August 3, 2009

A taxing situation

Sooooo... you've got this fairly disturbing report showing that obesity-related health care costs run about $147 billion annually.

"These results reveal that obesity continues to impose an economic burden on both public and private payers," writes Dr. Eric Finkelstein, director of the Public Health Economics Program at the North Carolina-based RTI International, which produced the national study.

"The connection between rising obesity rates and rising medical spending is undeniable."

Part of the solution to the obesity problem, it's been argued, is to slap a tax on junk food. Make it more expensive to eat bag after bag of potato chips and drink 24 oz. Mountain Dews, and you produce an easy incentive to alter people's behaviors. On its face, it seems like a no-brainer (h/t Serious Eats):

About one-third of Americans are obese, up from 15% in 1980. Fat people are more prone to heart disease, diabetes, bone disorders and cancer. An obese person’s annual medical costs are more than $700 greater than those of a comparable thin person. The total medical costs of obesity surpass $200 billion a year in America, which is higher than the bill for smoking.

Of course, the folks who make some of these products don't like this idea one darn bit. Perhaps you've seen the ads from Americans Against Food Taxes? You know, the one which argues that, during these tough economic times, those meanies in Congress should not be adding to the cost of "the simple pleasures that we all enjoy, like juice drinks and soda" by slapping a big 'ol fat tax (no pun intended) on them.

[On a side note, does anybody actually believe that "Americans Against Food Taxes" is actually a grassroots organization, and not an astroturf campaign funded by the American Beverage Association?]

As others have pointed out, I think it would be difficult to define just what should and should not be taxed. What about the juice drinks we buy, made by the folks at Honest Tea (which is partially owned by Coke, I know, I know), that are organic, have just a little (real) sugar and only have 40 calories? I would hardly say that qualifies as a fattening food.

But generally I think it's a good idea. The revenue could be used to pay for health care reform and, as has been shown with cigarettes, may actually help ween people off of the stuff. At the same time, it's a regressive tax, because it would hit lower-income people (who are at increased risk for becoming obese) harder, since they often live in neighborhoods that lack grocery stores and decent restaurants and, as a result, buy more food items at convenience stores and fast-food restaurants (which are in abundance in many low-income areas) meaning their diets are replete with the fattening foods that would become more expensive.

To be workable, in my view, taxing junk food has to be coupled with a serious effort to make healthier foods more affordable, by taking away those billions in corn subsidies and using them instead to help more farmers return to growing a diverse array of crops, and to promote a more regionalized food system, so those said farmers can't more easily get their products to willing customers.

In the end, I doubt either will occur. But stranger things have happened.

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