Wednesday, November 18, 2009

Feeding America vs. a Food Tax in New Mexico

Just as we hear news that the U.S. Senate has designated today, Thursday,   Nov. 19, as Feed America Day, we also hear about a proposal to reinstate the state food tax in New Mexico.

Is this a case of "good news, bad news?"

Not necessarily.  But there is some sense of irony.

Each of these two pieces of news merits its own reflection. They are linked only because they come at a time when recently released statistics show that hunger and food insecurity are still high in our country.

First, let me recognize and thank our own Sen. Tom Udall for sponsoring a resolution that led to the Senate recognition of Feed America Day.   The resolution has the effect of bringing the issue of hunger in America to the forefront of the Senate agenda at a time when that legislative body is engaged in many other pressing issues.

The resolution also asks everyone in the U.S. (especially those of us who are fairly well off) to take this issue seriously.  In fact, Sen. Udall urges us to skip two meals today and donate the cost of those meals to charities that serve the poor and hungry.   A noble request indeed.

Here's a quote from Sen. Udall.
“As we approach the Thanksgiving festivities, it is my hope that individuals will take the time to think of those in their community who may be struggling to keep food on the table. “To miss a few meals and make a modest donation to a local food pantry is a small thing, but if many of us join together in this effort, we can have a large impact. And a large impact is what we must have if we are to keep our families and food pantries afloat this year.”
Read more in the Democracy for New Mexico blog 

Now, let me get to the other issue, the proposal to reinstate the gross receipts tax on food sales in New Mexico.  This is not a done deal, but according to various reports, this is one of the options on the table to help the state of New Mexico with its revenue shortfalls.  Read more from KOAT.

A task force that is considering several revenue options will make recommendations to Gov. Bill Richardson by Dec. 21

I personally don't think it's a good idea to impose a tax on basic foodstuffs during this time of crisis.

If the state must impose a tax, they should at least exempt all basic items like fresh fruits and vegetables, milk and dairy products, certain meats and proteins, rice, beans, noodles and pastas, breads.  There would only be the "junk food" left to tax.

I know the processed food companies won't like this, but go ahead and tax the heck out of Cheetos,  soda pop and potato chips.  This is not a new suggestion. There was a proposal from the Institute of Medicine and National Research Council a few weeks ago to tax junk food and soft drinks in order to fight obesity. 

A couple of side notes. First,I do want to point out that the progressive community was divided when the elimination of the tax on food was first proposed in New Mexico in 2002.  The arguments were that the loss of revenue would force the government to cut programs that directly assist the poor.  The other argument was that the elimination of the tax would be as beneficial, if not more beneficial, to the middle class and wealthy food shoppers who did not need the tax cut in the first place.

Secondly, we recently experienced a "food tax" effect of sorts.  Remember when prices at the gas pump were $4 a gallon?   It wasn't that long ago. This was increasing the cost of transporting, processing and warehousing food around the country, which translated to a higher price for food at the supermarket counter. (Buying local is a solution, but that's a subject for another blog post).  Anyway, this "food tax" was not going to fund government operations.  Rather, it was going to the large multinational oil companies, who were reporting record profits as a result of the increased revenues.  

I'm sure we'll be hearing more debate about the proposed food tax in coming days and weeks, and it certainly will be a topic that we';ll continue to cover in this blog.

No comments: