Monday, October 9, 2017

After Cook County scraps soda tax, try a tax on deceit

     When ordinary politicians lie, and the lie blows up in their faces, do they shake their fists to the sky and exclaim, "But it looks so easy when Donald Trump does it!"?
     I should call Toni Preckwinkle and ask.
     The Cook County soda tax was never about battling obesity or diabetes. Rolled out Aug. 2, the penny-an-ounce tax was met with public outcry stoked by ferocious advertising by the soft drink industry.
     The Cook County Board president kept insisting that, rather than a bald cash grab, the tax was instead a basic health measure, like flossing. Your kids are too fat, Preckwinkle told voters, and since you can't keep the little brats from guzzling Mountain Dew, I'm going to help you by picking your pockets.
    And to think people objected.
     But all those TV commercials, some $5 million worth paid for by former New York Mayor Michael Bloomberg ignored one simple fact, and I wish I had thought to check this a month ago: These taxes don't cut obesity.
     Cook County isn't the only fiefdom to attempt this stunt. About five years ago, over in Europe, nanny-state governments made a push to cut obesity. Turns out —who knew? — Europeans are also too fat, just like Americans. So Britain, France and other nations dabbled with jacking up taxes on fats and sugars, closely observed by an army of clipboard-wielding academics.
     What did they find?
     "The overall impact of a soft drink tax on calorie consumption is likely to be small," concluded "The Effects of A Soft Drink Tax in the UK" published in the May 2015 issue of Health Economics.
     Not only don't the taxes cut obesity but—and this is so delicious, were it not so sad—when it comes to poor consumers in particular, increasing taxes on unhealthy foods like sweetened soda has one of those counterintuitive effects that make human nature such a delight to ponder.
     A new study found that increasing tax on unhealthy food decreased the consumption of . . . wait for it . . . healthy food, as low-income consumers cut down on lettuce so they can continue to enjoy the junk they like best.
     "A nontrivial number of respondents in the low-income group (39 percent of the total) behaved in a manner opposite to the intention of the policy," noted "Distributional Impact of Fat Taxes and Thin Subsidies," published last month in The Economic Journal, referring to a study in France. "They allocated a larger share of their budget towards unhealthy food and a smaller share towards healthy food"
     Ah people, God love 'em.
     Of course there are lots of studies and, not being a politician, I must be fair and mention some studies support such taxes; Denmark, for instance, seems to have blunted butter consumption with a high tax. But still, it's most pronounced effect is not improving health but raising money.
     And that's an important effect. Cook County is broke, and somebody has to pony up money to run the place. Though why the burden should fall unduly on the shoulders of poor people who bring pleasure to their lives with Coca-Cola on a hot day is beyond me. Plus, I have to mention, from firsthand knowledge, that the tax was also a logistical and PR nightmare for groceries, who had to administer the tax.
     Customers were alienated. I still can hardly slink guiltily into Sunset Foods without feeling like the assistant manager is giving me the stink eye for trying to get back the Cook County tax they unfairly charged me on a case of flavored, though not sweetened, bubbly water.
     Now the soda tax is pretty much cooked, with 12 of the 17 commissioners on the County Board Finance Committee pledged to repeal the tax when the it meets Tuesday. The full board is scheduled to vote Wednesday.
      I guess the finance committee will just have to find something else to tax. A shame they can't conjure up a way to tax lying; the receipts would be enormous, though I imagine our political leaders would complain of their cost to their pocketbooks. To which we say: Well boo-hoo, just suck it up. It's for your own benefit.


  1. Philadelphia has a 1.5¢ per ounce tax on pop. That's so high, the bottlers no longer send 2 liter bottles into Philly, as the tax is $1.05 per 2 liter bottle, which is more than it costs on sale.

    Even worse is the fact that it's become apparent over the years that sugar isn't the real culprit, high fructose corn syrup [HFCS] is. There's something wrong with that stuff & when they finally figure out what that is, it will be banned. There was far less obesity before HFCS was used. But we have HFCS because the sugar beet farmers in North Dakota managed to get that ban on imported sugar, which has made around 300 farmers in North Dakota multi-millionaires & caused something like 20,000 middle-class candy factory workers in the Chicago area to lose their jobs, as the candy manufacturers moved their production to Mexico & Canada to take advantage of cheap Cuban sugar, which sells for about 4¢ - 5¢ a pound, compared to at least the 20¢+ price for American sugar. Last year, 300 workers at the Nabisco plant on the Southwest Side lost their jobs making Oreos when Mondalez moved their production to Mexico, again to buy cheap Cuban sugar, which like most Cuban products is banned from the US, but comes in anyway in candy & cookies from Mexico & Canada, which gladly buy it!

  2. What exactly does the county do that requires taxes? Runs the jail, I guess, and maybe a couple of other things, but honestly, who even cares?

  3. Apparently, when the County Board initially approved the tax, designed specifically to save us all from the evils of sweetened soft drink, they expected we outraged citizens to band together and dump our soda-pop in the harbor. A clear attempt to whip up the latent, overly zealous and overweight beast in our revolutionary souls. Instead we spent our money in nearby counties, thusly avoiding the beverage tax but also denying Cook County the revenue from sales tax on our purchases.

    Ultimately, I think what doomed the tax was billionaire Bloomberg sticking his patronizing New York nose into Chicago's business. That shit don't fly here.

  4. The fact that poor folks would rather give up healthier food than sweets is not surprising; when you are being deprived of so many other basic human needs, you will cling to the few pleasures still available.

    1. A recent episode in a Korean soap opera addressed this very issue: a woman, reunited with her rich family after 25 years, takes her brother out to eat in a street market restaurant. The restaurant is scroungy, the waitress rude, and the utensils not shiny clean. He refuses to eat and after watching his sister scarf down 2 portions of the delicious food she ordered, asks, "You wouldn't eat unhealthy food just because it tastes good, would you?" No answer needed!

    2. Healthy food isn't cheaper more often than not. Besides, those using the LINK card aren't affected by this tax. It's harmed businesses on the county border more than it's prevented the poor from purchasing these drinks or forcing them to change their habits. And isn't this the reason, supposedly, more money is needed? To cover the health care costs for this population?

  5. Gonna be a bit of a contrarian on this one...

    The idea that Preckwinkle tried to sugar-coat this tax by saying it was a health measure doesn't bother me at all. *Every* tax is for the sake of generating revenue, regardless of what other goals are supposedly being pushed.

    *Every* tax that is indiscriminately charged across the board falls "unduly on the shoulders of poor people," relative to folks with more disposable income. Cigarette tax, gas tax, alcohol tax and on and on.

    The alcohol tax pisses me off -- should I start a movement to have it rescinded? The bottled water tax and grocery bag fee piss me off -- so I buy a lot less bottled water and reuse bags a lot more than I used to, but I can understand the rationales behind those measures, including the raising of revenue. To me, the biggest problem with this tax was the ham-handed way it was designed and implemented (see Neil's Sunset Foods fiasco column) and the fact that it's very late to the party when it comes to gouging the citizens.

    I just don't agree with the argument that encouraging Americans to ingest less sugar is a silly idea, in itself, or that this is a completely inappropriate possible new frontier when it comes to taxing things that are non-essential and that folks would do well to consume less of.

    1. I kinda agree with you Jakash. Am kind of troubled by the triumphal tone of most of the comments. Maybe the killing the tax is a victory for common sense, but most of the Cook County budget seems to provide services for the poor. They may end up taking a hit.


    2. While I realize the comments don't need another "me too!", the news of Prof. Thaler winning the Economics Prize did make me wonder whether the tax would prove to be a "nudge" towards behavior change, and now we likely won't find out. Over my life, the portion size for soda has become ever-larger, and the percentage of caloric sweetener as a part of the average diet has increased as well. We know there's a correlation between high tobacco taxes and reduced use. It would have been neat to see if a similar correlation might have occurred, or whether portion sizes would have been reduced w/r/t soda.

  6. I am a true man of genius, as the following illustrates; another way of subverting the systems of control. I suggested to homeless people that they can buy sweetened beverages on their Link card for a lower amount because the are not subject to the soda tax. Then the can resell the products to their friends and acquaintances at a mark up. Thus have cash available for sundries or bus fare that the Link card doesn't cover. Curses, the Cook County Board is too clever for the likes of me.

  7. Subverting the systems of control sounds like anarchy to me. A step down from libertarianism and perhaps a step up from trumpism.


    1. A step above trumpism, eh? Now that's personal. Imagine what it is like being into week four and your Link card has run out. Those few extra dollars can mean a lot to someone on a tight budget. If I didn't know better I'd think you care as much for the poor as Trump cares about the desperate people of Puerto Rico!

  8. I'm compulsive, so I point out that the Sun-Times version says, "... to repeal the tax when the it meets Tuesday." The it?


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