I think Christine Gregoire’s sin tax is a mediocre approach to an excellent idea. In addition to taxing poor consumption, the tax plan should also create incentives for healthy foods. With that in mind, I present the Washington State Health Improvement Tax.
Rather than a flat tax on products that are ‘sin’ items, tax products based on the level of Bad Things[*] in them. For example, candy and gum would be taxed on the grams of sugar included per serving. Cigarettes would be taxed on the levels of tar and nicotine. The tax would discourage ‘more sinful’ items because of increased cost, and it creates a market incentive for manufacturers to create healthier products.
It’s illogical to tax sugar-free gums that prevent tooth decay (a health benefit) the same as sugar rich ones that contribute to decay and diabetes. Low sugar gums should be taxed less, giving them an market advantage. Cigarettes with lower levels of tar and nicotine would be taxed less, encouraging smokers towards cigarettes that are less addictive and toxic. Fat, juicy premium steaks would be taxed more than lean cuts. Milk with growth hormones would cost more, making organic milk more cost competitive.
* Bad Things is defined as FDA regulated (food) items consumed by humans that cause poor health. The list should include, but not be limited to: Nicotine, saturated fats, trans fats, sugar, high fructose corn syrup, BGH, high levels of sodium, e coli, etc.
The tax scale should be progressive, so that the most unhealthy products are taxed the most. Dieticians and nutritionists should determine the level of ill health each ingredient causes and the tax implemented based on that.
For example, every gram of sugar above 10 per serving is taxed at the rate of $0.01 per gram. Every gram of saturated fat above 1 is taxed at the rate of $0.10 per gram. Each mg of sodium above 250 per serving would cost $0.01. Under this scale, a 2 oz. Snickers bar with 28g of sugar ($0.18) and 4g of saturated fat ($0.30) would cost an extra $0.48. A slice of Costco chocolate cake would cost an extra $0.20. A bag of Nacho Cheese Doritos would cost $0.80 more.
To make compliance easier, charge the tax at the wholesale level for prepackaged foods. Prepared foods would have to be taxed at retail.
An optional nicety would be providing incentives to encourage merchants to include nutrition summaries on checkout receipts, as well as how much they contributed to the WS-HIT by making unhealthy choices.
Piggyback the WS-HIT tax with an excess packaging tax that taxes products with high levels of waste packaging. Rather than a $0.01 per ounce tax on bottled water, make the tax progressive so that it encourages consumers to purchase products with less packaging. Christine’s tax does not encourage someone to purchase a gallon jug of water versus 8-8oz bottles. The 8-pack has significantly more packing waste and should be taxed more. The large bottles that the Culligan man delivers are reused and should not be taxed at all.
That’s a tax proposal I’d vote for. Would you?
I’d definitely vote for that! Assuming this were my state or federal legislation… its brilliant. Long term benefits would be healthier people, decreased obesity, heart disease & cancer, which in turn would lower health care costs – another growing weight on the tax payer. The only problem is, our government already subsidizes the corn industry and this will likely curb high fructose corn syrup consumption, not to mention the plethora of unhealthy snacks with some kind of corn ingredient, forcing govt. to subsidize further. Farm lobbies are so powerful now, hard to imagine them letting any governor/congressman/senator get too far with this. But if it did get that far, vote for it I would and tell all my friends too. BTW, A great documentary on the state of the food industry: Food Inc.
As always is very different over here. We do pay a lot of so-called indirect taxes. For example, the real cost of a tobacco box (20 cigarretes) is probably around Eur .75 cents, but the adicts pay 3, 4 and even more Euros.
I was a smoker since 1987 to 2007. Yes, that’s about 20 years. And most of the time I was a heavy smoker, with a minimum of two boxes a day. I’m pretty good right now (I train hard 5 times a week and I did my first half marathon[1] last December), but when I was an absolute and devoted phisical and psicologicaly addicted poor guy, the taxes weren’t a very strong deterent.
I don’t drive myself (for real, I don’t need) , but I know that the gas is expensive over here too. We pay more than 1 euro/litre. That’s about USD 5 per gallon. And do you know what? Most people would kill his/her mother rather than forget about driving to every single place, even 100 m far from home.
The taxes are a way of collecting money, but they aren’t a way of solving other kind of problems.
My Eur 2 cents,
[1] http://en.wikipedia.org/wiki/Half_marathon
While I very much like the approach of taxing stuff like sugar and fat, the reality is that rather than producing more healthy food, the food-industry would look for ways to sidestep the laws by finding other stuff to put into the food that is as unhealthy but not in the law.
But I wish countries would be as strict with the food their citizens want/need to consume as they are with the taxes the citizens have to pay.
It’s very difficult to make people change their ways of life is they actually like them the way they are – and consequences only arise after 20 or more years.
The primary problem we’re trying to solve is rising health care costs, with a secondary goal of encouraging people to eat healthier. Since we obviously cannot force people to eat well, or stop smoking, at the very least we can tax the poor choices. While the taxes may not be enough of an incentive to get people eating healthy, it will help pay for the additional levels of care they require.