Instead of responsible fiscal policy, they give us snack taxes

November 07, 2007|By THOMAS F. SCHALLER

Let's start with a confectionary confession: I like snacks.

Friends have accused me of single-handedly - sometimes double-handedly - supporting the Little Debbie snack cakes empire. My family knows I hold a special place in my belly and heart for those creme-centered, round Goetze's caramels that my grandfather stowed in the little compartment between the car seats. I also have a weakness for Doritos.

So imagine my visceral unease, figuratively and literally, to news that Maryland legislators are yet again considering a tax on snack foods. Some proposal or another to reinstate the snack tax (it was eliminated in 1996) has reared its head at several other points this decade.

I'm hardly averse to higher taxes and rarely find myself in perfect agreement with powerful trade associations such as the Grocery Manufacturers of America and the Snack Food Association. But no state government - certainly not Maryland's, with its huge base of taxable incomes - should fix its structural-deficit problem by imposing highly regressive taxes on food. And yes, that even applies to fattening, high-calorie junk foods.

I understand the motives of legislators such as Howard County Del. Shane Pendergrass, sponsor of the proposal. Like "sin taxes" on liquor and cigarettes, taxes on junk food might have a small salutary effect on people's dietary choices in a country where obesity is epidemic. According to Trust for America's Health, last year, obesity rates increased in 31 states, including Maryland, while decreasing in none.

But forget health effects or the tax's regressivity. Proposals such as the snack tax and a tax on health club memberships (how's that for mixed signals?) reveal something more unsightly than burgeoning love handles: the deranged mentality that pervades modern fiscal politics, state and national.

Because voters want neither to reduce spending nor to pay higher income taxes, modern legislators from both major parties are conditioned to invent new, sneaky ways to raise revenues. Roy Meyers, my University of Maryland, Baltimore County colleague and budget expert, says budget junkies call this the "cats and dogs" approach.

Maryland is a perfect case study. In order to boast during his 2006 re-election bid that he had not raised income taxes, Gov. Robert L. Ehrlich Jr. instead raised property taxes and the car tax and instituted a "flush tax." Yet his election-year budget grew 11 percent over the previous year, bequeathing to his successor a larger structural deficit.

For his part, new Gov. Martin O'Malley plans to raise income tax rates slightly on those in the top brackets, but also tries to avoid the "tax-and-spend liberal" label by backing slot machines at racetracks and other measures.

Mr. Meyers says that Maryland has a slightly progressive income tax, when county rates are included - though overall less progressive than other states - and he cautions that depending too heavily on income taxes risks greater revenue volatility as the economy (and thus incomes) fluctuates. But he also says that if sales taxes are going to be used to safeguard against recessionary income tax declines, we may as well tax sales and services across the board, rather than creating lists of political winners and losers determined more by interest-group clout than the goal of fiscal solvency.

Frankly, I blame anti-tax conservatives such as Grover Norquist for all this fiscal legerdemain. As a result of their ability to drill into the heads of blind-faith Republicans and hearts of nail-biting Democrats the idea that tax increases are politically fatal, the parties engage in a duopolistic dance of budgetary malfeasance.

Consequently, rather than doing either of the two politically responsible things - raising taxes or identifying, by name, major programs to cut - we get budgetary death by a thousand small cuts, coupled with niggling taxes here and there, many of which hit working-class folks disproportionately.

America is the richest country on Earth and rates near the top in per capita income. Maryland is perennially one of the wealthiest states in the union. Among counties with populations of 250,000 or more, Montgomery County's 2004 median household income ranked fourth-highest nationally. Ms. Pendergrass' Howard County was a few hundred dollars behind, in fifth place.

Must we really tax chocolate-covered pretzels and aerobics classes to pay our bills? Geez, let's hope not.

Oh, and by the way - no, you can't have any of my caramels.

Thomas F. Schaller teaches political science at UMBC. His column appears on alternate Wednesdays in The Sun. His e-mail is

Thomas Sowell's column will return next week.

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