Latest posts by John Nothdurft (see all)
- Heartland Daily Podcast – Lindsey Burke: The Emerging Issues of Education - May 30, 2016
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- Heartland Daily Podcast – EIF: Obamacare, Medicaid Expansion and Welfare Reform - August 26, 2015
Last year the Washington state legislature passed a series of discriminatory “sin” taxes on soft drinks, candy, and bottled water. In November Washington voters will have a chance to decide whether government will continue to receive those tax revenues.
As we’ve seen in other states, such revenue grabs allow politicians to ignore the real sin weighing down Washington taxpayers: a broke and bloated government.
There are two arguments for targeted “sin” taxes. One is that government needs more money, and the other is that the taxes help solve some claimed social problem such as obesity or pollution. Neither of these arguments holds water, bottled or otherwise.
A key problem with taxing items subjectively declared “sinful” is that doing so typically increases government spending and fails to quench these advocates’ thirst for more revenue. Just as taxes on items such as alcohol and tobacco haven’t brought in “enough” revenue, neither will new taxes on everything from plastic bags to soda pop. In addition, these taxes unduly burden lower-income citizens, who spend a greater percentage of their income on the products being taxed.
Big-spending politicians like targeted “sin” taxes because they trick most people into thinking they’re not affected if they don’t consume the “sin product” du jour. These taxes, however, have an uncanny history of being extended to other products because they fail to meet their revenue goals while government spending continues to balloon.
Although advocates of these taxes claim they’ll promote better health or a cleaner environment, those arguments are really just a smokescreen offering political cover for lawmakers who want to raise taxes and shovel more revenue into the government’s coffers. Slapping taxes on selected foods and drinks punishes low-income people and those who enjoy an occasional tasty treat, and it does little if anything to lower obesity rates. Even advocates of these taxes readily admit the rates would have to be extremely high to have any significant effects on obesity, their claimed public health rationale.
It is interesting that vocal food-tax supporters in the United States actually oppose taxing the real problem, obesity itself. In an AOL News article, Walter Willett, a professor of nutrition at the Harvard School of Public Health, called the idea of a direct fat tax “not humane,” saying it’s “not fair to tax someone for being obese.” Yet he thinks it’s fair to tax a perfectly healthy person for drinking a soda or eating a Snickers bar!
Willett and his fellow food-tax proponents acknowledge food choices are not the only factor in obesity—genetics, physical activity, and other factors play crucial roles. Yet their case against a direct obesity tax applies even more strongly to taxes on targeted foods and beverages. Insofar as these taxes change consumer decisions, the alternative products people typically switch to often have similar calorie counts or other deleterious effects.
Taxes aren’t the only government policies so-called public health advocacy groups have been clamoring for lately. Calls for bans on salt in restaurants and toys in McDonald’s Happy Meals also have made headlines—further evidence that there is no end to the products special-interest groups will try to demagogue as being harmful to people, bad for the environment, or unhealthy, as a means to more government control and tax revenues.
Instead of distorting the market, unduly burdening lower-income taxpayers, and propping up unsustainable government spending, Washington should implement a longer-term fix—such as a reasonable statutory limit on taxes and expenditures.
If policymakers fail to do so, the state’s revenues will continue to come up short, and more taxes will be implemented, burdening taxpayers further while failing again to meet revenue projections and starting up another new round of tax hikes.
John Nothdurft (email@example.com) is the budget and tax legislative specialist for The Heartland Institute.