How Excise Taxes Can Reduce Obesity

Ashley Ifeadike

Last year, New York City Mayor Michael Bloomberg, attempted to pass legislation prohibiting the sale of soda over 16 ounces in restaurants, movie theaters, and sports arenas. What has since been twice overruled and deemed reflective of an emerging “nanny state” that is “un-American” and “paternalistic,” the “New York City Soda Ban” brought much needed attention to one of the biggest killers in the United States: obesity. However, in the midst of the opening of healthcare exchanges and their subsequent glitches, attention in health has shifted. As a result, obesity concerns have diminished in the political sphere. Although obesity has faded from the media spotlight, obesity rates continue to rise. We must turn our attention back to this silent killer, but rather than targeting it through a single product ban, we should approach obesity the same way we have approached smoking: through excise taxes. By increasing the prices of unhealthy foods, excise taxes have the potential to significantly reduce the purchase and consumption of the foods contributing to obesity.

Since the 1980s, body weight has been rising across the country. Although the average weight had been increasing throughout the twentieth century, the gains made in the 1980s represented a decline in health rather than a rise.¹ The average weight of Americans today far exceeds the medical recommendations for health and longevity. Americans have ballooned to an average of 195.5 pounds for men and 166.2 pounds for women,¹ from an average of 168 and 143 in the 1960s.² Today, approximately seventy percent of adults in the United States are considered overweight or obese.³ This trend is consistent in youths, 18 percent of children and adolescents are obese.⁴

The rising rates of obesity have seriously impacted our nation’s health. In 2010, the leading causes of death in the United States were heart disease and cancer.⁵ Another top killer was diabetes. Behind these clinical causes of death, there are the actual causes of death, or factors leading to disease individuals can control.⁶ In the United States, the actual causes of death in 2000 were tobacco as well as poor diet and inactivity, contributing 18 and 16 percent of all deaths respectively.⁶ More recently, high blood pressure, physical inactivity, and other metabolic risk factors for chronic diseases were recognized as the leading causes of preventable death in the United States. Apart from smoking, obesity is the underlying factor behind all of the major causes of preventable death.

However, enacting an excise tax can significantly reduce the rate of obesity in our country. When the effects on smoking on health became known, additional excise taxes were levied on cigarettes and tobacco products.⁷ Tobacco excise taxes primarily have their greatest impacts in youths, as the higher prices discourage them from beginning to smoke.⁸ Likewise, excise taxes can also be effective in controlling the population at risk for or who are overweight and obese. One of the principal contributors to the increase of obesity is the decreasing cost of sodas and junk foods, and the rising costs of healthy foods.⁹ Similar to the way consumers are responsive to price of cigarettes and other goods, they will be responsive to price increase in unhealthy snacks and drinks. The excise tax will encourage consumers to carefully consider their choices—especially if these foods now compare to prices of healthier alternatives, which are currently priced higher. However, excise taxes can only be successful they are enacted in conjunction with other public health initiatives (healthy food subsidies, allowing food stamps at farmer’s markets, etc.), so they don’t disadvantage the poor. If excise taxes are applied across the board to foods with high calories and low nutritional value or deemed harmful to health, there is potential to reducing their consumption, thus reducing the rates of obesity in our country.

New policies, especially new taxes, are never without opposition. However, amidst the controversy and political backlash behind Mayor Bloomberg’s portion cap proposal, there was support from the public health community and even critiques believing that the law was not comprehensive enough.¹⁰ This strategy, likely fragmented in its attempts to appease those in food industry, was ultimately perceived as “arbitrary and capricious.”¹⁰ However, excise taxes avoid this dilemma because it is a policy that preserves consumers’ freedom of choice. Though taxes carry their stigma, this policy pervades the “un-American” aspects of the portion cap because it does not limit consumers’ choices or prohibit any products. Rather an excise tax forces consumers to be mindful of their choices. By enacting an excise tax on high calorie, low nutritional value foods, we can achieve the same goals of lowering obesity that the soda ban aimed to.

With the rising rates of obesity across the country, and the rising costs of medical care, it is time for public health policy targeting obesity. Excise taxes have the potential to reduce consumption of the unhealthy foods and drinks that have led to our current obesity epidemic. Americans’ expanding waistlines and the increasing number of people suffering from heart disease and diabetes are begging for more effective public health policy targeting obesity, let’s give them one.

References

1. David Cutler, Edward Glaeser, and Jesse Shapiro, “Why Have Americans Become More Obese?” Journal of Economic Perspectives, 2003, 17(3), 93.
2. Cutler, “Why Have Americans Become More Obese,” 93.
3. National Center for Health Statistics. Health, United States, 2012: With Special Feature on Emergency Care. Hyattsville, MD. 2013.
4. Odgen et al. Prevalence of Obesity in the United States, 2009–2010 . NCHS data brief, no 82. Hyattsville, MD: National Center for Health Statistics. 2012
5. Murphy et al. Deaths: Final data for 2010. National vital statistics reports; vol 61 no 4. Hyattsville, MD: National Center for Health Statistics. 2013.
6. Ali H. Mokdad, James S. Marks, Donna F. Stroup, and Julie L. Gerberding, “Actual Causes of Death in the United States, 2000,” JAMA, 2004, 291(1), 1238-1245.
7. Frank J. Chaloupka, “How Effective are Taxes in Reducing Tobacco Consumption?,” Studies in Risk and Uncertainty Volume 13 (1999) pp 205-218.
8. Congressional Budget Office, Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget, June 2012
9. Aaron Sankin, “New California Soda-Tax Bill Under Consideration,” Huffington Post: April 26, 2013.
10. Michael M. Grynbaum, “Judge Blocks New York City’s Limits on Big Sugary Drinks,” NYT