Nutrient-based tax could cut nation's medical bills

by H. Roger Segelken
Nutrient-based tax could cut nation's medical bills

(Medical Xpress)—To reduce obesity-related disease in America, many policymakers and public health officials have proposed either taxing products that make us fat or taxing individual nutrients in fattening foods, like sugar and fat itself.

Researchers at Cornell and Stanford universities modeled both approaches, using data from more than 123 million purchasing decisions by food and beverage shoppers. (Their economic model included a range of , including a third commodity – salt – because of its role in heart disease.) Their results are reported in a January 2014 working paper published by the National Bureau of Economic Research.

"Nutrient-specific taxes could have an important effect in inducing healthier purchasing behavior among consumers," Cornell's Michael Lovenheim and Stanford's Matthew Harding concluded.

Specifically, a nationwide on sugar would have the broadest positive effect, they conclude, because so many processed foods have lots of sugar – and consumption of fat and salt in those sugary products would be collaterally reduced when consumers are faced with a sugar tax. A tax on fat would be almost as effective, researchers said, but might make consumers switch from dairy-based drinks to soda pop. Taxing salt, directly, they said, would have fewer positive effects.

Either of two kinds of excise taxes might discourage unhealthy eating behavior, they proposed. A 20 percent tax on a product category, such as candy, would raise the price of a $2 candy bar to $2.40 (plus sales tax, where applicable).

But tax-adverse consumers, desperate for their salt/sugar/fat fix, could easily switch from candy to another snack category not already taxed – or even invented, yet, by the industry – like the hypothetical "SeaSaltCaramelDeep-friedPorkRinds."

Unless, that is, the individual, unhealthy commodities are taxed at the supply side – before they get to the candy factory of the Heart-Stopping Snack Co. That way, researchers said, the price premium on unhealthy products would be unavoidable. They estimated that a 20 percent tax on sugar, for example, would reduce consumption – and calories – by about 18 percent.

"Taxes on nutrients would do much more to support healthier nutritional choices than would taxes on products," said Lovenheim, associate professor of policy analysis and management in Cornell's College of Human Ecology.

"Our model predicts that people would reduce purchases – and calories, too – with a tax on unhealthy nutrients," Lovenheim added, displaying a revealing graph.

That graph, titled "Share of Food and Drink Products in the Average Household Grocery Budget," leads with "snacks and candy," at 15.8 percent of the grocery bill – compared with 10.7 percent for "fruits and vegetables" and 5.3 percent for "cereal and breakfast."

Unhealthy-nutrient taxes would be even more effective if they were applied on a nationwide basis, Lovenheim thinks, to keep people from crossing state lines (or going online) to get tax-free unhealthy goods.

"In a way, we're already paying a 'fat tax' for eating and failing to exercise," the Cornell economist observed. "Obesity-related disease costs American taxpayers and health care consumers more than $147 billion a year."

More information: "The Effect of Prices on Nutrition: Comparing the Impact of Product- and Nutrient-Specific Taxes." Matthew Harding, Michael Lovenheim. NBER Working Paper No. 19781, Issued in January 2014. www.nber.org/papers/w19781

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billpress11
not rated yet Jan 17, 2014
An excellent idea! Sugar is probably increasing medical expenditures more than cigarettes in the US today. Taxes on sugars should effectively double its cost. The revenue could be used to pay for and improve the the Affordable Care Act.
billpress11
not rated yet Jan 17, 2014
Sorry, double post deleted.
leumasmc
not rated yet Jan 17, 2014
Or, we could finally get rid of the subsidies that are reducing the cost of sugar. This seems like a smarter idea than opening the Pandora's Box of nutritional consumption taxes.
billpress11
not rated yet Jan 17, 2014
Or, we could finally get rid of the subsidies that are reducing the cost of sugar. This seems like a smarter idea than opening the Pandora's Box of nutritional consumption taxes.

I would go along with that but it is my understanding that most of the subsidy is in the form of quotas limiting the imports of lower world priced sugars. Dropping the import quotas would actually lower the price of sugars in the US.
Returners
not rated yet Jan 17, 2014
It doesn't make sense to tax sugar directly, because the sugar cane industry is "Green," usually producing all of their own power and selling some electricity back to the grid. Therefore, taxing sugar directly would actually punish the renewable energy sector. It also punishes people who buy sugar, but eat less total sweets. Why should a healthy family who makes some muffins or cookies once in a while be punished because of the 400lbs fatty on television?

Also, if you tax "fat" then it becomes arbitrary for things like fresh meats, because there's no way of knowing exactly how much fat is in a particular cut of meat, since it varies literally from animal to animal, and cut to cut.

The could start by banning hydrogenated oil though.

Maybe make an FDA limit of like 25g of sugar per 12ounces on sodas. If excess sugar is the problem, then simply ban "excess" sugar from convenient items like the sodas and sports drinks, and lower the amount of sugar to 25g per can of soda.
Returners
not rated yet Jan 17, 2014
One method punishes everybody, good or bad, the other method helps everybody by removing the tempting, too sweet product from the market, and replacing it with something that is sweet enough to be a good treat, but not so much to be unhealthy.

You can also punish sodas by simply taxing 8oz, 12oz, and 20oz soda bottles, not the sugar itself. This makes sense because smaller bottles are less efficient, therefore more wasteful. If you make the unhealthy choice less appealing by making it inconvenient, while simultaneously taxing a pollutant, then you can stop some of the convenience of negative behaviors (drinking sodas at work or on the go, etc,) then you save the environment while only punishing the bad usage of sugars and the bad usage of plastics.

A blanket tax on sugars or fats is just plain stupid and unjust.
Ratfish
not rated yet Jan 17, 2014
I would go along with that but it is my understanding that most of the subsidy is in the form of quotas limiting the imports of lower world priced sugars. Dropping the import quotas would actually lower the price of sugars in the US.


I think most of it is in the uncapped crop insurance subsidies that is about 15 billion a year. Removing all assistance and subsidies to corn farmers will increase the price of HFCS, thus making damn near every processed food more expensive. That money could then defray some of the annual cost of obesity.
jlevyellow
not rated yet Jan 18, 2014
I am absolutely amazed at the acceptance of government control of behavior that I see in the posted comments. It shows a thoughtless mindset that should not present itself in the scientific community with such ease. It does not matter one iota that government control is effective, because its effect can be good and/or bad. It is far safer to limit government activity to education rather than permitting the nudging and ultimately shoving of us about.

As an example, I offer the following link that was listed on tonight's phys.org newsletter:

http://medicalxpr...tml#nwlt

Another example centers on the killing of Syrian doctors who treated rebels against the current government.

Humans can justify any behavior once it is permitted under limited circumstances. Unless you folks are not planning on bringing children into this world, please understand that the Western World can fall victim to the same problems.
alfie_null
not rated yet Jan 19, 2014
It doesn't make sense to tax sugar directly, because the sugar cane industry is "Green," usually producing all of their own power and selling some electricity back to the grid. Therefore, taxing sugar directly would actually punish the renewable energy sector.

By that logic, if I produced crystal meth (another substance that harms its users), it should be OK, so long as I am "green" about it.
It also punishes people . . .

How much dietary sugar comes from home-made muffins vs., say, soft drinks for the average overweight individual?

Your regulatory-focused suggestion would result in a complex, unwieldy tome of regulations, and a bureaucracy to oversee. And encourage industry to become ever more agile in working around the regulations. We have lots of experience in how well that doesn't work.

The intent here is to prevent people from becoming unhealthy. Which will save money for all of us, even if we're already healthy.
alfie_null
not rated yet Jan 19, 2014
I am absolutely amazed at the acceptance of government control of behavior that I see in the posted comments. It shows a thoughtless mindset that should not present itself in the scientific community with such ease. It does not matter one iota that government control is effective, because its effect can be good and/or bad. It is far safer to limit government activity to education rather than permitting the nudging and ultimately shoving of us about.

How effective is education? As a counter-example, I offer the rise and fall of cigarette smoking in the U.S. The warning labels, the TV ads - not particularly effective. The tax - effective.

I get the impression you'd rather the government do nothing. Perhaps if it were required your health insurer break out the amount of your premium that goes to food abuse inspired problems (diabetes, arteriosclerosis, etc.) you'd feel differently.
jlevyellow
not rated yet Jan 19, 2014
"How effective is education? As a counter-example, I offer the rise and fall of cigarette smoking in the U.S. The warning labels, the TV ads - not particularly effective. The tax - effective."

Yes, taxing something is a far more effective an approach than education. The problem is that punishment of any behavior is effective. Why would anyone wish to have the government engage in punishing its citizens. We have essentially outlawed the punishment of our children. We are in the process of decriminalizing the use of Marijuana. We have, by law and policy, reduced the value of education to our children. We have made gay behavior as acceptable as straight behavior. We are beginning to reduce freedom of speech to "acceptable" levels so that some groups get a free pass on behavior and attitudes that just yesterday were unacceptable.

Whether you agree with the changes or not, we have placed our lives in the hands of other ordinary people who see the future no better than you or I.
jlevyellow
not rated yet Jan 19, 2014
"Perhaps if it were required your health insurer break out the amount of your premium that goes to food abuse inspired problems (diabetes, arteriosclerosis, etc.) you'd feel differently."

If the healthcare premium were determined between the individual and the insurance company, then the government could act as an ombudsman. If the government is the first decider of policy, there is no room for flexibility. As you know, diet is not the only factor in the development of diabetes or heart disease. Perhaps alcohol should be banned by the government. Oh, wait, we did that and it changed nothing. The adrenaline rush of avoiding punishment became another reason to drink. Setting rewards against punishments is an unexplored area of human psychology, mainly because it deals with taboo subjects.
billpress11
not rated yet Jan 19, 2014
Jlevy, I would like to know what your proposals would be? Cigarettes and alcohol are taxed, an rightly so, because they do cost society a lot of money in lost worker productivity and medical expenses. So why shouldn't sugar be taxed? It adds a major cost to the health system and worker productivity in this country also.

Taxing cigarettes, alcohol and hopefully in the future sugar are NOT forms of punishment. It is the simplest method of making them carry their own weight.

As far as I am concerned the cost of cigarettes, alcohol AND sugar should be about 50% taxes! You can add the funny weed to that list also if you want.
snowflake0446
not rated yet Jan 19, 2014
From what I read above, most of you are in favor of taxing these "bad" products. But, these taxes (money) go into a Government that is already so inefficient and won't dedicate the taxes received for these "sins" to their remedy. How much of the cigarette tax went to the hospitals who treat people with cancer? How much of the alcohol taxes went to a Alcoholics Anonymous or MADD? Also, as a pre-diabetic, potatoes and white rice are just as bad as sugar. Are you planning on taxing those? What about the high starch in beets or carrots? Also as some of you pointed out, there are other bad substances not considered.

Sorry, but I can't get behind a taxation without oversight and insurance that the taxes get to what they were taxed for. Social taxation for change never really stops people. It may slow them down, but not stop them.
billpress11
not rated yet Jan 19, 2014
Snowflake, I agree with much of what you said. I don't think taxes of unhealthy products should be used to raise revenue other purposes either. But I do not think potatoes and white rice are nearly as bad as sugar for two reasons. Some of the carbohydrates in those foods past through one unused, with sugar much if not most enter the blood stream. Secondly, sugars are added to many other foods just because it taste good. Potatoes, beets, carrots and rice have some nutritional value, sugar does not. One does not need sugar, the human body is quite capable of making all the sugar it needs when it needs some out of carbohydrates and body fat.

The main purpose of taxing cigarettes, alcohol etc. would not be to eliminate their use, it would be just to pay for the negative side effects. Many people enjoy them and should continue to have that right. I enjoy some of them.

Today most Americans consume as much sugar in one day as the humans of 10,000 years ago consumed in 1 year.
freethinking
not rated yet Jan 19, 2014
If government was serious about the obesity epidemic, they should establish a ration card system. Every man would be given 2400 calorie ration card, and women 2200 calories. The calorie would have so many mandatory servings of fruit, vegetables, carbs, protein. This system would eliminate obesity, reduce the carbon footprint of people as you only get so many calories per day, improve health as everyone would get necessary scientifically proven mix of food. Government mandated ration cards, like Government mandated health care, Government allowed speech, or Government mandated anything is great. The only exceptions to the ration cards would be the those determined by the government as special or elite. Government is not a problem, it is the solution to all of mankind problems.

freethinking
not rated yet Jan 19, 2014
Problem with making "Jonathan Swift - Modest Proposals" these days is that Progressives think they are meant to be taken seriously and will try to implement them.

Read the original Modest Proposal
http://art-bin.co...est.html

jlevyellow
not rated yet Jan 20, 2014
Jlevy, I would like to know what your proposals would be?


Pay for people's stupid behavior or don't pay for stupid people's behavior. The problem is that all people are stupid much of the time, whether that means driving over the speed limit or skiing down an advanced course, or getting married, or not getting married. There is no behavior that cannot be classified as stupid. Sugar, fat and salt are fine for some people and not for others. What do you do for people who are stupid enough to grow old in Holland or to a lesser extent in Britain where old people need to keep a low profile medically or risk being "offed." Let me tell you something you probably know already. Poorer people drink soda to feel full at a skimpy meal - combination of the carbonation and the sugar.

In summary, either pay for stupid behavior and shut up or don't pay for it at all for anyone ever. Once you leave a sliding scale, the rich will do better anyway. Educate! That's all you can do.
Returners
not rated yet Jan 21, 2014
I get the impression you'd rather the government do nothing. Perhaps if it were required your health insurer break out the amount of your premium that goes to food abuse inspired problems (diabetes, arteriosclerosis, etc.) you'd feel differently.


Problem is "risk factors" don't guarantee illness, nor does the lack of "risk factors" guarantee non-illness. You can be a thin, "fit" person, and still have "fatty liver disease" or diabetes.

Bumping one groups premiums and not the other would be discrimination, because the condition being test doesn't have a clear cause-effect relationship.

Do you have diabetes because you ate too much? Or do you have an illness which causes you to crave food, which causes you to be over-eating? Cushings is proof this can and does happen.

It's also interesting to me that both obesity and diabetes have been on the rise sharply since the implementation of GMO foods. Perhaps those biotoxin genes are working us all over.
maureen_aba
not rated yet Jan 22, 2014
Actually, numerous studies show that so-called "sin-taxes" won't work when it comes to improving health or reducing obesity. In fact, research published in The American Journal of Agricultural Economics found that the reduced calorie intake from soft drinks would cause an increase in calories consumed from other foods particularly those containing high sodium and fat: http://ajae.oxfor...ls.org/.

What is a more productive approach that would deliver measurable and meaningful results over the long-term? We agree with the position of the Academy of Nutrition and Dietetics (AND) on this issue, which advocates incentives rather than restrictions to promote healthy lifestyles. At the end of the day, encouraging a balanced approach to overall calorie intake and physical activity will succeed where sweeping regulatory approaches will fail.

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