Wednesday, July 27, 2011

Is a Junk Food Tax a Good Idea?


A recent New York Times Editorial arguing that the government should tax junk food to subsidise health food like fruits and vegetables has been generating significant interest in both health and political circles recently. The author of the editorial, Mark Bittman, suggests that a "junk food tax" could both decrease junk food consumption and increase the consumption of health foods, which in turn would save "billion" in health care cost over a lifetime because people would be more likely to chose a less expensive healthy alternative. Of course, by imposing a tax on these items, Bittman is suggesting the federal government as the agency to impose, police, and enforce the policy, and also indicates that somehow the food industry is to blame for the current state of health in America. Says Bittman,

"Yet the food industry appears incapable of marketing healthier foods. And whether its leaders are confused or just stalling doesn’t matter, because the fixes are not really their problem. Their mission is not public health but profit, so they’ll continue to sell the health-damaging food that’s most profitable, until the market or another force skews things otherwise. That “other force” should be the federal government, fulfilling its role as an agent of the public good and establishing a bold national fix."


The author goes on to make other points about the virtues of taxing unhealthy foods in order to help Americans afford the healthy, and quite frankly he makes a good argument. Chronic diseases such as cancer, heart disease, diabetes, and Alzheimer's are primarily caused by lifestyle choices such as a poor diet and sedentary lifestyle, and these disease have not only reached epidemic levels in our society but also cost us millions is health care dollars each year. If we as a culture would consume less calories and make the calories we did consume healthier, health care costs would go down. However, when a 12 pack of Coke or a bag of chips cost less than a dozen apples or a bag of carrots it's easier for the consumer to chose the Coke and chips as a snack over the fruit and veggies.

Of course, there are some holes in the author's argument too. The first question is, will the consumer make a change in their food choices? My guess is no, not without a paradigm shift. People who drink Coke don't do it because it's the cheapest drink available. If Joe Public wanted a cheaper but healthier choice in beverage, he could chose water. Water is free. He drinks it because he finds some value in Coke. There's an inherent worth placed on it, and 'Joe' is willing to pay. Simply raising the price of one item and lowering the price of another will not change behavior. There has to be a change in perception. If 'Joe' perceives the Coke to be of no valuable (causes cancer or diabetes for example) and the vegetable to be valuable (fights cancer), then and only then, will his choices change.

Second, you have to buy into the idea that government regulation is the answer versus market drive. Honestly, this is where I struggle the most. I consider myself Libertarian, and therefore the idea of government involvement in consumer choice makes me recoil. However, I believe that consumption tax is the only system of fair tax, and therefore favor it as the model of tax reform, In essence, this would be a consumption tax. It wouldn't affect me since I would not purchase junk food. Not only that, but as a health care provider, I see the health care burden placed on our system from these types of foods. This junk food tax would generate billions of dollars to ease that burden.

In the end, I don't trust the government to use these tax dollars effectively, and therefore don't favor such a tax. The only way to change junk food consumption is to change the public perception of what junk food is and what it does for you. We already have a model in cigarettes and the documented decrease in smokers across the US in recent decades. Did the cigarette tax and government propaganda (you've seen the ads) decrease the number? Although some argue yes, I tell you the answer is no. The decrease happened when public perception of smoking changed from cool and sexy to ignorant and filthy. Until we see the same paradigm shift with junk food, we'll keep seeing the same problems of overweight diseased people. When we look at a can of soda (diet or regular) or super value meal at the fast food chain and think obesity and death instead of tasty and convenient, then, and only then will we see a change.