Sin For Ye, “Pause That Refreshes” For We
posted at 6:47 am on July 29, 2009 by Mitch Berg
The Obama Administration is borrowing a key tenet of his “Heathcare” strategy from an infamous Minnesota initiative from the 1990’s; “Soak the Addicts Who Don’t Have Clout”.
In 1998, the State of Minnesota and Blue Cross sued and won $6.1 Billion from “Big Tobacco” – which was, of course, passed on to “Big Tobacco’s” customers, aka “smokers”.
But that was safe, because smoking – and smokers – were indefensible. So nobody defended them.
Of course, the to make money, the strategy depends on having a boundless supply of people with declasse addictions and problems – smokers, drinkers, and – as the LA Times informs us with breathless excitement – the overweight and obese.
When historians look back to identify the pivotal moments in the nation’s struggle against obesity, they might point to the current period as the moment when those who influenced opinion and made public policy decided it was time to take the gloves off.As evidence of this new “get-tough” strategy on obesity, they may well cite a study released today by the Urban Institute titled “Reducing Obesity: Policy Strategies From the Tobacco Wars.”In the debate over healthcare reform, the added cost of caring for patients with obesity-related diseases has become a common refrain: most recent is the cost-of-obesity study, also released today by the Centers for Disease Control and Prevention. It finds that as obesity rates increased from 18.3% of Americans in 1998 to 25% in 2006, the cost of providing treatment for those patients’ weight-driven problems increased healthcare spending by $40 billion a year.If you happen to be the 1-in-3 Americans who is neither obese nor overweight (and, thus, considered at risk of becoming obese), you might well conclude that the habits of the remaining two-thirds of Americans are costing you, big time. U.S. life expectancies are expected to slide backward, after years of marching upward. (But that’s their statistical problem: Yours is how to make them stop costing you all that extra money because they are presumably making poor choices in their food consumption.)
[Taxes raised on “unhealthy” foods] would pay for a lot of healthcare reform, which some have estimated will cost as much as $1 trillion to implement over the next ten years.And here’s the payoff: Conservatively estimated, a 10% tax levied on foods that would be defined as “less healthy” by a national standard adopted recently in Great Britain could yield $240 billion in its first five years and $522 billion over 10 years of implementation — if it were to begin in October 2010. If lawmakers instituted a program of tax subsidies to encourage the purchase of fresh and processed fruits and vegetables, the added revenue would still be $356 billion over 10 years.
Let’s be honest: the more affluent Americans will not feel the effect of a soda tax, nor that of the inevitable tax on fast-food purchases from McDonald’s, Burger King or Taco Bell…But let’s play along with the Ivory Tower bigwigs and self-appointed health gurus who are advocating the tax on “sugary” drinks as a means of off-setting the enormous costs of President Obama’s back-breaking health care initiative, as well as combating bad habits. Why stop at soda? How about a tax on every calorie-laden coffee drink served at Starbucks and its competitors? After all, a vanilla bean frappuccino with whipped cream is more than 500 calories, a beverage that health researcher Mike Adams calls “dessert in a cup.” Throw in a scone or brownie with one of those Starbucks “desserts” and a consumer is approaching, at mid-morning, the daily recommended calorie intake.
No knock against Starbucks, which I patronize, but it’s fairly inconceivable that either Congress or nutritionists would classify that chain’s offerings with the low-hanging taxable fruit of Pepsi and Coke. Taking this argument further: why aren’t the revenue seekers proposing slapping a “sin” tax on the following items that aren’t at all healthy (whether organic or not): butter, cream, eggs, bacon, corned beef, mayo, Godiva and Lindt chocolates, foie gras, triple-cream Brie, the entire dessert tray at a ritzy French restaurant, Ben & Jerry’s ice cream, fried clams, squid, shrimp and oysters, entire menus at Chinese restaurants (both cheap and pricey) and fresh-squeezed orange juice? And maybe a tax credit ought to be awarded to those consumers who purchase olive oil instead of butter.
To add insult to injury; not only are “sin taxes” a way for the majority to punish the minority – they don’t work, either as revenue-generators or as societal behavior modification:
The consequences of the sin tax are often the very opposite of those intended by its designers. Rather than increasing revenue, the sin tax can reduce it. Rather than discouraging what are regarded as morally questionable behaviors, the sin tax can make them more appealing. Rather than reducing what are perceived to be internal costs of the sin, the sin tax can increase them and expand them to society as a whole.
The evidence that sin taxes are a failed policy approach is incontrovertible. According to, “taxes on sugar-sweetened soft drinks do not necessarily advance the overall public interest, may be regressive in nature, and hardly ever work as intended.” The bottom line, say researchers Richard Williams and Katelyn Christ, is that a convincing body of evidence tells us that boosting food and drink prices “is not sufficient to make ‘fat taxes’ a viable tool to lower obesity.” That’s because soft drinks are really a small portion of most people’s diets.
In short – sin taxes are a flop. They drive down revenue, sap economic and personal freedom, and yet don’t affect behavior. What they are is a handy way for those that are in charge in society to tell those that are not “there are gonna be some changes, here”.