Taxing fattening foods has a positive dollar return on investment....

Today's Post: Friday, 9-17-2010

Last Tuesday, 9-14, AFP had this story:

“Obesity costs US 215 billion dollars: study.”

“Obesity costs the US economy at least 215 billion dollars a year in direct and indirect impacts including medical expenses and lost productivity, a new study showed Tuesday.

The report by Brookings Institution researchers found that medical costs for obese adults amounts to 147 billion dollars more than for those with healthy weight, and the costs for children amount of 14.3 billion dollars annually.

"Medical costs appear to have increased dramatically over the last decade and may continue to grow with future increases in rates of overweight and obesity in US adults and children, perhaps substantially," said the researchers writing in the journal Diabetes, Metabolic Syndrome and Obesity: Targets and Therapy.

In addition to these direct expenditures, obesity's costs come from lost productivity, absenteeism, disability and premature death. The study also found that transportation costs may be higher because of heavier weights for airline passengers, for example.

"Total productivity costs are likely substantial, perhaps as high as 66 billion dollars annually for the US," said researchers Ross Hammond and Ruth Levine of the Brookings economic studies program.

Although the costs of obesity have been analyzed in the past, less attention has been paid to other factors such as transportation and environmental impacts.

"Increases in body weight among Americans mean that more fuel and, potentially, larger vehicles are needed to transport the same number of commuters and travelers each year," the researchers said.

"This produces a direct cost (in the form of greater spending on fuel), as well as potential indirect costs in the form of greater greenhouse gas emissions."”

In addition to these costs, the people who are eating and exercising in a way that will make them more obese later are also costing the economy more in medical care costs because they may develop those diseases to a point where they or their health insurance has to pay out medical care costs.

These include doctor visits and drugs and some hospital stays for things like high blood pressure, high LDL cholesterol, type 2 diabetes, ED, strokes, heart attacks, angina, and PAD, peripheral artery disease. Then add on the extra cases of Alzheimer’s disease, cancer, and vascular dementia.

So, I believe the true costs are as much as double or even triple their estimate.

It would be nice if all the people who are badly overweight, obese, or morbidly obese began doing vigorous exercise if only for a few minutes on most days. But that is a hard thing to make happen with government policy. It’s the minimum amount of exercise needed for good health; but only about 5% of the people do that much or more today.

The foods and drinks that produce obesity – and these diseases -- however are more than half of the cause. What foods and drinks do this is becoming quite well known. Most of the people today eat and drink little else.

A study was done which proved that for the average person, making healthy foods less expensive resulted in people buying the same amount of those and buying even more of the fattening stuff!

HOWEVER, the same study showed that making the fattening stuff more expensive – as substantial taxes would do – caused the desired result. People bought less fattening stuff and more health supporting foods and drinks.

In addition, this is an instant effect that you do NOT need to educate people or coach them to do. Doing that too might well enhance the effect. But taxing the bad stuff proved sufficient.

The work with smoking cessation we posted on yesterday showed that money spent on it saved more than it cost and had a positive return on investment. Not only that, this is using methods that mostly do NOT yet inform the people trying to quit about the real health harm of smoking or testing them as they begin to show them the proof that they are already being harmed.

Since there are already taxes on cigarettes and tobacco, increasing those taxes would also get a positive return. But the return would less than directly spending more on helping people quit because the higher taxes would be on less sales. The reduction in health care costs would be the main positive return.

Adequately taxing fattening foods, drinks, and food components would generate a dramatically more positive return! The reduction in health care costs would still be there. But since virtually no such taxes of any significance are collected now, the governments involved would get a very positive return indeed.

Regular and diet soft drinks are about equally fattening because the diet soft drinks act as such a strong stimulant drug to stimulate people to eat more sugary foods, the people who drink them make up for the lack of calories in the diet drinks by eating more fattening foods than they otherwise would.

If every state AND the federal government taxed all soft drink sales by 10 cents an ounce each for a total of 20 cents an ounce, the reduction in soft drink consumption would sharply cut our national obesity rate. And, all the governments involved would have a large source of new revenue that would not act as a drag on the economy.

Increasing sales and income taxes and government fees doesn’t do as well because they reduce the ability of their people to buy things and keep the economy going. Since taxing fattening foods and drinks lowers health care costs by more than the reduction in spending on those foods, it actually improves the economy instead!

All other use of sugar, high fructose corn syrup, and refined grains could be comparably taxed with similar results.

These taxes would cut down on obesity and its costs, improve our economy, and bail out cash starved governments.

They would get fast results in cutting obesity and its related costs.

Since I cannot wave a magic wand and have such taxes imposed tomorrow, I’m speaking in favor of them and explaining their advantages.

And, I’m doing my best to help individual people who want to stop being fat and sick and overloaded with avoidable health care costs to stop ingesting these things on their own.

That will help. And it will help the people who do it a lot. But adding the taxes too would have larger scale and faster effects.