“No taxation without representation!” Most of us remember that battle cry from our American history lessons in grade school. Today, it seems the slogan ― at least for candy makers ― should scream, “No taxation with such misrepresentation!”
Earlier this week I came across a headline that suggested candy taxes don’t inhibit caloric intake. According to a recent report by the Tax Foundation, a nonpartisan research group based in Washington, D.C. (where else, come to think of it?), the popularity of state legislatures to slap taxes on the sale of candy and soda in the name of curbing obesity doesn’t quite measure up as an means of improving the citzenry’s health.
The report, dubbed “Overreaching on Obesity: Governments Consider New Taxes on Soda and Candy,” drives home the notion that mandating a healthier public through sin taxes isn’t effective.
It is, however, an easy way to raise revenue in the name of generating funds for health education, although those monies generally head toward a general fund. And, as a study by Yale economist Jason Fletcher claims, taxation often prompts substitution, not slimming.
According to the Tax Foundation’s report, “… Fletcher’s analysis concludes that when adolescents stop drinking soda due to price increases, the decrease in calories consumed is completely offset by increases in calories consumed from other beverages.”
And what about candy? First, one has to define candy in order to tax it, which isn’t as easy as one might think. Legislators often have a propensity to complicate when drafting legislation.
Somewhere in their minds, lawmakers decided that candy could mean any “preparation of sugar, honey (I thought this was good for you), or other natural or artificial sweeteners in combination with chocolate, fruits, nuts (also good stuff) or other ingredients or flavorings in the form of bars, drops or pieces. ‘Candy’ does not include any preparation containing flour or requiring refrigeration.”
That definition, used by many sin-tax states, excludes products such as Kit-Kat and Twix, but could still make certain breakfast and granola bars taxable.
The Tax Foundation argues that “Once a state has decided to treat candy differently from other groceries or other goods and services, this necessitates complex definitions and unequal treatment of specific products.”
Given its mission to promote sound tax policy, and principles such as simplicity, neutrality, stability and transparency, the Tax Foundation argues that “taxing all final retail sales equally and reducing rates overall” eliminates this smoke-and-mirror, better-for-you tax.
Whether you’re part of the 1% or the 99%, no on wants to pay an unfair tax. Taxing candy simply to raise revenues is just that. It’s misleading in suggesting that this will help resolve the obesity problem. As the Tax Foundation treatise notes, “The solution to the obesity problem will not come from abdicating personal decisions, like eating choices, to government. It will come from consumers making prudent decisions about their own diets, exercise and health needs.”
So I urge everyone to take a look at this dispassionate analysis of sin taxes, which can be viewed at the Tax Foundation’s website, www.taxfoundation.org.
As our national and local electoral campaigns begin to swing into full gear, it’s more critical than ever to be informed on issues. Nonpartisan groups, such as the Tax Foundation, can provide the informational underpinnings for reasoned discussion and, hopefully, just solutions to the critical problems facing us all.
