Tuesday, March 9, 2010

weight loss and taxes

I have brought this issue up previously but the news was focusing again on this controversy so I thought it was worthy to bring up again.

New York is getting close to enacting the concept of putting a "sin" tax on sugar based sodas. The concept is that if a person would pay more money for a sugar based soda than other non-caloric beverages, that person may be apt to consume less. A study came out showing this exact fact: when taxes are placed on these sugar based sodas, people do in fact buy less of them.

Has cigarette consumption dropped considerably since excessive taxes were placed on these years ago? The answer is yes.

But where does this stop? Should bagels be taxed higher than wheat bread? Should chocolate bars be taxed higher thah vegetables? Does the government have the right to differentially tax items and make it more difficult to afford the foods we like?

Posner's thoughts: If a people's individual behavior choices resulted in health/financial impacts only on themselves, then there should be no "financial penalty" enacted on that person at all. If they consume more health care because of their eating and/or smoking patterns and they are paying for this "extra" medical care, then their decisions impact on no one else. However, if other people's insurance premiums rise because of this, then in fact, an individual should bear some cost for unhealthy behavior patterns. I do believe that society as a whole "pays" for the co-morbidities of weight/smoking/alcohol problems and "sin" taxes on obvious items of health-destruction are a good idea. Incentivize people to eat and drink healthy. Your thoughts?

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