Wednesday, July 29, 2015

Using Bans and Taxation to Fight Obesity

Several proposals that aim  to change people's behavior to reduce obesity have been suggested or enacted. These proposals include placing bans or limits on the amount of sugar sweetened beverages (SSBs) a person can purchase, and using taxation to make purchasing SSBs more costly.

In 2012, New York Mayor, Michael Bloomberg, proposed placing a "ban on sweetened drinks in containers larger than 16 ounces at any establishment that receives a grade from the health department." The limit on the size of the beverages was very unpopular. Sixty percent of the respondents to a New York Times survey were opposed to the limit. And in March of 2013, the SSB limit was struck down by Milton A. Tingling,  a State Supreme Court judge in Manhattan, N.Y.

Two other approaches to changing the behavior of persons using SSBs involve taxation. One approach would place a tax on SSBs, making it more costly to consume the beverages. And the other approach would remove the tax deduction companies receive as an ordinary advertising expense.

Making it more expensive to drink SSBs may indeed cause a decline in the use of the beverages. One study suggests that a "tax that raises the cost of SSBs by 20 percent could lead to an average reduction of 38 pounds per year for adults." Further, these types of "taxes would ... generate considerable revenue." Another study indicated that an SSB tax "could substantially reduce BMI and healthcare expenditures and increase healthy life expectancy." It should be noted that in 2014, Berkeley, California passed a measure that puts a one-cent tax on each ounce of sugar-sweetened drinks. Time will tell if this taxation has a positive effect -- on usage, for example.

As part of business tax deductions, companies are allowed to deduct a percentage of the cost of advertising. One study indicated that eliminating advertising deduction for foods that have little nutritional value could lower childhood obesity. And eliminating these deductions could also be a way for government to save money.

No doubt, more policy makers who want to address obesity will propose SSB taxation and SSB related bans. As demonstrated in New York and other places, proposals that place limits on people's choices face opposition. But it may be in all our best interests if we implement reasonable measures, including some  limits, that make us all think more about what we eat and drink.


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