Saturday, February 20, 2010

Snack on This...

Today, we are going to keep our thoughts and feelings short as we attack the Governor's budget.  It is true that the budget was released over a month ago, but today we have decided to take exception to one particular item.

Governor Deval Patrick has included in his budget a new tax on candy and soda.  Last year he did the same thing and the legislature, which it usually does with most of the Governor's budget, ignored it.  In a year of rampant tax increases to make up for years of fiscal mismanagement, the Massachusetts General Court saw it fit to discard this particular tax proposal.  Their judgment was wise in this regard.

Given the fact that it is an election year, quite possibly the first since the early 90's that Republicans have a real chance to gain seats, State Reps and Senators will be loath to give voter more reason to go Republican.  Taxes in general roil people up enough.  The Republican implied that people are taking the tax in stride. Tax revenue, the paper argues, has gone up with the tax (the administration claims that is has gone up when the increase is factored out, trying to undercut the notion that people are in fact buying more and not less in-state, their methodology is not explained, however).  Quite to the contrary a sense of resign at one moment is not necessarily an act of forgiveness at the polls as many of Beacon Hill's elected officials may find out.

However the tax on candy and soda may strike a different cord, even nearer to the populist outrage that elected Scott Brown.  A significant part of Brown voters maintain a  libertarian bend within their personal politics.  These people are tired of the government--again particularly Massachusetts, rather than the feds--sticking their noses in their business.   Granted many of these people harbor unsophisticated beliefs about minorities, women, and homosexuals, but certainly not all of them do.  The tax on junk food would however, trigger that sense of popular anger since it is a naked attempt to discourage consumption of such foodstuffs.  It is a "we know better than you" attitude that a lot of people simply hate.

The intent of the tax is not necessarily bad, however it is guided by poor wisdom and a less altruistic lust for tax revenue.  Junk food is not good for health, especially when consumed in large amounts.  However, it is relatively inexpensive and numerous people do not take to heart the wisdom in the credo "the best things in life are either fattening or illegal" (or immoral).  The answer to these problems, however, may be a reassessment of the nation's food stamps programs and other nutritional assistance.  At the moment it is more than possible for food stamp recipients to go to the grocery store and stock up on Coca-Cola and Reese's Peanut Butter Cups.  Rather such programs should be modeled on the federal Special Supplemental Nutrition Program for Women, Infants and Children or WIC.  Under WIC, mothers are required to purchase only specific types of food like Skim Milk and they must purchase the lowest prices brand.  By comparison, food stamps loaded on benefit card are in dollar denominations, could theoretically be used to purchase steaks or lobster.

Correcting the Food Stamp program would require federal action, an increasingly unlikely prospect, given Washington being shifted into neutral.  However, that does not mean that Massachusetts should take up the junk food tax.  It is based on the same notion that junk food, like alcohol and tobacco, are bad for you and if we tax you on it, you'll be disinclined to purchase them (this however was not the motive of the sales tax on liquor, straight revenue was).  This notion is faulty for two reason.  People do not decrease use because of higher taxes and it is masked by a more sinister notion that taxation of addictions means an unlimited source of income.  Because drinking and especially smoking have virulent opponents to their continued availability, taxing them is usually accepted.  Junk food, however is not the same.

Some experts claim junk food is addictive, but no studies have proven this conclusively beyond the fact that any behavior, bad or good, can become habit if no self control is exercised.  Moreover, although many do not consume them as such, candy and soda are treats, something for a special occasion and taken in moderation.  The same may be said about liquor, but it is just as known as a means to get wild.  Like the actually addicting taxed consumables in Massachusetts, however, junk food consumption will not go down.

The cynicism of this approach will be played out when proponents claim that the cost will only be six  and a quarter cents on the dollar and therefore not a burden on people.  Wait!  It's not a burden so how will it discourage use?  The argument that the money will be used to fund healthy living programs and health insurance also falls flat.  There is no way to know if a person's high cholesterol, obesity, or high blood pressure is the result of chips and candy or over salted processed fatty foods from the freezer aisle, the latter of which will not be taxed.  As bad as these foods are, the true enemy of good health in today's society is a lack of physical activity.

There is also a problem of what defines junk food.  The soda issue could easily be restricted to what is already eligible for a bottle deposit, but candy and chips may not be so easy.  Consider Rhode Island's similar tax.  The sales tax is applicable to junk food and soft drinks that are less 50% juice (flavored iced tea for example, would be taxed in RI, but does not have bottle deposit in Mass).  However, Rhode Island has a convoluted sales tax system especially where food in concered.  Some things are taxed at different rates for different items or not taxed at all.  The technical definition of candy in Rhode Island for taxation purposes includes a “preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the forms of bars, drops, or pieces.”  However, if flour is an ingredient as it is Twix, Kit-Kats, or the like, it is not taxed.  How narrowly or broadly the law is written determines what will and will not be taxed.  Arguably, Rhode Island lawmakers decided that they needed revenue and ignored the loopholes as their state has notoriously high costs for such a small state (read  often corruption and graft).  Still, it makes the point that a Massachusetts tax similar to Rhode Island could either fall short of its more sanctimonious goals or lay bare a more craven attempt to grab all the money it can.

Lost in this debate, however if the impact it will have on those who do treat candy and soda responsibly.  There are no doubt thousands of people in the Commonwealth reach for their favorite soft drink or candy bar as reward in moderation.  Whether the tax is a burden or not, is it appropriate to single out one particular food item or other regardless of healthiness either for want of money?  Or is it appropriate to place sanction against the behavior of many because of the irresponsible actions of the few?

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