Active Living Newsletter

The Center for Disease Control defines people who are overweight or obese as being in a range of weight that is greater than what is considered healthy for a given height, using the body mass index or “BMI”. An overweight adult has a BMI between 25 and 29.9 kilograms per meter squared of height and an obese adult has a BMI over 30. According to the Center for Disease Control (CDC), obesity rates in the US have risen from 18.3% in 1998 to 25% in 2006. Even worse, 33% of American children are overweight or obese. The CDC reports that the cost of providing treatment for the 1 in 4 Americans who are obese has increased spending on healthcare by $40 billion a year. Obese people also spent 42% more on medical costs in one year than the non-obese. Frightening data show that medical costs related to obesity are about 9.1% of total medical costs in the US. These excess medical costs have caused a large financial deficit in many states - and the costs are often partially paid for by taxes from other non-obese Americans. What is the answer to this obesity epidemic? Could a tax on certain foods or drinks reduce the prevalence of obesity and remedy the debt within the health care system?

Revealing the concept of the obesity tax

In December of 2008, New York Governor David Paterson stated that imposing an “obesity tax” could help close the gap in New York’s $15 billion deficient. He proposed an 18% tax on non-diet sodas and juices containing less than 70% natural fruit juice. A similar tax was also proposed for inclusion in national health care reform bill. This provision would put a 3 cent tax on sodas and other sugary drinks such as energy and sports drinks. The main goal of this tax was to help cover medical care costs of the obese population. The tax was projected to raise about $404 million in the first fiscal year and at least $1 billion over a two year period. During the Center for Disease Control and Prevention’s 2009 “Weight of the Nation” conference, research showed that if a soda tax were imposed, a significant amount of money would be raised to pay for greatly needed health care reforms and to even help reduce the cost of critically needed healthier foods.

The second goal of an “obesity tax” was to decrease the prevalence of obesity itself. The soda tax hoped to do that by decreasing the consumption of soda by at least 5%. Research showed that a tax on unhealthy foods and drinks would reduce the voluntary consumption of these obesity-inducing foods. The “obesity tax” has high potential to reduce soda consumption, especially in children. In response to lowering obesity, potential medical costs associated with obesity would begin to decline and possibly ease some of the burden on tax payers.

While many are in support of some kind of “obesity tax”, there are an equal number that strongly oppose it. There is the belief that people will buy soda no matter how much it costs or that it is unfair to tax a single item. The loudest voice in the argument was from the American Beverage Association, the trade group representing the soft drink industry, vowing to lobby against the proposal on the grounds that the tax would not be effective and would be unfair. Kevin Keane, the spokesperson for the American Beverage Association, stated that the company does not believe that a tax on soda would work because in order to reduce obesity, a range of products would need to be targeted- not just soda. The association also accused Gov. Paterson of “unfairly singling soda out as the main culprit of obesity.”

The American Beverage Association claims that a soda tax could have caused an economic crisis within the beverage community. Instead of increasing revenue for the health care industry, the American Beverage Association asserted that the tax would put a burden on poor Americans who enjoy sugary sodas and fruit juices on a regular basis. A soda tax might also force soda and juice companies to lay off employees due to decreased sales.

Where do we stand now?

The soda tax in New York was never passed in the legislature due to a large public outcry. The proposal was then removed from the federal health care reform bill drafts. However, this does not mean that this type of taxation is ineffective in reducing the prevalence of obesity. The obesity epidemic is a very serious problem in the US and all options to eliminate obesity should be seriously considered. If not a soda-only tax, what about a tax on all foods that cannot meet certain nutritional guidelines? The nation needs to come together and decide what financial decisions are best for our collective health.

References:

• Chan, Sewell. “A Tax on Many Soft Drinks Sets Off a Spirited Debate.” The New York Times. 17 December, 2008. www.nytimes.com. 10 December, 2009. Condon, Stephanie. “CDC Chief: Soda Tax Could Combat Obesity.” Political Hotsheet.27 July, 2009. http://www.cbsnews.com/blogs/2009/07/27/politics/ politicalhotsheet/entry5192172.shtml. 10 December, 2009.
• Dubner, Stephen J. “Who’s Ready for a Fat Tax.” The New York Times: Freakonomics. 29 July, 2009. http://freakonomics.blogs.nytimes.com/2009/ 07/29/whos-ready-for-a-fat-tax/. 6 January, 2010.
• Fiore, Marrecca. “Studies Weigh in on Logic Behind ‘Obesity’ Tax.” 17 December, 2008. http://www.foxnews.com/story/0,2933,468245,00.html. 10 December, 2009.
• Healy, Melissa. “Tough love for fat people: Tax their food to pay for healthcare.” 27 July, 2009. http://latimesblogs.latimes.com/booster_shots/2009/07/tough-love-for-fatties-tax-their-food-pay-for-healthcare.html. 6 January, 2010.