Cash starved governments can get help & protect our health, part 2....

Today's Post: Friday, 2-26-2010

(Part 1 on cigarette and tobacco taxes was posted on Friday, 2-12, two weeks ago today.)

The analysis I include next is true I think. I include it next in case you missed it two weeks ago.

The really good, current news is next just after the analysis. Because this new research was done, it is increasingly likely these kinds of taxes will be enacted now.

1. From the United States government to local cities most governments today are now extremely pressed for cash and revenues.

Yes. Governments can cut service levels and programs; and they have been.

But cutting back on things like libraries, parks, education, programs for pregnant women and babies and preschool children, and public health and public safety cause real harm now and later and definitely would be best avoided. Cutting back some kinds of health programs can even directly kill people and does. Cutting back on supporting mass transit not only harms people who have less money and harms the economy, it tends to increase driving and air pollution.

Governments can also increase the dickens out every possible kind of fee and they have been. Permits cost more as do traffic tickets – increasingly a LOT more – than they used to cost.

But whether young or old or less educated or less fortunate many people find these higher fees a problem because they are already themselves short of money.

Governments could raise their sales taxes by a lot and some may do so. But even though sales taxes are the easiest to be sure you can collect and tend to be fair since everyone has to pay them, doubling them or more will slow the economy and tend to impoverish people.

So that’s not a great idea either unless the taxes were very low to begin with.

The federal government and the states can also increase income taxes, particularly – at least on paper – on higher income earners. But that tends to cause collection problems and also tends to slow the economy and lower people’s standard of living if overdone.

There is some evidence that having capital gains taxes at all slows the economy and tends to prevent efficient changes in the economy by disincentivizing property transfers. It also tends to penalize people for inflation. Increasing them is an even worse idea.

Yet with virtually every part of their revenue down from the severe recession, hard pressed governments have to do something to compensate!

2. But since these other alternatives they have often cause as many problems as they solve and many worsen the economy besides by therefore tending to reduce the governments’ revenues even more, wouldn’t it be nice if there were a way governments could raise more revenues without slowing the economy?

It’s not yet being used as much as it could be and should be; but there are several taxes that could be implemented that by making health harming actions cost more would not only raise the revenue the governments need but not slow the economy and would in fact increase it by sharply cutting health care costs.

It is as yet not as well recognized or used as it will be; but many kinds of food and drinks can and should be taxed for exactly that reason.

So far, since most people really don’t yet have a clue how dreadfully bad for you it is to drink soft drinks and to eat junky commercial desserts and snacks but do know they are enjoyable and everyone they know consumes them and likes them and any for one single serving, they are modestly priced, taxes on soft drinks and these junky foods tend to get vigorously opposed because these people simply have no idea what the consequences are.

3. But as of the news last Wednesday, 2-24, that is about to change big time!

Leaders in business, medicine, public health, and government know that health insurance rates and medical costs are going up enough to significantly slow and harm the entire economy. Worse, now that so many younger people are fat, the trends are for this bad situation to get even worse.

So, if it were definitely proven that taxes on the soft drinks and foods responsible for the sharp increase in fatness and obesity would help reverse that, it’s simply a matter of time until every bit of this junk is taxed everywhere.

The exciting news day before yesterday is that just exactly that HAS now been demonstrated to be the case!

AFP online health news ran a story they titled:

“Junk food tax could help fight obesity: US study”

They put it online on, Wed Feb 24, 2010 at 6:52 pm ET; & the story was datelined: WASHINGTON (AFP.)

“Taxing high-fat and sugary junk food is a more effective way to fight obesity than making healthy foods like fruit and vegetables more affordable, a study published Wednesday shows.”

Researchers at the University of Buffalo in New York, led by psychologist Leonard Epstein, tested this.

They first tested the women in their group with prices for both junk foods and soft drinks and healthier foods at about the prices they would find at their local supermarket.

Then they tested twice with the prices of healthier foods noticeably lower than normal and then twice with the prices of the unhealthy food and drink items increased as much as they would be if taxed moderately.

The researchers found that lowering the prices of healthy foods like broccoli, yogurt, grapes, eggs, and fish actually INCREASED the overall calories in the foods and drinks the women put in their shopping carts.

“"It appears that mothers took the money they saved on the” less expensive “fruits and vegetables and treated the family to less healthy alternatives, such as chips and soda pop," said the authors of the study, published this week in Psychological Science.”

Taxing junk food, however, WAS effective in getting the women to cut back on the high-calorie, low-nutrient, high health harming foods and drinks; AND induced them to buy more healthy foods that were lower in calories.

In fact, in this study, taxing junk foods by 10 % resulted in the women buying 14.4 % less of the high-fat and sugary and health-harming foods and drinks. And, their week's shopping contained 6.5 % fewer calories.

In short, this study shows quite conclusively that simply taxing the foods and drinks that make people fat will cause them to become up to 6.5% less fat as shown on the scale. And, it will help keep them from getting even fatter besides.

Since even in fat people, there is still some bone and muscle, the percentage of bodyfat will actually improve and go down a good bit MORE than 6.5%.

(If someone is 30% fat and weighs 200 pounds, they have 60 pounds of fat. But if they lose 6.5% of their bodyweight as fat and then weigh 187 with 47 pounds of fat, 21.67 % of their fat will disappear. Their chances of getting heart disease, strokes, type 2 diabetes, and some cancers will drop sharply. Their blood indicators of health status will all improve without taking drugs to improve them; and their likely bills at the pharmacy, doctor’s office, and hospital will shrink enormously.)

We cannot leave governments with no way to increase their taxes and revenues and we cannot have them increasing taxes or increasing them much in ways that will harm the economy.

We also will have endless recessions if health care costs keep going up.

Now that a solution to BOTH things has been found, such taxes are inevitable.

And, that looks like a great idea to me!

Both regular and soft drinks tend to make people fat, so they will both be taxed. And, since excess sugar tends to make people fat, the regular soft drinks may get taxed twice, once for being a soft drink and once on their sugar content.

Refined grain foods that most of the junkier commercial desserts and snacks are made from will be taxed. Eventually bread made with refined grains and refined grain flours will be taxed. (The average man or woman does NOT yet know that the body reacts about the same to refined grains as it does to sugar. But since that’s so, refined grain and foods made from it will likely be taxed also.)