Excise Taxes and Food Purchase Choices: Insights from Single Middle-Aged Men in the U.S.

• In Event: Impacts of Taxes, Privatization, and Land Right

Abstract

Excise taxes on tobacco and alcohol generate revenue and promote healthier behaviors but disproportionately burden low-income households, raising equity concerns. While extensive research exists on excise taxes' direct effects, their indirect impacts on essential expenditures, such as food spending, a key indicator for dietary quality and household resilience, remain underexplored. This study investigates how excise tax burdens affect food spending patterns among single middle-aged men in the U.S., a demographic often overlooked yet uniquely vulnerable due to limited social safety net access, heightened economic pressures, and higher-than-average consumption of taxed goods. Specifically, it examines the influence of cigarette and alcohol tax burdens on food-at-home (FAH) and food-away-from-home (FAFH) expenditures across different income levels. Utilizing household-level data from the Current Population Survey Food Security Supplement (2010-2019) and state-level data on excise tax rates and consumption, this research applies a two-way fixed-effects regression model. Interaction terms between tax burdens and national income quintiles help identify heterogeneous impacts. Preliminary results reveal no significant average effects on overall food spending. However, subgroup analyses indicate that near-poor households ($15,000–$29,999) significantly reduce FAH spending in response to higher excise taxes, suggesting increased vulnerability and potential nutritional compromise. Conversely, FAFH expenditures show limited responsiveness to tax variations, aligning more closely with income levels, possibly reflecting constrained flexibility in these households’ budgets. These findings underscore the unintended regressive effects of excise taxes, particularly affecting economically vulnerable groups. Addressing this challenge demands resilient policy solutions that integrate fiscal policy, social safety nets, and food security initiatives. To promote social equity, policymakers should strategically design targeted interventions, such as income-based subsidies or nutrition assistance expansions, that directly counteract the unintended economic and nutritional inequities exacerbated by regressive taxation policies.

Author

• Yuwei Zhang, Syracuse University
  Presenting Author