Pay Taxes, Lose Weight?
As many of you know, New York is in some financial trouble. A “crisis” if you will. The empire state is projected to be in the hole 8.2 billion dollars in 2010. The urgency of the deficit led to the closing of 41 state parks and 14 historic sites. This is a brilliant idea and I’m sure park goers appreciate it. Park goers being defined as people impacted by the recession that are looking for fun, inexpensive and healthy entertainment for themselves and their family.
That cut wasn’t enough and New York feels that the new win-win situation is to tax unhealthy beverages, increasing revenue and decreasing health related issues. Mayor Bloomberg, an expert on the subject (just kidding) said that he expects the tax to reduce “sugary beverage consumption by 10% or more” (Source). The sugared beverage tax would encompass drinks that consist of less than 80% juice, and the proposed amount is $.01 per ounce of beverage.
Dr. David Just, behavioral economist has given lectures about the relationship between food consumption and the price of said food. In a lecture he gave at Cornell University he brought up several interesting points.
- Households usually have one person who deals with all food transactions, the person that does the grocery shopping. The rest of the house is oblivious to price changes from minor to substantial simply because they don’t see it or have to deal with it.
- Trends show people are more responsive to price changes in vegetables than they are to foods high in sugar, sodium or fat. If the price of vegetables goes up, less are sold but if the price of soda increases, the intake remains constant.
His bottom line was that changing prices have not and will not affect what people are eating or drinking unless those changes are drastic. A penny per ounce of sweetened beverage is not going to change the amount consumed.
Additionally, according to a New York City study “those living in households with income less than 200% of the federal poverty level were more likely to be frequent soda consumers than those in households earning 600% or more of the poverty level.” (source) Translation: those with less money buy more soda. Those with more money buy less soda. Therefore the sugar tax is another “tax on the poor.”
So, New York for the well being of New York residents. There’s blatant evidence against the idea of taxing for better food choices, so do what you need to decrease the deficit but don’t pretend it’s a “win-win” for all of us.
Weigh in! Do you think the sugar beverage tax is a good idea?