Is it enough to tax junk food and subsidize good food?
In The New York Times, Mark Bittman offers us this thought: “Bad Food? Tax It and Subsidize Vegetables.” The idea is to link taxes on unhealthy “hyperprocessed” foods like soda, French fries, and doughnuts directly to healthy food subsidies — i.e. one pays for the other. It’s not a bad concept — it’s well-established that Americans tend to prefer “earmarked” taxes that are devoted to particular programs. As Bittman puts it:
Putting all of those elements together could create a national program that would make progress on a half-dozen problems at once — disease, budget, health care, environment, food access and more — while paying for itself. The benefits are staggering, and though it would take a level of political will that’s rarely seen, it’s hardly a moonshot.
Too true. As I observed in my own piece from a couple of years back, “Tax junk food, but also subsidize veggies“:
We made junk food cheap but we also made good food expensive. There’s no free market in food. There’s only the stuff we subsidize and the stuff we don’t. And I’m not talking simply about cash subsidies paid to corn growers. I’m talking about a system that drives the wholesale price of corn and soybeans (the raw materials in all processed foods) to well below the cost of production. Meanwhile, fruits and vegetables, don’t get that benefit — they’re expected to sell at a premium (even if in some cases the premium is small). Not that I think the government should start squeezing vegetable farmers the way its policies have allowed the squeezing of corn and soy farmers — Walmart and other grocery chains already do plenty of that.
Of course, we may now be at a new permanent plateau for commodity prices, which may change the calculation somewhat. As this Wall Street Journal article reports, with prices high, farmers have stopped receiving their primary form of subsidies known as “price support” payments. Indeed, thanks to climate change, ethanol, and rising meat consumption (which increases demand for feed grain), we may be entering a period where market incentives to grow the raw materials for processed food actually increase as government supports decline.
Bittman is right that junk food, which contributes to the obesity and diabetes epidemics, should be taxed, as should any item that causes harm to society. And taxes would depress demand somewhat. And the revenue such junk-food taxes generate would help us pay costs associated with the epidemics.
But I’m less sanguine that such a program could be the main lever in stopping the rising tide of obesity in this country. In fact, there is, sadly, research that shows the limits of taxing our way to good health.
As Big Food rips pages out of Big Tobacco’s playbook — as with their latest move to use lawsuits that overwhelm cities with document requests to stop anti-soda campaigns such as New York City’s “Don’t Drink Yourself Fat” — let’s remember the most effective government tactics in the war on smoking. It wasn’t just the taxes — it was the advertising restrictions. And though the Federal Trade Commission has proposed new “suggestions” regulations to limit junk-food advertising to children, they’re unlikely to survive relentless industry lobbying efforts. And even if they did, that would still be nothing compared to what the FTC Congress did to tobacco ads decades ago. Can you imagine a world where junk-food TV ads are illegal? Neither can I. Until we somehow reduce the blizzard of billions in marketing dollars aimed at increasing our junk-food consumption, it’s hard to see an end to our overwhelming epidemics.
(Also: Bittman excluded diet soda from his list of junk foods to be taxed, but I think that’s a mistake. The evidence is accumulating that diet soda, specifically the artificial sweetener aspartame, directly causes the same metabolic problems as sweetened drinks. And even worse, a recent study found that the obese drink diet soda pretty much exclusively. A tax on sweetened drinks would neither hit them in the pocketbook nor in the waistline. If both of these findings hold up, including diet soda in a junk-food tax would appear to be very much necessary.)
Bittman is right that we need to enact a program of junk-food taxes and good-food subsidies. The only thing more frustrating than the limited effect such a program might have is the utter political impossibility of enacting it.
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