As governments scramble to find new sources of revenue, a growing number of cities and states are turning to a contentious solution: food-related taxes. From sugary drink levies to restaurant surcharges, these taxes promise to bring in much-needed funds, but experts warn that they may ultimately backfire. Restaurants and small businesses are already feeling the pinch, with higher costs passed on to customers in the form of higher prices. But will these taxes actually deliver the revenue they promise, or will they drive diners to seek out untaxed alternatives, ultimately depriving governments of the very funds they seek?
Food-related taxes are rising in popularity, though they hurt restaurants and customers—and may even fail as a revenue-raising tool.
