Aamer Ghaffar's Blog

I think that candy is something that can and should be taxed at a rate higher than “regular food” items, and I do not see why the state should not be able to squeeze a little extra revenue out of consumers who make poor diet choices (and wouldn’t it be great if it then spent all of those newly found tax dollars on nutrition programs?). With obesity such a prevalent issue in this country, the government should be doing every common sense thing it can to ensure that people are, at the very least, informed consumers, and, possibly, “nudged” (to borrow a term from Thaler and Sunstein) into making the right choices with regard to health. While the ultimate choice should of course be left up to the individual, I would argue that something like an increased candy tax does not inhibit personal freedom, even though it does entice individuals to come to the “correct” conclusion on their own.

This is because, first of all, it provides the consumer with a clear message (i.e., modern medical science has decisively proven that you should not eat a lot of candy because it can have detrimental health effects when consumed in large amounts, thus we are going to tax you on it so that you might consume less), but, at the same time, still allows the consumer to purchase as much candy as he or she can stomach. No one is prevented from exercising his or her “right to diabetes” but instead gently pushed to make a better decision. This would be particularly helpful for the least educated and poorest members of society, who have the highest obesity and diabetes rates and the lowest amount of disposable income (and thus susceptibility to the tax).

With regard to determining what is or is not candy, and hence worthy of the tax, that one is easy. I would simply point to the now famous remark made by Justice Potter Stewart while defending his position on Jacobellis v. Ohio (an obscenity ruling): “I know it when I see it.”

The government already does require extensive nutritional labeling on food products, our country has informed consumers by the boatload. This taxation only serves to harm producers and demonize the candy industry now that big tobacco no longer has big bucks. Also, as cigarette and alcohol taxes have shown the addition of a sin tax does demonstrably little to change consumer behavior and convert them to the healthy way.

Also, if you have a tax with vague limits it will slowly creep into new categories whenever the municipal purse is getting tight. The notable problem with the obscenity ruling is that putting Potter Stewart at every checkout line would make grocery shopping into purgatory. Notice how we still have no legal standard for pornography.

Thank you for your comment, Zachary. It was very interesting to hear your point of view.

First, I agree with you that consumers are “informed” when it comes to nutritional information. However, nutritional labeling is extremely complicated, especially for the average consumer, and I would argue that many people do not understand what the labels mean. For example, without searching the Internet, could you honestly explain what monosodium glutamate, thiamin mononitrate, maltidol, sodium bicarbonate, and sodium aluminum phosphate are and whether or not I should avoid some of the ingredients and not others? If you can, I suspect you either a) were a science major, or b) are abnormally well-informed. Do you think that the average consumer, with a high-school education or less could? What about a very smart liberal arts student specializing in Shakespearian prose? I suspect most would probably not be able to make an accurate differentiation despite being “informed by the boatload.” However, if they suddenly noticed that the cost of unhealthy items such as candy went up, they may “get the point” and try something else (hopefully something healthier!).

Second, your assertion that consumer behavior toward alcohol and (especially) cigarette consumption has shown “demonstrably little… change” as a result of the addition of taxes is simply incorrect. In fact, over the last fifty years, smoking rates have dropped dramatically, from a record high of 45% of the population being smokers in 1954 to approximately 20% in 2008 (Saad 2008). Granted, the massive drop off in smoking rates is not entirely attributable to taxes, but a combination of many initiatives (including public education regarding the risks associated with smoking), taxes can and do have an effect on consumption. For instance, a study by Flewelling, et al. (1992) showed that the first-year impact of the 1989 California tax increase on cigarette consumption coincided with a 5% – 7% decline in consumption. This is just one of many examples I could point to proving that the taxes do indeed work.

I concede that alcohol consumption has not seen the drop off rates that smoking has (though studies such as the Framingham study have shown moderate drops in consumption over the past fifty years), but I still think alcohol taxes are a good idea, especially if the proceeds fund alcohol education programs. This is because even though alcohol consumption can be beneficial when consumed in moderation (something that cannot be said about smoking or many of the ingredients found in junk foods, regardless of what the Corn Refiners Association tells you), the health benefits turn to detriments with only a slight increase in consumption. Thus, while you or I may be capable of monitoring our intake of alcohol in such a way as to experience only the health benefits and not the detriments, I am not convinced that all are capable of this feat. Thus, a governmental “nudge” such as an alcohol tax may be helpful. This is especially true amongst those lacking the education that you (I suspect) and I have received regarding the costs and benefits associated with consuming alcohol (e.g., the increased risk of liver damage—an unpleasant cost—versus the ability to dance like Baryshnikov after a few pints—an obvious benefit).

Finally, the slippery slope argument you present is not convincing. Though I concede that my “I know it when I see it” recommendation is far from scientific, I do believe that there should be some room for common sense when determining the answer to questions such as “what is or is not candy” or “what is or is not an obscenity.” Also, your supposition that a vague candy tax would “creep into new categories” ignores the question of whether or not a general—perhaps more clearly defined-tax has merit. If a candy tax lowers consumption of an unhealthy food, though still leaving the option available to consume as much as you like, isn’t that a good thing? And as far as the candy producers are concerned, if they are fearful of taking a profit hit as a result of new taxes aimed at lowering consumption, perhaps they should start selling something that isn’t detrimental to society.

By taxing heavily on items at are dubbed “unhealthy”, is the state trying to regulate consumer decision making in regards to lifestyle?