Opinion: Tax Junk Food, Subsidize Vegetables

New York Times Image

After sitting on a bus for five hours tonight, reading story after story about the debt ceiling, learning absolutely no new information, both sides completely dug in, I decided that I really needed to free myself from the horrible constraints of rehashing the same old points about the debt ceiling. So, for tonight's post, I want to talk about an issue that is extremely important to me and to the fate of this country: the problem of nutrition in the United States.

As a disclaimer, this post was inspired by a recent article in the New York Times, which I will cite throughout.

Introduction
What would happen if we were able to change our eating habits? Americans have been stuck in a rut of horrible food at dirt cheap prices for at least a decade, and the situation is getting worse. And, to be honest, I cannot blame the working class families who feed their children fast food day in and day out. When you are working paycheck to paycheck and trying to support a family while working three jobs, the calorie-dense, cheap fast food meal options can be a blessing. But there is of course another side to the coin: Americans are becoming the fattest people on earth, and fast food is absolutely the reason. 

And the nutrition problem in this country is not only a personal issue, it's also an economic one. Think about it: Economists say that the number one way to reduce the deficit and right the economy long-term is to find some way to slow the quickly rising cost of health care in this country. The way to do it? One word: Prevention. If you can find a way to offset the cost of fresh fruits and vegetables for working class families who generally eat fast food at higher rates and have more health problems down the line, you could easily slow the massive amounts of money that we spend every year on health care costs. You're looking at tens, even hundreds, of billions in savings. 

Google Images: In many cases, in the current nutritional climate we are in, a burger and fries can be much cheaper and easier than a home-cooked, healthier meal option

The Current Situation
While junk foods (like chips, sodas, "fruit" drinks, etc.) have been shown to lead to diseases like diabetes and heart disease, the food industry, more specifically the highly-processed food industry, has proven incapable of marketing healthier food options. Why do they refuse to market healthier foods? Simple, because while they tout their care for health and growth, the only thing these major companies are after is profit, and while unhealthy foods continue to drive profit margins higher, they will continue to push these products onto our society. 

In my opinion, it should be the federal government's job to stop outrages like this. The government needs to fulfill its main role as a protector of the public good. Currently, the federal government actually subsidizes these unhealthy products by, among other things, lowering the price of corn to an unbelievable extreme. This allows junk food designers to add things like high fructose corn syrup for pennies, charge low prices, and still make inordinately high profits. Rather than subsidize the junk food, we should be doing the opposite: taxing the foods that are most unhealthy for us. The income that we gain from doing so could be used to create a program that encourages Americans to eat healthy and warns them of the potential problems that eating poorly can cause long-term. 

And the need for a solution is absolutely dire. Attempting to educate our youths on the value of fresh vegetables over the sugary sweet taste of cocoa pebbles is difficult enough. Moreover, nutritional education is no match for the $4 billion that the fast food industry pushed into marketing in 2009. Here are a few facts:

1. The percentage of obesity among American adults has doubles over the last 30 years
2. The percentage of obese children has tripled in that same period
3. We not consume more than 10% more animal products than we did a generation ago, and while low fat meats like chicken are not necessarily a bad thing (despite the oftentimes inhuman conditions), I think that Americans would perhaps be better off without the quadruple baconator offered at Wendy's. 

The situation will only get worse, unless we act. Soon. 

Google Images: The subsidization of corn has long been considered detrimental to the well-being of that nation

Taxes
The way to solve the nutrition problem is an easy one: Tax the junk food and subsidize the fresh food. Easier said than done. 

According to Mark Bittman, who wrote an op-ed for the NYTimes, 

The average American consumes 44.7 gallons of soft drinks annually. (Although that includes diet sodas, it does not include noncarbonated sweetened beverages, which add up to at least 17 gallons a person per year.) Sweetened drinks could be taxed at 2 cents per ounce, so a six-pack of Pepsi would cost $1.44 more than it does now. An equivalent tax on fries might be 50 cents per serving; a quarter extra for a doughnut. (We have experts who can figure out how “bad” a food should be to qualify, and what the rate should be; right now they’re busy calculating ethanol subsidies. Diet sodas would not be taxed.)

Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

This would, in essence, drive up the cost of junk food (although not exponentially if we are only discussing a cent, maybe two tops, per ounce) and keep the price of fresh fruits and vegetables extremely low, encouraging all types of people to buy more healthy foods. The tax would not only raise money for state and federal governments in a time where the economic recovery is slow at best, but it would also act as a preventative measure and save the country billions on health care costs long term. Think if you could go to the grocery store, the drug store, the supermarket, and find fresh fruit for 50 cents a pound instead of the 2 to 4 dollars we pay now. Think about the health opportunities if we could put vending machines filled with fresh fruits and vegetables in schools and charge less than a dollar, an idea that has already been implemented in both Japan and Ohio. 

For many Americans, they have a much more difficult time purchasing fresh fruit than fruit loops. And with diabetes and other diseases attributed to bad eating habits on the rise, this issue is absolutely urgent for the economy sanctity and national well-being of this nation. 

The problem with most state taxes on junk food right now is that they're a sales tax, meaning that the tax is charged at the register. As anyone who buys their own groceries knows, most people only consider the price they see in the aisles, not really caring about the tax they have to pay on the good. Therefore, the added sales tax to junk food is a mostly failed policy, as it has not demonstrated an impact in the goods that people commonly buy. This means that excise taxes are needed if we really want to impact the way consumers purchase. An excise tax would be incorporated into the shelf life of a product, which would mean that it would directly impact the way decisions that consumers would have to make. 

According to Bittman, 

Much of the research on beverage taxes comes from the Rudd Center for Food Policy and Obesity at Yale. Its projections indicate that taxes become significant at the equivalent of about a penny an ounce, a level at which three very good things should begin to happen: the consumption of sugar-sweetened beverages should decrease, as should the incidence of disease and therefore public health costs; and money could be raised for other uses.

Google Images: Obesity is on the rise, having more than tripled among children in the last thirty years. We can stop the flow of childhood and adult obesity by making junk foods more expensive and subsidizing the cost of healthy and delicious fresh fruits and vegetables. 

Potential Pitfalls
Bittman points out two major problems, one being that it would upset the extremely powerful food lobby and the other being that some would ague that the government is infringing on their right to eat what they want:

This program would, of course, upset the processed food industry. Oh well. It would also bug those who might resent paying more for soda and chips and argue that their right to eat whatever they wanted was being breached. But public health is the role of the government, and our diet is right up there with any other public responsibility you can name, from water treatment to mass transit.

Some advocates for the poor say taxes like these are unfair because low-income people pay a higher percentage of their income for food and would find it more difficult to buy soda or junk. But since poor people suffer disproportionately from the cost of high-quality, fresh foods, subsidizing those foods would be particularly beneficial to them.

Conclusion 
Acceptance of new taxes in a nation that is electing such anti-tax zealots will not go down easy. According to Bittman, 

First off, we’ll have to listen to nanny-state arguments, which can be countered by the acceptance of the anti-tobacco movement as well as a dozen other successful public health measures. Then there are the predictions of  job loss at soda distributorships, but the same predictions were made about the tobacco industry, and those were wrong. (For that matter, the same predictions were made around the nickel deposit on bottles, which most shoppers don’t even notice.) Ultimately, however, both consumers and government will be more than reimbursed in the form of cheaper healthy staples, lowered health care costs and better health. And that’s a big deal.

As you can see, all of these arguments against the taxation of junk foods can be easily rebuked through reason.

In order to hammer home the point, I want to leave you with some numbers:

1. According to a professor at Columbia University, a one-cent per ounce tax on sugar-laced beverages in the state of New York could save up to $3 billion in health care costs over ten years and could bring in $1 billion annually to the state
2. A two-cent tax per ounce in the state of Illinois could reduce obesity by 18%, save $350 million and bring in over $800 million in tax revenue every year
3. If implemented nationally, the United States could see revenues of $13 billion a year while cutting consumption up to 24%
4. A 20% increase in the price of sugary drinks could result in a 20% decrease in consumption, which could prevent up to 1.5 million Americans from becoming obese and 400,000 from being diagnosed with diabetes, which could save $30 billion

The federal government is embattled in a tedious fight over what areas to cut, whether it be education, medicare, social security. Significant issues like the nutritional well-being of our nation are being blatantly overlooked. But if the government had any idea the economic value of the issue, both the savings and the revenues that could be made from a simple change in the system, they may be less likely to neglect and more likely to listen.