A Fat Tax on Thin Wallets: Soda Politics Fizzle in NY

By Michelle Chen Mar 11, 2010

Can the government cure an epidemic by passing a bill? Sounds too good to be true, but like many health claims, New York’s so-called “fat tax” proposal comes with a big disclaimer: the idea of reducing obesity by imposing a surcharge on unhealthy habits churns the debate over equity, race and privilege in our food system. Amidst an imploding budget, Governor David Paterson’s proposed “sin tax” on sugary soft drinks is an awkward attempt to legislate dietary changes. Some hail it as a challenge to the junk food hegemony, but in reality, the poorest New Yorkers, particularly those living in racially segregated underserved neighborhoods, need a lot more than a pinch in their wallet to embrace a healthier “lifestyle.” Ideally, the obesity tax is designed to encourage people to opt for water, juice or some other alternative to the usual hypersweetened fizzy elixirs. As with the cigarette taxes that many credit for reducing smoking, the idea is to deter people from harming themselves by raising the consequences of making an unhealthy choice. If only it were that simple. Consumption-based excise taxes are generally considered to be regressive, since they pose a greater burden on struggling households that can’t afford any price hike, however morally correct. One obesity researcher at the University of Alberta (apparently, even an awesome universal health care system doesn’t cure fatness), told CanWest News that such taxes could result in punishment but not discipline:

“It’s always a concern when you talk about taxation of food, you have to figure out who consumes those foods," said John Spence. Foods high in fat and calories and low in nutrition can often be cheaper, and more filling, than healthier foods. Adding a tax to the foods low-income people already tend to opt for would be akin to "taxing the poor," said Spence. "I don’t think a junk food tax, or a soda tax, or a bad food tax — whatever it is — on its own is going to be effective," he added. Other measures, such as subsidizing nutritious foods to make them more affordable would have to be taken in concert in order for a junk food tax to really make a difference, he said.

When Paterson first rolled out the fat tax in 2008, New York Times columnist Clyde Haberman challenged the Governor’s logic: why levy a "progressive" tax that targets the poor while allowing agribusiness and other food industries to keep fattening their bottom line while fattening our bottoms?

“If the governor is really insistent that we’re levying this tax because of a public health concern about obesity, that leads me to ask: O.K., where’s the fast-food restaurant tax?” said James Parrott, the chief economist and deputy director of the Fiscal Policy Institute, a liberal research group…. By absolutely no coincidence, the New Yorkers who pay these particular taxes tend to be those who can afford them the least. Poor people spend disproportionately on smokes, booze and unhealthy soft drinks, not to mention on the prayer that God will drop everything else and shower lottery millions on them. These are “habits that are more common among those who have the least amount of political power,” said Andrea Batista Schlesinger, executive director of the Drum Major Institute for Public Policy, a liberal but nonpartisan research center in New York. “To do something in the most politically efficient way is to tax or hike the fees of those who have the least power,” she said.

But once again, Paterson, who has had his own moral position challenged in recent weeks, is using dietary moralism to plug the budget gap. The rhetoric about obesity appears to be incidental to the main political reality: tax hikes are hard to swallow in times of fiscal crisis, so politicians may sugar-coat them with a social cause and target them toward people who wouldn’t have donated to their campaigns anyway. It’s true that Paterson has promised to couple the tax with other initiatives to encourage exercise and enhance access to healthy foods in underserved neighborhoods. And none of the concerns raised about the soda tax should foster public sympathy for the beverage industry, which has countered Paterson’s paternalism with a populist crusade for soft drink liberty. Taxation, when implemented equitably, can be a useful lever for changing people’s behavior. But it doesn’t seem that this proposed tax was designed with food justice or health equity in mind, given its scientific uncertainty and inherent racial and class bias. So far, we’re not seeing a parallel effort to dramatically change the urban food landscape, so that nutritious fresh produce is as accessible to poor kids of color as it is to yuppies living next door to a swanky food co-op (but wait, that would require spending money, and the whole point is to plug the budget hole, right?). Will the First Lady’s ambitious national anti-obesity initiative get snared on the narrow “personal responsibility” canard? Or could the campaign raise the profile of obesity, and its race and class contours, to advance structural reforms that involve positive incentives, public education, and the political and economic empowerment of consumers? For now, in place of a national health plan, states are chewing on a fat tax. Should we be cheering Paterson’s dietary evangelism when it falls heavily on people already paying for socioeconomic inequality with their health? Can the government make a moral case for extracting money from the poor for their own good, when massively subsidized corn growers continue to swell urban America’s sweet tooth? Those questions are a little too heavy for Albany, which seems more worried about balanced budgets than about balanced diets, or for that matter, balancing the health burden of marginalized communities. (h/t Robert Knight at WBAI) UPDATE: Monica Potts makes some interesting points in response to my piece on TAPPED. Clearly, we’re both in favor of progressive policies to check the obesity epidemic, but she takes the more optimistic view that even though this tax is essentially regressive, the potential disproportionate impact on poor people is offset by the overall progressiveness of the projected behavioral modification. Granted, New York has made efforts to enhance access to healthy food in marginalized communities, but we’re still very far from a comprehensive movement toward real food equity. Meanwhile, the punitive tone of policies like this still hit hardest the people who are already struggling with both poor health and limited options. (As for the scientific uncertainty, yes, we know excess sugary drinks are linked to health problems. But I’ve included a link to an analysis of fat-tax policies that raises questions about how useful a tax would be in *promoting* healthier choices, which is ostensibly the key to this policy). No doubt that rationalizing the price of harmful products can have an impact on unhealthy behavior, but advocates should be concerned about the emphasis on an essentially regressive tax, while efforts to tackle the structural issues are limited and harder to sustain in a time of fiscal crisis. Image: Best Ad

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