EN FR

"Wellness levy" on pop is just another name for a tax

Author: 2012/10/05

What Albertans really need right now is another tax: particularly, one to make us eat and drink in a manner approved by government bureaucrats. That’s the message of the Alberta Policy Coalition for Chronic Disease Prevention.

This group has taken it upon itself to ask the Province to impose a tax that would force us to make healthier choices in our selection of beverages. The Coalition even went so far in a Calgary Herald letter to the editor as to state that: “Making healthy choices can be easier said then done.” No, that is not the voice of your mother in your head that you’re hearing.  

Of course it can be difficult to choose the organic kumquat juice over the Big Gulp at 7-Eleven, especially considering the organic option is likely five times the cost of the soft drink, but the key word in this is ‘choose.’ The proponents of the nanny-state all too often seem eager to surrender choice on the alter of what’s good for us.

The coalition behind this food-tax campaign must have focus-grouped their messaging extensively, opting to call it a “wellness levy” instead of a “tax.” Taxes sound so negative. And it was brilliant to tack on the word “wellness,” as who is opposed to wellness? If only they could figure out a way to tie in kittens and hugs.

Certainly mother would approve. Maybe even Orwell.

Taxes are always easier to pass off on the people who pay them when the tax’s advocates claim that it will discourage negative behavior or support something positive. Consider a real world example. 

In 1992, the State of Arkansas passed a soft drink tax that was supposed to support its Medicaid (healthcare) program. After some time it came to light that politicians were simply using the revenue to fatten-up the government’s general fund. A clear tax grab.

But even if a “wellness levy” was directed towards putting cans of slim fast in school vending machines, it doesn’t change the point that food taxes are regressive. That is that they disproportionally penalize the poor. It’s not that the single mother with two kids doesn’t enjoy a frosty mug of fair-trade, organic orange juice, it’s that she can’t afford the $16 price tag. That is unless she’s Bev Oda and the taxpayers are picking up the tab.

Setting that all aside, would a food tax decrease the consumption of unhealthy foods, and in doing so, make people thinner? In a 2008 study by the Mercatus Centre of George Mason University found that 20 per cent tax on a 75-cent soft drink (upping the price to 90 cents) would see the Body Mass Index (BMI) of an obese person decline from 40 to 39.98.

The decline is virtually non-existent because, as Statistics Canada found in 2004, soft drinks represent only 2.5 per cent of caloric intake for the average Canadian.

Denmark’s government – which implemented an extensive food tax in 2011 – found it has failed to prove any positive health benefits and has only served to damage its economy. The country has seen no change in the consumption habits of its citizens. Rather, the tax has caused an estimated 2,400 job losses in food manufacturing and has seen Danish businesses hurt by consumers simply doing their shopping in neighboring countries.

Even if a food tax were effective in reducing obesity, it would be a blunt instrument that would catch unintended victims. The woman who enjoys a high-calorie sports drink after a 10 km run is still taxed as if she were a couch potato. 

Food taxes don’t work. Even steep food taxes are found to have a negligible impact. They disproportionally penalize the poor. Most importantly, they limit the choice of free citizens to decide what is best for themselves.

The coalition calling for the introduction of a food tax have the best of intentions – to improve the health of Albertans – but those intentions are not matched by a plan of action that would see them realized  all while ripping away personal choice. 


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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