Friday, October 15, 2010

Food taxes take a bite out of family budgets

Just as many families are struggling, many municipalities across the country are also facing economic uncertainty. To alleviate financial woes, many of these cities and states have already, or are considering, increased or exise food taxes disguised as "health initiatives" to reduce obesity. Most of these proposed taxes target sugar-sweetened beverages and "junk food." But while politicians argue that these taxes support efforts to promote healthier lifestyles by limiting unhealthy choices, the bottom line is that it's a government money grab – and they're stealing from the mouths of babes.

Currently 31 states exempt food for at-home consumption from the state sales tax, though many of those pay local food taxes instead. Eleven states tax groceries at a lower rate, and five tax at the full rate but offer rebates. Two states provide no off-set for food and tax at the full rate. According to the Center on Budget and Policy priorities,

For a family of four that spends the lowest amount considered necessary for a nutritious diet and lives in a typical state that taxes food, sales taxes on food cost some $350 a year. That amount is more than a week's income for a family at the poverty line.

That was in 1998. One can only imagine what food taxes cost families now that we've seen record taxes increases at every level. Additional taxes, like the soda tax, only serve to make already tight budgets even tighter.

One might argue that if the unhealthy foods are more expensive, people will buy less of them and more healthful foods. But the truth, according to a recent study, is that the cost of fruits and vegetables has increased by 200% since 1983, 3 times greater than the increase seen in sugars and sweets, and roughly 6 times the increase seen in carbonated beverages. Like it or not the reality is that if the cost of unhealthy foods goes up, people will just be spending more money buying less of any food – not ideal in these economic times.

Yes, sometimes I'm stunned and saddened when I see families at the grocery store with a cart full of "junk" food. There's nary a person out there who doesn't know that soda is full of sugar, that chips and Oreos are laden with fat, and that fruits and vegetables are good for you. So, I ask myself, why are they feeding themselves and their children junk and avoiding fruits and vegetables? And then I remember that those five seconds I spent looking at those people with that cart are just a snapshot of their lives –I have no idea what's going on at home or what food lands on the dinner table - and I'm in no position to judge.

The bottom line is that year after year, studies have shown that when it comes to what drives consumers to purchase certain foods, taste usually wins out (albeit just slightly) over price – and one could argue that chips are tastier and cheaper than spinach. But cost is still a huge factor. So why don't we cut the taxes and let people have more money to choose healthy foods?

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