12.18.2008

TAXING THE FAT

BY SEACHRANAI
I
In general, I would be the first person to berate a politician for doing something as obtuse as raising taxes in difficult economic times, which is precisely what democratic Governor David Paterson intends on doing in New York. Now, New York already boasts the second highest tax rates in the union (oh Connecticut you gluttonous little cormorant, no one can best you on taxes). Yet, Mr. Paterson has decided that the golden goose that is his state may have a little bit more to give if he sticks his arm in bottom and reaches up there far enough. Groping around, he seems to have found a few more golden eggs in hiking taxes further on beer and wine, cab fares, cable and satellite TV, tickets to movies and sporting events, soft drinks, and iTunes. These ridiculous new taxes will go to replenish the states coffers of the funds they are going to lose this year from having no Wall Street profits or bonuses to tax (Wall Street makes up approximately 20% of the entire state’s revenue), all the while punishing a state populace that has been one of the first and hardest hit by the recession (ironically, because of excessive taxes).

One tax proposal amongst the gaggle, however, may have merit. And that is taxing soft drinks… hear me out. I pay taxes – a lot of taxes – and a good portion of these taxes go toward a healthcare system which is heavily subsidized by the government. We don’t have “socialized” healthcare like Europe and Canada, but we do spend about 20% of the federal government’s budget on healthcare according to the Office of Management and Budget Data.

Now I like many could stand to lose a few (especially after the holiday season – you should see all the chocolates and such we have lying around here), but I do actively strive to live a healthy lifestyle. There are many people that do not. So as I see it, 20% or so of my tax dollars will never directly benefit me, or the public good in general, but instead will subsidize a select few that choose to live a less healthy lifestyle.

I am all for the freedom to do whatever you want – or eat whatever you want as the case may be. That does not mean, however, that society must carry the burden (and it may take many, many members of society to carry you at your size) if your poor lifestyle choices lead to poor health. This tax corrects that.

In effect, the economic burden of poor choices is being shifted back to those who make said choices. Now in a perfect world, there would be no government subsidy to “bail us out” of the consequences of our poor decision making, as our current healthcare system provides, and such a tax would be unnecessary and immoral. We don’t live in that world, however, and our incentive structures must be constructed pragmatically to fit that reality.

And so, we tax the fat - or rather, the things that make us fat, and indirectly circumvent another senseless government subsidy.

10 comments:

Hariolor said...

Couple problems with this:

1) pro-obesity people will scream at the tops of their lungs that sugary drinks have not been scientifically proven to make anyone obese. (There are some studies that show correlations, but that's as good as it gets)

2) the amount of money raised in NY from this tax will be a paltry couple million compared to the billions in debt the state has racked up.

3) this sort of nanny-state behavior should never be condoned. I mind it less coming from a state and not the fed, but I'd rather see the federal medicare system abolished without any extra state taxes added in the process.

Tony Cannizzaro said...

Normally I would agree with you. The one caveat is that SCHIP (the State Children's Health Insurance Program) is a big part of federal spending, and sugary drinks ARE scientifically proven to significantly contribute to childhood obesity (UC Berkeley Center for Weight and Health, 2003; Harvard School of Public Health, 2001).

I am all for the abolition of the nanny-state, but I do not consider proper assignment of costs and allignment of public incentives to be promoting or condoning that state. Rather, it is the proper way to manage such a system as to limit its potential for wealth distribution until the institution can be dismantled.

From a pragmatic standpoint, it goes further towards wanning those subservient to the nanny-state off the healthcare teat as well. There is a collective action problem when those receiving the benefits of the system are not paying for it. When you shift the costs of a broken system onto those that exploit it, you increase the chance that those individuals will realize the system must be disolved.

Ultimately, while this is clearly not the ideologically preferable solution, it is a pragmatic response to the problem.

Ben Wheat said...

I can actually see the merit of this policy, but it's difficult to make it a real "fat tax" unless it is applied to everything that causes obesity: fast food, desserts, etc. If you're just taxing soft drinks there's a selectiveness there that singles them out and is equivalent to saying that they are the sole perpetrators of obesity-related health issues.

We do this with cigarettes and alcohol, we should do it with prostitution and marijuana (legalize and tax the hell out of it, that is). So there is a precedent there that seems to have been accepted.

Don't know, I could go either way on this.

littleCog said...

I'd the more conservative position would be to cut governmental benefits to easily prevented diseases rather than add on more taxes. It's cool if people want to give themselves type 2 diabetes, they just shouldn't expect us to pay for it.

Luscus said...

In essence you're advocating a tax on any consumable non-drug item that isn't a lean meat or vegetable.

Who would regulate this? the FDA? Congress? We've already got pretty much everything and bread sweetened with corn syrup (thank you, farm lobby) - how would you suggest (politically) this become actual in process? Please, tell me how the political obstacles of the farm lobby, the insurance lobby, and the medical lobby will be overcome.

Tony Cannizzaro said...

To respond to littlecog - yes. We shouldn't have to pay for it, but we do. There is no incentive for them to want to dismantle a system in which other member of society give them money to alleviate their problems. If we can shift the costs of the system onto them, they are more likely to reconsider its usefulness.

To answer Luscus - I understand that there are a number of competing interests involved outside the common citizen playing on the greed of our elected representatives. For this purpose, I go back to an idea I tossed around a number of years ago involving the tax system. I'd like to see an elective tax system, in which people specify where a certain portion of their tax dollars go. Perhaps 50% of your tax dollars are discretionary, and the appropriations committee can put it where it sees appropriate as we do now. The other 50%, however, we could direct via our tax return. I want 20% of my tax dollars to go towards highways. I want the other 30% in schools. And such.

People would vote for those things they would like government to spend money on, allowing the citizens to allocate their own resources. This would of course be most successful on more local levels...
...but then again, what isn't?

Hariolor said...

not only is it a terrible idea to tax necessities (read: food), but all food is equally likely to cause obesity, provided you eat too much of it. 5,000 calories is 5,000 calories regardless of where it comes from.

And, sadly, it will likely never happen that any given amount of sugar intake or specific source/mode of carbohydrate consumption is going to be demonstrably linked to causing type-2 diabetes. Certainly there are some strong correlations between carbohydrate intake and diabetes, but that should hardly be grounds for encouraging any form of taxation.

Tony, I'd be curious what specific studies you referenced in your claim about SSB and childhood obesity.

Tony Cannizzaro said...

Indulge your curiosity - go to the sources I referenced... thats why I referenced them :P

Hariolor said...

you didn't reference studies, just websites, Mr Cannizzaro. I can't spend my time reading the entire corpus of UC Berkeley research to find your information...could you indulge me with hyperlinks to specific studies, because I argue with my father about these things all the time.

Tony Cannizzaro said...

Sorry, figured you would just google it. Press release of Harvard study is here: http://www.hsph.harvard.edu/news/press-releases/archives/2001-releases/press02152001.html

The UC Berkeley study was actually referenced in another policy paper I read at work, and I just stole the reference. I'm not immediately getting the same paper to come up at home. If I find it here, or can pull it off my history at work, I will post it.

The UC Berkeley website as other studies which support the conclusion.

I guess the point of the whole discussion though is the origination of a pragmatic solution (I have found recently I argue and support a lot of ideological solutions - but they tend to be ineffectual and history shows these types of ideas die with the ideologues that think them up. I want to support my ideals with practical solutions).

Ultimately it goes down the same road of legalizing and taxing the hell out of something like marijuana. You will find less correlation between maryjane and any other crime than you will find behind soda and obesity (and for good reason - it is a powerful depressant, people who take it tend overwhelming to do nothing at all, lest they commit crime). In an ideal society, people could indulge themselves without being taxed at all - but that is unlikely to happen.

Again, I don't believe we should subsidize or tax any of this - but we already do. I merely express that the most practical method of weening people government subsidy of bad behavior and ultimately eliminating it is to shift the cost of the subsidy to those yielding the benefit.