obesity. People eating too much cause obesity.
There was a table of patriotic Hostess products on sale in my grocery store yesterday. Cupcakes with red, white, and blue frosting, Twinkies with red, white, and blue sprinkles... I can't see a Twinkie without thinking of MFP.
To add on to your point about definitions: Let's say we can define "junk" as a percent added sugar or a percent sat fat in a packaged food (now let's go define packaging, because my ground beef is usually already wrapped up with a price tag). I mentioned chips earlier. What happens with the baked chips - are they still junk food because they're "empty" calories, or would they get a pass for having less sat fat and fewer calories than their traditional counterparts?
And let's say we arrive at a definition and agree on a tax. How do you keep companies from reducing prices on junk food and distributing the cost increase to their other products? If HFCS products become more expensive and people buy fewer of them, that cost will work its way back to Big Corn, which will increase the cost of meat. Are you going to use the junk food tax to subsidize Big Corn further and keep meat at the same price? Junk food isn't like alcohol or cigarettes - it's a much complicated economy where tax will have unwanted consequences.2 -
mskessler89 wrote: »lemurcat12 wrote: »Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Hidden sugar is a bogus, made-up thing, but you could tax* based on percentage by weight that's added sugar. Kind of questionable in that the calories in something like a Hostess cupcake (do those still exist?) or potato chips (no sugar, so not covered by the law) are about half from fat. Both the cupcake and the ketchup contain sugar, but I suspect ketchup results in weight gain by absolutely no one. (Neither do cupcakes, calories do, but I think a lot more people overeat cupcakes to the point of throwing their overall calories out of whack -- or chips, for that matter -- than ketchup. A law that blames ketchup and not chips for obesity is weird,** which I why I mentioned the definition point and got told that was a stupid laughable question!)
*Not saying I'm in favor, but speculating about how the law could work.
**Yes, no food is responsible for obesity. People eating too much cause obesity.
There was a table of patriotic Hostess products on sale in my grocery store yesterday. Cupcakes with red, white, and blue frosting, Twinkies with red, white, and blue sprinkles... I can't see a Twinkie without thinking of MFP.
To add on to your point about definitions: Let's say we can define "junk" as a percent added sugar or a percent sat fat in a packaged food (now let's go define packaging, because my ground beef is usually already wrapped up with a price tag). I mentioned chips earlier. What happens with the baked chips - are they still junk food because they're "empty" calories, or would they get a pass for having less sat fat and fewer calories than their traditional counterparts?
And let's say we arrive at a definition and agree on a tax. How do you keep companies from reducing prices on junk food and distributing the cost increase to their other products? If HFCS products become more expensive and people buy fewer of them, that cost will work its way back to Big Corn, which will increase the cost of meat. Are you going to use the junk food tax to subsidize Big Corn further and keep meat at the same price? Junk food isn't like alcohol or cigarettes - it's a much complicated economy where tax will have unwanted consequences.
For the chips, we'll just end up with Olean-laden backdoor blowouts again. Could we not? Please?0 -
Gallowmere1984 wrote: »mskessler89 wrote: »lemurcat12 wrote: »Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Hidden sugar is a bogus, made-up thing, but you could tax* based on percentage by weight that's added sugar. Kind of questionable in that the calories in something like a Hostess cupcake (do those still exist?) or potato chips (no sugar, so not covered by the law) are about half from fat. Both the cupcake and the ketchup contain sugar, but I suspect ketchup results in weight gain by absolutely no one. (Neither do cupcakes, calories do, but I think a lot more people overeat cupcakes to the point of throwing their overall calories out of whack -- or chips, for that matter -- than ketchup. A law that blames ketchup and not chips for obesity is weird,** which I why I mentioned the definition point and got told that was a stupid laughable question!)
*Not saying I'm in favor, but speculating about how the law could work.
**Yes, no food is responsible for obesity. People eating too much cause obesity.
There was a table of patriotic Hostess products on sale in my grocery store yesterday. Cupcakes with red, white, and blue frosting, Twinkies with red, white, and blue sprinkles... I can't see a Twinkie without thinking of MFP.
To add on to your point about definitions: Let's say we can define "junk" as a percent added sugar or a percent sat fat in a packaged food (now let's go define packaging, because my ground beef is usually already wrapped up with a price tag). I mentioned chips earlier. What happens with the baked chips - are they still junk food because they're "empty" calories, or would they get a pass for having less sat fat and fewer calories than their traditional counterparts?
And let's say we arrive at a definition and agree on a tax. How do you keep companies from reducing prices on junk food and distributing the cost increase to their other products? If HFCS products become more expensive and people buy fewer of them, that cost will work its way back to Big Corn, which will increase the cost of meat. Are you going to use the junk food tax to subsidize Big Corn further and keep meat at the same price? Junk food isn't like alcohol or cigarettes - it's a much complicated economy where tax will have unwanted consequences.
For the chips, we'll just end up with Olean-laden backdoor blowouts again. Could we not? Please?
Gross.
Not only would we be paying more in taxes, we'd get back some of the terrible junk food from America's fat-hating days. This sounds just *brilliant*.0 -
Well, it would certainly be less tempting, I suppose!0
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Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
The WIC program is not necessarily a list of "healthy foods." It is a few foods that are supplied to supplement nutrition for young children.
The breads you can get on WIC have HCFS (small amounts, but yes). You can choose from a list of cereals, which includes frosted mini-wheats; they do have guidelines about their cereals, which has to do with how much sugar, whole grain, and added nutrients the cereal has. Fruit and vanilla flavored yogurts are allowed, which have added sugar. Block cheese is provided. Unless the child is 12-24 months and therefore getting whole milk, the milk must be skim or 1%.
In fact, every item on the WIC list, aside from the fresh fruits/vegetables, will meat someones definition of not healthy, and some will fall under certain people's definitions of "junk."
So, while looking at the WIC program as "a start" for a definition of "healthy foods" might work, if we follow that pattern, we still have to ask, by whose definition of healthy are we going. Additionally, are we going to need a list of foods that are "healthy" and therefore exempt from the tax? (We can't just say cereal, can we, because what about lucky charms or coco puffs?) An every-changing list as new products come onto the market? And how does the average consumer know which items are taxed and which aren't, without carrying an extensive, just updated, list with them?0 -
Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
The WIC program is not necessarily a list of "healthy foods." It is a few foods that are supplied to supplement nutrition for young children.
The breads you can get on WIC have HCFS (small amounts, but yes). You can choose from a list of cereals, which includes frosted mini-wheats; they do have guidelines about their cereals, which has to do with how much sugar, whole grain, and added nutrients the cereal has. Fruit and vanilla flavored yogurts are allowed, which have added sugar. Block cheese is provided. Unless the child is 12-24 months and therefore getting whole milk, the milk must be skim or 1%.
In fact, every item on the WIC list, aside from the fresh fruits/vegetables, will meat someones definition of not healthy, and some will fall under certain people's definitions of "junk."
So, while looking at the WIC program as "a start" for a definition of "healthy foods" might work, if we follow that pattern, we still have to ask, by whose definition of healthy are we going. Additionally, are we going to need a list of foods that are "healthy" and therefore exempt from the tax? (We can't just say cereal, can we, because what about lucky charms or coco puffs?) An every-changing list as new products come onto the market? And how does the average consumer know which items are taxed and which aren't, without carrying an extensive, just updated, list with them?[/quote]
Seem like the stores I go to have a WIC eligible sticker along with the price.0 -
lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Simple, make items defined as junk food not eligible for purchase with food stamps.0 -
Packerjohn wrote: »lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Simple, make items defined as junk food not eligible for purchase with food stamps.
Oh god, all the rage this would generate. You know what, set any parameters for "junk food" for this, and I wouldn't care. Somewhere, sometime, and whole bunch of people are gonna be livid, and it will be hilarious.2 -
Additionally, are we going to need a list of foods that are "healthy" and therefore exempt from the tax? (We can't just say cereal, can we, because what about lucky charms or coco puffs?) An every-changing list as new products come onto the market? And how does the average consumer know which items are taxed and which aren't, without carrying an extensive, just updated, list with them?
Not clear they would, until it's rung up. My state and local sales taxes have a variety of different rates (it's confusing), and I never really know what the added tax will be 'til it's rung up. And yeah, annoying.0 -
Gallowmere1984 wrote: »Packerjohn wrote: »lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Simple, make items defined as junk food not eligible for purchase with food stamps.
Oh god, all the rage this would generate. You know what, set any parameters for "junk food" for this, and I wouldn't care. Somewhere, sometime, and whole bunch of people are gonna be livid, and it will be hilarious.
How's that different from now? Somebody's always mad about something. *shrugs*2 -
lemurcat12 wrote: »Gallowmere1984 wrote: »Packerjohn wrote: »lemurcat12 wrote: »Part of the problem is that it's not really clear what the tax would be on.
How about taxing based on added sugars? Would get the main items that any third grader would classify as junk food like pop, candy, cookies, etc. Might also get manufacturers to reduce the amount of "hidden" sugars in things like ketchup, sauces, etc.
The US already has some definition of "healthy foods" from the WIC programs, might be a start.
How do you define "hidden" sugar? Many recipes hinge on a specific sugar content, and since you mentioned ketchup, that's actually one of them. You know what you have when you strip added sugar from ketchup? Pastey cocktail sauce.
Hidden sugar is a bogus, made-up thing, but you could tax* based on percentage by weight that's added sugar. Kind of questionable in that the calories in something like a Hostess cupcake (do those still exist?) or potato chips (no sugar, so not covered by the law) are about half from fat. Both the cupcake and the ketchup contain sugar, but I suspect ketchup results in weight gain by absolutely no one. (Neither do cupcakes, calories do, but I think a lot more people overeat cupcakes to the point of throwing their overall calories out of whack -- or chips, for that matter -- than ketchup. A law that blames ketchup and not chips for obesity is weird,** which I why I mentioned the definition point and got told that was a stupid laughable question!)
*Not saying I'm in favor, but speculating about how the law could work.
**Yes, no food is responsible for obesity. People eating too much cause obesity.
Makes the fries more tasty...1 -
Gallowmere1984 wrote: »Packerjohn wrote: »lessismore130 wrote: »midwesterner85 wrote: »Actually, it is a bit more complicated than just the question of whether businesses are price makers (i.e. the argument that a tax on business will be passed on to consumers) or price takers (i.e. the argument that businesses will be influenced financially by the tax and not offset it to consumers - thereby influencing the behavior of businesses). On both sides of the transaction, there is a utility factor. It's no different than the argument that a business will lose money if they raise prices - a preposterous notion without more information. If a business raises prices by 10% and only sells 8% fewer units, then the business has increased profits by raising prices. On the other hand, if a business raises prices by 10% and sells 12% fewer units, then it has decreased profits (when looking at this simplistically and assuming all costs are variable).
By taxing the consumer directly, you influence the consumer's decision and the complication of whether it influences the business directly or not is irrelevant. If it works to cut consumption, then the business will sell fewer units... and (unless there is both a price increase and a demand utility such that a price increase doesn't decrease sales by more than price is increased) that means a less profitable product for the company anyway. My only concern, which I mentioned a long time ago in this thread, is that impoverished members of society are likely to be hurt the most by such a tax. For this reason, I would suggest starting with removing government subsidies for HFCS production. This affects business directly, and might affect consumers (depending on demand utility) as well. Removing subsidies (or taxing businesses) probably will be passed to consumers in the case of these foods since the impoverished are likely price takers when it comes to food. If it is done at an amount to put the prices of fresh foods at a similar price as packaged / junk food, then the goal of reducing junk food consumption should be easily achieved. As for the impoverished people who will be less able to afford food: Raise food assistance.
That is the economic explanation for how fiscal policy can work to reduce consumption of junk food.
Don't forget that food bought with food stamps isn't taxed. So if a tax is what's keeping junk food and fresh food prices comparable then the junk will come out cheaper for the poorer citizens.
Simple, make items defined as junk food not eligible for purchase with food stamps.
Oh god, all the rage this would generate. You know what, set any parameters for "junk food" for this, and I wouldn't care. Somewhere, sometime, and whole bunch of people are gonna be livid, and it will be hilarious.
How's that different from now? Somebody's always mad about something. *shrugs*
Because there are few things funnier than people complaining about not being able to get specific things for "free".0
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