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    Bad News for C-Stores: Public Backing 'Sin Taxes' to Fund Healthcare

    Study finds broad support for tariffs on alcohol, cigarettes and junk food.

    By Mark Dolliver

    NEW YORK -- Healthcare reform would have ill effects on the sales of soda, alcohol, junk food and cigarettes if lawmakers were to heed the opinions expressed by many respondents to a Kaiser Family Foundation survey released this week.

    According to a report by Convenience Store News' sister brand, Adweek, 39 percent of the survey respondents said they “strongly” favor raising taxes on "items thought to be unhealthy, such as soda, alcohol, junk food and cigarettes," as a way of financing healthcare reform and coverage of people who are uninsured. Another 22 percent said they were "somewhat” in favor of this idea.

    Ten percent were somewhat opposed to funding healthcare through raising what is commonly called "sin taxes," and 27 percent strongly so, with the rest declining to answer.

    Support for such taxes varied when the poll asked about specific product categories. Sixty-eight percent said they'd favor raising taxes on beer and wine to help fund healthcare reform. Sixty-five percent said the same about raising cigarette taxes (which were already raised substantially by the federal government on April 1). Fewer were in favor of higher taxes on "unhealthy snack foods" (52 percent) or "soda and soft drinks" (46 percent). For comparison's sake, just 28 percent said they'd favor "increasing income taxes for all those who pay income taxes" as a way of funding healthcare reform.

    Such taxes would tend to be regressive, given the downmarket skew in the constituency for some of those products. But even when the poll raised that point, it didn't dissuade a majority of those who favored the tax increases. Among those already backing such tax hikes, 64 percent would continue to do so even if they "would hit low-income people the hardest."

    Those opposing the higher "sin taxes" were asked whether they'd reconsider if, in addition to helping finance healthcare reform, the levies "improve health outcomes by encouraging healthier habits." With that factor tossed into the mix, 24 percent of respondents who'd initially opposed such tax increases said they'd be in favor after all.

    The poll—fielded earlier this month—tested respondents' tolerance for different levels of tax increases on soda. Asked whether they'd be willing to pay 15 cents of additional tax on a 12-ounce bottle of soda for the sake of healthcare reform, 30 percent said they would. The figure rose to 33 percent for a 10-cent tax increase and to 39 percent for an additional tax of 3 cents per bottle.

    Alcoholic beverages, cigarettes and carbonated soft drinks alone represented 47.72 percent of in-store sales for the average convenience store last year.

    -- Adweek.com

    Related News:

    -- Cigarette Sales Down After Tax Increases -- April 20, 2009

    -- REGIONAL REPORT: Western U.S. Sees Fuel Blending, Cigarette Tax Hikes and More -- April 20, 2009

    -- Cigarette Tax Increase on Tap for Illinois? -- April 13, 2009

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