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Why Junk Foods Should Be Taxed

Congress has several reasons for applying taxes to consumed goods at the national level, and state legislatures, using similar arguments, impose taxes on their citizens as well. In the case of junk food, taxation is appropriate at both levels.

First, these three reasons for imposing taxes account for most of the taxes you pay:

1. The tax provides income for the government (federal or state).

2. The tax pays for a service or a use related to the taxed item.
3. The tax is designed as a deterrent by increasing the price of of an item.

Here are some examples of taxes in each of these categories. Many taxes serve more than one purpose!

Taxes on cigarettes provide a reliable source of income for governments: because of the addictive nature of smoking tobacco, the smoker will tolerate paying more because doing without is not an option. A secondary reason for taxing cigarettes is to pay for the societal costs for the subset of the society who choose' to smoke. (At issue is the matter of who caused the addiction and whether smoking is truly a choice.) Taxes on alcoholic beverages are quite similar.

Taxes on gasoline are somewhat different: both states and the federal government have imposed their separate taxes on gasoline consumption explicitly to pay for highway construction and repair. Another reason has arisen more recently: to offset the damages due to pollution and other environmental effects. For example, California has exceptionally high gas prices because of their high level of environmental awareness (and its politicization there) and the resulting perceived need to address environmental costs due to driving and therefore the consumption of gas.

Taxes as deterrents are not common, despite what consumers typically think. Rather, they are primarily money-makers for governments. Whether anyone drives or smokes or drinks less because of the taxes on gas, cigarettes, and alcohol is debatable. Nonetheless, when consumers hear that junk food could be taxed, they assume it is done as a deterrent.

To summarize the reasons for imposing taxes, they are a source of income for governments, they help offset societal costs of the use of the product they are imposed on, they can pay for construction of related infrastructure, and they can serve as disincentives.

Taxes on junk foods have similar rationales. In the debate on whether to tax junk food, several questions should be addressed:

1. In the category of taxation I will call 'a good way to raise money',

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