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Monday, July 23, 2012

Taxes For Our Own Good


Recently there have been disquieting moves by social engineers in several countries proposing use of taxes to force the public to eat healthier. Examples are: Denmark introduces food fat tax and from the UK: Fat tax' on unhealthy food must raise prices by 20% to have effect, says study.   

I didn't worry much about it when those proposals were in far-off places; I was confident that Aussies were much too sensible to let that happen here. But now our media are starting to join the push: Chew the fat on a sugar tax to trim waistlines.

I should have seen it coming when the “Traffic Lights” concept was first proposed: The WA Health Traffic Light System and Green Light, Eat Right. 

It appears that those who wish to save us from ourselves - and from overloading the public health system - are resolved to make us eat healthier whether we like it or not.

There are a lot of things I dislike about that concept, not the least being the idea that the government or its agencies has any right to direct me on a matter as basic as the food I choose to put in my mouth, apart from ensuring that it is not actually poisonous and is safely and humanely produced. I'll leave that philosophical side of the discussion for now and concentrate on the practical aspects.

There are two separate parts to the question:
  1. Does prohibitively taxing items based on their impact on health have a significant effect on public use of those items?
  2. If taxes or public education programmes are used with the intention of improving public health are the right food groups being taxed, promoted or discouraged? 
Do Taxes Work To Change Bad Habits?

There are two clear examples in this country. In Australia the Federal government has been steadily increasing taxes and excise on tobacco and alcohol over the past century. Our taxes are quite heavy on those items when compared to many other countries. For example, a packet of 20 Marlboro is over $16 and a 700ml (24oz US) bottle of cheap whisky starts at $28. Our dollar and the US dollar are close to parity at the moment.

Historically each time taxes or excise were increased on either commodity there were short-term reductions in use, but time shows those were just temporary blips. Changes in alcohol taxes sometimes led to changes in preferences from beer to spirits or wine or vice versa, but had little effect on overall consumption or consequent health problems such as youth drunkenness or adult alcoholism.

We had a recent specific example with the alcopops tax. The government was concerned with drinking problems in teenagers. They decided that the root cause was alcopops, a form of popular alcoholic soft drinks. They decided that drastically increasing the taxes on those was the way to fix the problem.

Effect of the increase in “alcopops” tax on alcohol-relatedharms in young people: a controlled interrupted time series

Med J Aust 2011; 195 (11): 690-693. doi:10.5694/mja10.10865
Objective: To measure alcohol-related harms to the health of young people presenting to emergency departments (EDs) of Gold Coast public hospitals before and after the increase in the federal government “alcopops” tax in 2008.
Design, setting and participants: Interrupted time series analysis over 5 years (28 April 2005 to 27 April 2010) of 15–29-year-olds presenting to EDs with alcohol-related harms compared with presentations of selected control groups.
Main outcome measures: Proportion of 15–29-year-olds presenting to EDs with alcohol-related harms compared with (i) 30–49-year-olds with alcohol-related harms, (ii)15–29-year-olds with asthma or appendicitis, and (iii) 15–29-year-olds with any non-alcohol and non-injury related ED presentation.
Results: Over a third of 15–29-year-olds presented to ED with alcohol-related conditions, as opposed to around a quarter for all other age groups. There was no significant decrease in alcohol-related ED presentations of 15–29-year-olds compared with any of the control groups after the increase in the tax. We found similar results for males and females, narrow and broad definitions of alcohol-related harms, under-19s, and visitors to and residents of the Gold Coast.
Conclusions: The increase in the tax on alcopops was not associated with any reduction in alcohol-related harms in this population in a unique tourist and holiday region. A more comprehensive approach to reducing alcohol harms in young people is needed.


Similarly, taxes on cigarettes have had only a marginal effect.

1991-92 to 2007-08 (2007-08 dollars)





Note that smoking was relatively unchanged when taxes were increased in the early '90s but dropped significantly later despite steady taxes from the mid-90s on. The significant reductions in cigarette smoking in this country came from better public education and various new State laws such as restriction of advertising, labelling changes, restricting sales to minors and drastically reducing the public places where people could legally smoke; allied to a paradigm shift in public acceptance of smoking in social situations. For example: 



5 CONCLUSION

The current focus of the anti-tobacco lobby on the rights and health of non-smokers has led to a proliferation of smoking bans in enclosed public places. The NSW Parliament only recently passed the Smoking Environment Amendment Act 2004 which will gradually phase-in an extension of smoking bans to include licensed premises in NSW. The support for such smoking bans has been growing and the implementation of similar restrictions in Ireland and New York appears to have been successful.

Smoking bans are only one method of tobacco control. The use of tobacco is also controlled through restrictions on the way it is packaged and advertised. Particular strategies are applied to minors such as prohibiting the manufacture and sale of toys and confectionery that resemble tobacco or the act of smoking, as well as prohibiting the sale of tobacco to persons under the age of 18. Health warnings have been included on tobacco packages for thirty years but have continued to adapt to contemporary requirements with graphic warnings the most recent development. The price of tobacco may be influenced by taxation policies and smoking cessation can be encouraged through media campaigns, and the availability of nicotine replacement therapy and telephone counselling. Litigation may also affect the activities of tobacco companies.

Tobacco continues to be the cause of much death and disease not only in Australia but also worldwide. The damage attributed to tobacco has been recognised by the World Health Organization and by the numerous countries to have signed and/or ratified the Framework Convention on Tobacco Control. Accordingly, governments continue to seek strategies that will encourage the minimisation, prevention and cessation of tobacco use.

I write as a long-term heavy smoker, who became increasingly annoyed as those changes occurred over the past few decades but eventually gave up in 2001. Now I look back and wonder why I took so long to wake up to the harm it was doing to me.

Will They Tax The Right Foods?

In my opinion this question is actually more important. If we accept the dubious hypothesis that taxes will work to solve the problem, to have any chance of success those taxes should target the right foods. Similarly any public education initiatives should be providing valid and useful information.

Based on the present proposals the foods to be targeted are fats, sugar and salts. The West Australian "Traffic Light" system clearly indicates what we could expect:

Green Foods and Drinks

Foods and drinks classified as Green are the healthiest choices. They are excellent sources of important nutrients needed for health and wellbeing, and low in saturated fat, added sugar and salt, and are lower in energy density.
Can be eaten every day or at every meal.
Examples include: Plain or whole grain breads and cereals, vegetables and salads, fruit, low fat milks and dairy products, lean meats, fish and poultry, eggs, and nuts and legumes.

Amber Foods and Drinks

Foods and drinks classified as Amber are mainly processed foods. They have some nutritional value but contain moderate levels of saturated fat, added sugar and/or salt and can, in large serve sizes, contribute to excess energy intake.
Should be carefully selected and eaten in moderation.
Examples include: Full fat milk and dairy products, some breakfast and cereal bars, some un-iced, plain, lower fat cakes and muffins, some processed meats (e.g. ham, pastrami), poly- or mono-unsaturated spreads, breakfast cereals with no added sugar or fat.

Red Foods and Drinks

Foods and drinks classified as Red are energy dense and nutrient poor foods and drinks that are high in saturated fat, sugar and/or salt. They can contribute to excess energy intake if consumed in large amounts or on a frequent basis.
Red foods also include deep fried foods, confectionary and chocolate (energy size limit), crisps, corn chips and similar salty snacks (energy size limit), sugar sweetened soft drinks, energy and sports drinks (energy size limit).
Should only be eaten occasionally.
Examples include: Fried foods, savoury commercial products such as pies and sausage rolls, snack bars, sweet biscuits, cakes and sweet pastries, small size confectionary and packets of crisps, some sweetened drinks and processed meats such as salamis.

Logically, taxes would be highest on the "Red Foods" and education would be focused on promoting the "Green Foods". In other words, we would be taxed and educated to eat in a way that is extreme low-fat and high-carbohydrate.

I can't imagine many programmes likely to lead to worse results. That would entrench the terrible low-fat high-whole-grains doctrine of the 20th century that I am becoming convinced is a significant factor in the so-called obesity epidemic occurring in the 21st.

Fat consumption in moderation is a trivial part of the problem and sugar is only part of the problem. My definition of moderation in that context is very different to the dieticians who advise governments; it is more like my Grandma, who wasted very little of the sheep when Grandfather killed it. She lived to 102.

The real problem is excessive carbohydrate consumption; sugar is only part of the carb load. A tax on sugar, even if it worked to cut sugar consumption, would have only a minimal effect as the nation continued to start its day with a wonderful 'healthy' bowl of highly processed cereal, drenched in milk, accompanied by some low-sugar spread on multigrain toast and margarine, washed down with a glass of 'healthy' fruit juice. Then, after a 'healthy' breakfast the day continues with an overload of 'healthy' multigrain breads and loads of fruit, spuds, corn, rice and pasta. All, of course, fat-free and low-sugar; so wonderfully healthy. Yeah, right.

Taubes puts it together better than I can; I agreed with him long before I had heard of him: Why We Get Fat and Good Calories, Bad Calories.

I believe that the suggestions to tax foods for public health reasons are misguided at best and may be counter-productive at worst.


Cheers, Alan, T2, Australia

Everything in Moderation - Except Laughter

PS See also this follow-up post: The Fat Tax: Dare I say I Told Them So?