Thursday, March 18, 2010

the fat tax

I thought I'd post my thoughts on the idea since people are suddenly talking about it again. In my opinion, otherwise reasonable people get a little obtuse when you use the word "tax." The tax isn't about "punishment," and it's not the government trying to tell you what you can and can't eat. You can still buy cigarettes and booze!

It's about steering behavior to more healthful eating, the idea being that while people buy cokes and twinkies because they love them, the fact that they're super cheap is also part of the equation for many people. This is especially true of a lot of the stuff you find in the middle of the grocery store, the box dinners and such that feed 4 people for $1.99. So the theory goes, if the price differential between crap and produce were lessened, the balance between these foods in people's diets would also shift.

And before we get all anecdotal about all the fat people you know that will still buy twinkies, consider this: in the case of tobacco use, cigarette companies have admitted (.pdf) that higher taxes are a major curb on use among both teens and adults.

Still, if the fundamental problem is the low price of bad food compared to good food, a better idea than disincentivizing soft drinks via a new and unpopular tax would be to deal with the cause of rock-bottom coke prices in the first place: the corn subsidy. Much of the trouble with the American diet can be traced back to the overproduction of corn and soybeans, from which stem the low prices of everything from soft drinks and twinkies to french fries, boxed dinners, and ground beef. These crops are overproduced because the lion's share of farm subsidies are earmarked specifically for those growing corn and soybeans. Moreover, the subsidy is based on how much you grow, meaning farmers are encouraged to produce as much as they can even when the price of corn has bottomed out.

If the government wanted to encourage more healthful eating, the single best thing it could do would be to change corn and soybean subsidies to fresh produce subsidies.

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