Why a Candy Tax Is No Longer Unthinkable in Massachusetts

Photo by Jill Robidoux on Flickr

There was a time in Massachusetts when the governor would have been far less likely to propose a tax on candy, as Gov. Deval Patrick did this week. Patrick wants, as part of a broader tax plan, to eliminate the sales tax exemption on the stuff, and perhaps the best example of why he has a better chance of getting his way now than he would have several decades ago is the old NECCO factory in Cambridge, once the largest candy factory in the world, now an office for the Novartis Institutes for Biomedical Research.

“When our economy revolved around manufacturing, including a huge confectionery industry, we didn’t tax the stuff. But now we’re a leading healthcare center, and it’s back on the table,” says cultural historian Yoni Appelbaum, a doctoral candidate at Brandeis. Massachusetts, he calculates, once made one-quarter of the nation’s candy (going by value of manufactured goods), giving the industry far more political sway among our legislators. Now, we make just 1.5 percent.

Candy and soda, as well other foods, are currently exempted from a sales tax. With the growing concern over America’s obesity problem, more politicians are wondering why we give non-nutritious food a break. They wondered that less back when Cambridge was the nation’s hub for candy manufacturers. Read this passage from Samuel Atkins Elliot’s History of Cambridge, published in 1914, and you’ll understand the place candy held in the hearts of Cantibridgians:

Cambridge has confectionery factories enough to supply the demands of many thousands. Candies by the ton; candies of all grades and all quantities; candies for old and for young; fashionable, stylish, high-riced candies, in fancy boxes—sweet things in every conceivable form are made in Cambridge, and sold everywhere … There was a time when candy was counted a luxury, but today, it is believed to be a necessary of life, and Cambridge is supplying a large share of the demand for it.

A necessary of life!

Applying a sales tax to candy became popular in the 1940s in other states, a trend the National Confectioner’s Association lobbied heavily against. Their arguments sound more dubious today. When D.C. considered a tax, Phillip Gott, the president of the NCA, testified:

The fact that candy is a wholesome, low cost food has been proven both by decisions handed down by the Supreme Court and the fact that candy was accepted by the armed forces as an integral part of combat rations. Why should candy, produced by our industry – manufactured entirely from other foods that are tax free, be exempted from the classification of food and the forced to unjustly carry a discriminatory tax burden?

These arguments found more sympathy among Massachusetts legislators, who feared biting the hands that fed them (their dessert, anyway). Here’s a report from Billboard Magazine in 1952:

[Walter Guild, managing direct of the New England Manufacturing Confectioners’ Association] warned legislators in Massachusetts not to consider a discriminatory sales tax on candy when looking for additional revenue to balance the next state budget. “Candy is one of the leading manufactured products in this area. A discriminatory tax on candy would cause great hardships on the 10,000 employees in Massachusetts,” he said.

Even into the late 1980s, with the industry here already in decline, confectioners found a sympathetic ear in Tip O’Neill, Speaker of the House and the Congressman from Cambridge. O’Neill was influential in getting Washington D.C. to repeal its sales tax on candy. An Associated Press report from 1981 pointed out the thin line O’Neill was walking:

President Reagan may not know it, but House Speaker Thomas P. O’Neill looms the victor on one sweet tax cut.

As the capital’s ranking Democrat, O’Neill finds the president’s tax package too much to swallow. But as a Massachusetts congressman whose district is chock full of confectionaries, he’s all for boosting the consumer’s purchasing power for Mary Janes and Sugar Daddies.

So at the request of the National Confectioners Association, O’Neill is quietly lending his clout to an effort to repeal the District of Columbia’s 8 percent sales tax on candy.

O’Neill got what he wanted, too. D.C. repealed the tax the next year.

Fast forward to today, and Patrick’s plan to make Massachusetts the 40th state to remove the sales tax exemption for candy doesn’t seem as unlikely. These days, companies like NECCO are still based here, but we’re not the candy town we once were. We are, however, a center for healthcare and research. A National Confectioners Association representative says they’ll be taking a look at Patrick’s specific proposal to determine it’s impact. The group still opposes sales taxes on candy in general, but the arguments are more tailored to our times—they don’t use words like “wholesome,” anyway. “The truth is, candy represents less than 2% of the average daily calories Americans consume,” NCA’s Susan Smith writes in an e-mail. “Does MA really want to tax products like the conversation hearts produced by NECCO?  Oh u kid, we say to the governor!”

The fact is, Patrick probably does want to tax the candy hearts. Times have change since our state boasted a Speaker of the House, easily petitioned by the industry to advocate eliminating candy taxes around the country. With the NECCO factory now better known as Novartis, the arguments on either side of a candy tax debate in Massachusetts seem pretty much the same as they would be anywhere else.