An excise tax on those goods that elected officials deem morally suspect has come roaring back. But the temptation to impose sin taxes is one that should be resisted for economic and moral reasons.
On May 18, Politico reported that the Senate Finance Committee was looking for ways to pay for President Barack Obama’s “sweeping health reform overhaul” by “slapping an excise tax on ‘sugar-sweetened beverages’ for the first time, and imposing a uniform tax across wine, beer, and liquor, which are currently taxed at different levels.” According to the Congressional Budget Office, a tax of 3 cents per 12-ounce serving of soft drink (like the 18 percent tax on sugary drinks that New York Gov. David Paterson recently failed to push through) would generate $24 billion over four years.
What’s behind this is the notion that sugary soft drinks are one of the chief culprits of a national epidemic of obesity. According to the Centers for Disease Control and Prevention, obesity rates doubled among adults between 1980 and 2000. About 60 million adults, or 30 percent of the adult population, are now obese.
Never mind if you have freely chosen to smoke a cigarette or drink a cold Coke on a hot summer’s day and, mirabile dictu, you take responsibility for your actions. The New Puritans who are ready to dramatically expand the welfare state and limit personal freedoms claim to know what’s best for you.
In “Blaming the Food Industry for Obesity,” BusinessWeek blogger Cathy Arnst recently reported that “two new studies conclude that the food industry is following the tobacco industry’s play book to ensure that we keep loading up on calories, and as a result virtually all of the weight gain in the U.S. over the last 30 years can be attributed to eating more, not moving less.”
Arnst also quotes a study by two university researchers who tipped their hand when they titled their work: “The Perils of Ignoring History: Big Tobacco Played Dirty and Millions Died. How Similar Is Big Food?” Researchers Kelly D. Brownell and Kenneth E. Warner concluded that although there are differences between tobacco and food (a startling insight for sure) there are “significant similarities in the actions that these industries have taken in response to concern that their products cause harm. Because obesity is now a major global problem, the world cannot afford a repeat of the tobacco history, in which industry talks about the moral high ground but does not occupy it.”
Brownell and Warner also grudgingly acknowledged that personal responsibility and freedom are values cherished by Americans, but “they obscure the reality that some of the most significant health advances have been made by population-based public health approaches in which the overall welfare of the citizenry trumps certain individual or industry freedoms.” In other words, the government knows better than you do how to feed and raise your children.
From the A.E.I.: