Federal tax on junk food is feasible, study finds

Federal tax on junk food is feasible, study finds By: Doug Bennett


Your potato chips, Cheetos and Mountain Dew might someday come with something extra — a federal junk food tax.

Slapping a federal excise tax on foods that meet certain nutritional or category criteria is both legal and feasible, researchers at two universities have found. An excise tax is a targeted levy on certain goods and paid by the manufacturer.

Some communities impose local taxes on sweetened soft drinks but a national tax on that and junk foods would be unique. Researchers at Tufts and New York Universities found that targeting junk foods with an excise tax would first require lawmakers to classify foods a certain way — perhaps by product category such as soda or candy, by general nutritional criteria or according to certain ingredients.

Another option is a progressive excise tax, which would mean escalating the tax as the nutritional quality of foods decrease.

Revenue from the tax could be allocated to a specific purpose, such as funding obesity prevention or Type 2 diabetes care, the researchers said. It also gives junk food manufacturers the flexibility to decide how much of the tax gets passed on to consumers.

Having a nutrition-specific excise tax also gives junk-food makers an incentive to reformulate their products: Fewer bad ingredients could mean a lower tax rate.

Federal tax laws are amenable to a junk food tax and scientific literature supports defining junk food through product-specific categories, researchers said. That means a favorable environment for a federal junk-food tax.

Decades ago, a potato chip maker threw down a challenge: Bet you can’t eat just one. Now, if you can’t, it could end up costing a little more.

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