Effectiveness of Food Taxes - Research Paper Example

English 15 May Effectiveness of Food Taxes in reducing Obesity and other Diet related Diseases When people take in morecalories than they consume, obesity and other diet related conditions such as overweight occur. Being obese or overweight increases chances of developing illnesses such as stroke, heart disease and diabetes among others. The number of children and adults today who suffer from certain chronic and acute conditions related to their diet is increasing day by day. Obesity, overweight and associated cardiac illnesses have become common both in the western and developing world. It is rather a tragic incident that many people have lost their lives due to such diseases, cutting short their lives even before some of them have achieved their potential. The situation in USA is alarming with two thirds of the adults’ population being described as either obese or overweight, while childhood obesity almost tripled in the past three decades (Kalaidis, theweek.com). FAO ranks USA second after Brazil with 31.8 percent of adults being obese (Kalaidis, theweek.com). The developing and persistent problem has led to the obesity and overweight conditions been referred to as ‘the white man problems.’ Perhaps because of the duration the problems have remained in the western world. As of 2013, statistics indicated that 23.9 million children were obese or overweight, approximately 5 times more compared to the 1970s, and 154.7 million adults in the situation, which has more than doubled after the 70s (American Heart Association, Heart.org). This speculation is arguably not a fact; most people in poor African and Asian nation struggle with these diseases. Past research indicate that “nutrition transition had been accelerating in developing nation, with an increasing trend in energy intake, especially from high energy density, high fat and low fiber diets, which is as a result of income changes that affect their dietary behavior, causing the burden of diseases related to poor diets shift more to the poor” (Du et al. 1512). It’s quite rampant in the famous sub Saharan regions where hunger and STDs have dominated. In fact the obesity situation is said to almost outdo the hunger crisis. This paper argues that the solution to preventing diseases caused by obesity and overweight does not lie within the taxation policies, but requires set of combined measures to assist the population in healthy consumption. It evaluates food taxes effectiveness, resulting implications and complexity of the policy. Governments across the world have deployed diverse measures in fight against obesity and overweight diet related diseases including high taxation strategies and bans on categorized food staff. It has been argued that food taxes are effective in reducing the rate of obesity and other diet related diseases but the viability of the program still remains questionable. Many nations have tried taxation policy focusing on the pricing and consumption of the categorized unhealthy foods. Taxes have been imposed on fatty and sugary foods in different states and countries, but the effects varied in the populations. Examples are France, Denmark, Hungary and Mexico. These food taxes is a step towards combating obesity and overweight; its implementation have been a success in most region but the expected effect still feels like an illusion. This policy undoubtedly affects the consumer finances, but they have learned to access similar products at a cheaper price even if it meant going across the borders. There has always been too much controversy surrounding the food tax policies, especially the ‘fat tax’. Many nations have experimented such policies only to roll back later for their ineffectiveness. In USA, Maryland, Maine and California adopted the tax legislation only to reverse later, for failure to reduce people’s consumption (Vahouny 37). Snack Food Association that was central in instituting the policy in the states could not maintain as consumers actually paid no insignificant attention to the prices. It is quite a concern why after such repeal USA at large has not instituted the policy again. While almost every type of food in the contemporary world is either manufactured, or prepared using unhealthy fats or fits in the category of the fattening food, USA imposition of fat tax to its citizens would feel impractical. The case of Denmark provides nations with the expected effects of fat tax upon implementation. It not only affected the economy, but the consumers and food producers. The rise and fall of the fat tax policy in Denmark demonstrated to the global society how difficult it was to change consumers’ behavior by imposing additional duties to their most accessible and common food types (Holm, Jensen and Vallgarda 2). To escape the high fattening food prices in Denmark, families crossed the border into countries like Germany and Sweden to shop the limited items. It seems many nations are escaping fat tax to impose duties on sweetening drinks, to save its effect on the economy and partially support combat health diseases. There other cases where taxation policy on fatty foods have been sustained and proved viable. Although Denmark repealed, it does not mean other nations could not sustain it as well. Hungary has one of its kind of fat tax that evolved from what was dabbed as the ‘hamburger’ then ‘crisps’ tax, which focused on limiting highly accessible and consumed unhealthy fatty products (Policy Solutions 2). The effect of tax on immoderately fatty foods in Hungary supplements the tax policies on the sugary and salty junks to suppress consumption behaviors and eventually obesity. However, the effectiveness of the policies is still unclear. Finland has had a long history in combating cardiac diseases in its population. It exceptionally stand out from the time it began campaigns to educate people of healthy lifestyles, to fight the heart diseases and obesity cases, which were largely contributed by the economic proliferation of the dairy sector (Allen, bbc.co.uk). Finland demonstrated a scenario of reduction in heart diseases and obesity since the 70s with the switch from butter to margarine to the tax imposition on soft drinks. Looking at the past cases where fat tax and sweetening food taxes have been legalized in economies across the world, it is certain the difficult governments face is influencing people to behave or consume in particular way. While the population of USA is a mixture people with different classes of earnings and lifestyle, consumption pattern would vary across different demographic groups. What would prevent a rich family from purchasing the highly priced and fat or sugar saturated burgers and beverages if they desire them? In any case, money may not be a problem for them. Though high taxes of unhealthy foods touches on every household, it is more likely the high income households’ consumption behavior could be less affected compared to low income ones. It has always been expected that with the high unhealthy food taxes, people would be able to make better and responsible decisions over their health and that of their families. This is right for minority group; the majority instead finds other unhealthy alternatives. Rich people continue their unhealthy consumption behavior because they would rarely feel the pinch of price hikes. If the tax hikes for favorite junk food and other common food highly consumed by the poor, they end up switching with other cheaper substitutes. Nothing would prevent them from consuming more of the substitute. Like any other person, it not exclusively about the fatty and sugary food, but includes the portion of food and the intervals at which it’s consumed. Curbing consumers’ appetite is quite a huge problem and governments should stop comparing it with other sin taxes as those on Tobacco. One, tobacco is used by a subgroup in the population compared to food which is essential for all. Second “lessons from tobacco taxes are hardly informative when it comes to food and drink” (Taylor, Nationalpost.com). It is all about shifting demand through pricing system, which is often unachievable by applying sales taxes at the point of purchase (King, milkeninstitute.org). A change in a $1 may not be effective, but the higher the change the more effective it would be in altering consumer behavior. People would be willing to spend the extra cost in other substantial products or switch to home- made food. However, there is a great potential of reducing consumption of unhealthy prepared foodstuff by employing excise taxes as is currently occurring in Mexico. Excise taxes would present a challenge to big brand producers of high fat saturated foods and sugary drinks like Coca Cola and Mondelez in Mexico, whose sales internally would be expected to reduce. Using excise taxes, consumer behavior may change depending on the responsiveness of the decreased purchases, upon tax increase and the availability of a close substitute (William and Christ 2). Because they work on per unit basis, those who consume more and the less wealthy are highly impacted. Their consumption is altered when they choose to spend their incomes on categorized unhealthy food subject to excise tax. However, this is not always the case, because taxes on unhealthy food can yield different effects on the large population affected unlike the tobacco tax. The benefit of taxation policy on junk foodstuff is its contribution governments’ revenue. While a lot of taxable junk food is out in the market, what is the benefit of the revenue to the affected society? Remember the rich households could easily cater for their medical needs, but the poor people are on the verge of losing their lives due to risky diet related diseases. Governments have failed in the past to invest the collected tax back into preventing obesity diet related illnesses. In some cases the levied taxed have been consumed in other development areas instead of health programs. According Oaks’s research in Maine state that had a snack tax from 1991to 2001, the regression analysis conducted indicated that the tax had no significant impact on obesity rates; instead of lowering obesity, the rate increased by seventy five percent showing that obese citizens had risen to more than five in ten (37-38). Taxing the people and failing to channel back the funds in anti-obesity and diet related programs is equal to embezzlement. Fat tax can be used in a positive purpose, specifically to generate healthcare benefit to the same society at large. What has always occurred in the past is the misuse of funds, and most governments may not fully account for it in healthcare. This is why most citizens object the policy because they are not satisfied with how the tax is used. It is a high time the governments think of better integrated strategies to fight diet related diseases. If junk food is highly taxed, people want to see the outcome of the funds use without misappropriation. Other than imposing sales or excise taxes on high calorie foods, government should give incentives to high nutritional value products like fruits and vegetables to make them not only affordable but available (Akabas, Lederman and Moore 70). Giving people better alternatives is always a tool to influence behavior, especially if prices are lowered and offer more value than the forgone. Rather than imposing bans, governments should consider enhancing substitute healthy food and promote personal freedom in choosing what they want to consume. However, people should be made aware that their wrong choices come at a cost, were they would be responsible for their own health care. A research conducted by French on pricing intervention revealed that price reduction on lower fat snacks, fresh fruits and vegetables yielded increase in sales volume, which promoted healthier food choices (nutrition.org). A similar study conducted in South Africa showed that with a subsidy program that rebates consumers of healthy products, “rebates predicted a higher ratio of expenditure on healthy to total food expenditure and a lower ratio of expenditure on less-desirable food to total food expenditure” (Sturm et al 570). All this indicate that fat tax alone is insufficient, but when implemented with programs on subsidies program could achieve succeed in influencing consumption behavior. The poor in the society comprise the largest group who pass their health liability to the government. Unlike the poor who can cater for their medical conditions, a poor and an average person have to rely on government subsidies or support due to their shortage of financial resources. Although taxes on junk foods raise substantial revenues in an economy, the impact is much higher on the low income earners, who spend much of their earnings in food. According to Edwards, consumption taxes are regressive; they require people to pay “similar amount of tax on each item regardless of their earnings, which causes the poor to spend almost their entire income in buying basic necessities for survival with rarely nothing to save or invest” (83). When the government chooses to persist and raise the taxes, then they make tradeoff between increasing the poor citizen’s tax burden and raising governments’ revenue. Most of the common food for the poor people could be categorized as unhealthy, meaning taxing could be subjected to the basic products they use. The impact of regression is definitely extreme on the low income group of the society. Without another intervention to support the poor they even get worse in consuming further unhealthy, cheaper and low nutritional foods to compensate. With such a trend it would be impossible to influence people from diet related illnesses. Equity issues are at the core of hiking food taxes, which means they are sensitive and requiring attention. The question that most consumers have regards to is what is categorized as unhealthy. In the modern societies, as technological evolutions have enabled chemically prepared food types and farm productions, what can be grouped as healthy and unhealthy (Hoffer and Saul 22). In fact it feels like a humor talking about healthy food in the modern times. When categorizing unhealthy foods even most of the healthy prepared foods would be affected. Most of the foods on the shop selves have chemical preservatives or manufactured using combined chemicals that could be harmful to people’s health. Often the junk foods in the groceries and fast foods at restaurants and outlets, which contain high sugar, fat and salty contents are the focus. However, ‘unhealthy’ is complex because even a food portion with less than standard nutrients would still be regarded as of low nutritional value. When fatty foods are taxed, that includes high fat content, cholesterol and fatty acid, if high energy foods then most of the rich carbohydrates food are affected. This is the complexities of what is termed as unhealthy foods to be taxed. It requires the governments and their nutritional experts to be very refined in selecting which products to be taxed. Otherwise it would be rather harsh to the common citizens, if high taxes are relayed to almost every product they use either from the producers or at point of sales. If the coverage of taxable foods is great, the higher the chances of poor people accessing lower nutritional food to avoid the costs. Meaning governments would be initiating another diet related problem besides curbing obesity. Obesity condition is not only as a result unhealthy food consumption. Genetic factors have been studied to be involved in causing rare form of obesity. There cases where genetic mutation in certain disorders or even associated with heredity in families have caused monogenic types of obesity (Lyon and Hirschhorn 215). What such an incident requires to treat obesity is not food taxes, but appropriate medical treatment strategies after the identification of the genes. Obesity, overweight or other diet related diseases are not issues that can be fought with food tax policy alone or blocking consumers from consuming certain food types by imposing bans. Bans and tax policies are one just one strategy that need to be incorporated with other social and non-economic measures to positively influence healthy choices of consumer behavior. Besides food taxes it is essential governments are keen in regulating food marketing directed towards children either on media or type of food offered in school canteens and lunch programs (Baur, Twigg and Magnusson 130). In quest to reduce obesity among children, Mitchell Obama has led a campaign targeting on school meals to support healthy food choices and physical exercises (Nixon, nytimes.com). With time fat or sugary soft drink taxes would become unnoticeable when people adapt to the price changes of the items. This would turn out just as the food labels, which most people are not sensitive to while purchasing packaged products. Economic tools do not necessarily mean they would be effective in solving health issues. A research involving different scenarios of tax on sugars, all fats, saturated fats and subsidy on fibers indicated that imposing a flat tax would decrease fat intakes and lead to increase in sugars and vice versa; despite the decreased level of energy intake, taxes or any other intervention alone showed that it would not solve obesity problem (Cash and Lacanilao176). With the help of the government, education systems and workplaces should implement strategies to promote physical activities. Sports in schools and within the community, and affordable gym plaza closer to busy workplace as well as promoting walking and jogging to closer destination should be recommended. Only when a set of favorable measures are implemented, would obesity risk be lowered effectively in the long run. Acroynms FAO – Food and Agricultural Organization Works Cited Akabas, S., S.A. Lederman and, B.J. Moore. Textbook of Obesity: Biological, Psychological and Cultural Influences. 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