by Marion Nestle

Currently browsing posts about: Taxes

Jul 2 2012

Soda taxes and other measures designed to fight obesity

My once-a-month (first Sunday) Q and A column in the San Francisco Chronicle deals with recent city initiatives.

Q:Why do municipalities continue to try to tell us what to eat or drink through taxes (the 1-cent soda tax on the Richmond ballot in November) or outright bans (eliminating super-size soft drinks, proposed by Mayor Michael Bloomberg in New York)?  Richmond residents could just buy their sodas in neighboring towns, and 1 cent seems hardly enough to influence anyone. New Yorkers could just buy two drinks if they want more. Isn’t this all rather silly?

A: Silly? On the contrary. These are dead-serious attempts to address the health problems caused by obesity through “environmental” change – changing the context in which we make food choices.

By now, health officials are well aware that asking individuals to take responsibility for making their own healthy food choices hasn’t got a prayer of success in the face of a marketing environment that encourages people to eat everywhere, all day long, in very large portions and at relatively low cost.

This is the default food environment, where it’s useless to tell people they need to eat less and expect them to do it. They can’t. Instead, it makes sense to try to change the food environment to make healthy choices the easy choices.

Healthy by design?

Suppose, for example, that all kids’ meals at fast-food restaurants were healthy by design and automatically provided milk or water.

You could still order a soda for your kid, but you would have to ask for it – and pay extra. If you are like most people, you won’t bother. That’s why the default matters.

Cities are trying to change the default. One change may or may not make a difference – we don’t know that yet. But changing the default might well make healthy choices easier in schools, fast-food restaurants and other institutions.

Bloomberg’s proposal in New York, to ban sodas larger than 16 ounces, is one such step. From my standpoint, 16 ounces is generous. It’s two full servings and provides about 50 grams of sugars, 200 calories and 10 percent of daily calories for someone who consumes 2,000 calories a day.

Portion sizes used to be a lot smaller. Decades ago, Coca-Cola advertised 16-ounce bottles as “big” and enough to serve three over ice.

If we could recognize that larger portions have more calories – and act on this knowledge – we might have an easier time maintaining weight. But we can’t, at least not easily.

The Richmond soda tax proposal recognizes that more than half of Richmond schoolchildren are overweight or obese. This percentage is higher than in other areas of Contra Costa County.

Even more striking, city officials estimate that two-thirds of Richmond adolescents consume more than 400 calories a day from soft drinks.

Kids who habitually drink sugary sodas tend to have worse diets, to be fatter and to display more risk factors for chronic diseases than kids who don’t.

This makes sugar-sweetened beverages an obvious target for environmental approaches to obesity prevention. Sugary sodas have calories but no nutrients. They are consumed in large amounts. They are highly correlated with obesity and health risks. They are “liquid candy.”

Sugary drinks should be once-in-a-while treats, not daily fare.

Richmond officials hope that the tax will encourage healthier choices. They deliberately set the proposed tax small so it would not unduly burden low-income residents.

One penny per ounce – 16 cents on a 16-ounce soda – may not be enough to change behavior, but it sends a clear message: It’s less expensive to drink water, and it’s healthier to reduce soda intake.

Funding programs

The Richmond proposal has one other critically important feature. It specifies that soda tax revenue will be used to fund city programs to address and reduce childhood obesity, especially in low-income areas where obesity rates are high.

These experiments are worth national attention. They may well do some good for individuals, and I can’t see how they would cause harm in any way except, perhaps, to the economic interests of soda companies.

Soda companies are taking these initiatives seriously. They are pouring millions of dollars into lobbying and community campaigns against both proposals.

Both have elicited plenty of public discussion, much of it focused on the rights of individuals versus the public health interests of government.

What I like about these initiatives is that they do not infringe on individual rights – people can buy as much soda as they want. The proposals simply try to make the default food environment slightly more conducive to healthy choices.

I’m hoping both proposals go forward. I can’t wait to see how they play out.

Oct 24 2011

On Denmark’s “fat tax”

I have a commentary in the October 23 issue of New Scientist (UK):

Cover of 22 October 2011 issue of New Scientist magazine

World’s first fat tax: what will it achieve?

Enviably healthy Denmark is leading the way in taxing unhealthy food. Why are they doing it, and will it work

THE Danish government’s now infamous “fat tax” has caused an international uproar, applauded by public health advocates on the one hand and dismissed on the other as nanny-state social engineering gone berserk.

I see it as one country’s attempt to stave off rising obesity rates, and its associated medical conditions, when other options seem less feasible. But the policies appear confusing. Why Denmark of all places? Why particular foods? Will such taxes really change eating behaviour? And aren’t there better ways to halt or reverse rising rates of diet-related chronic disease?

Before getting to these questions, let’s look at what Denmark has done. In 2009, its government announced a major tax overhaul aimed at cushioning the shock of the global economic crisis, promoting renewable energy, protecting the environment, discouraging climate change, and improving health – all while maintaining revenues, of course.

The tax reforms make it more expensive to produce products likely to harm the environment and to consume products potentially harmful to health, specifically tobacco, ice cream, chocolate, candy, sugar-sweetened soft drinks, and foods containing saturated fats.

Some of these taxes took effect last July. The current fuss is over the introduction this month of a tax on foods containing at least 2.3 per cent saturated fat, a category that includes margarine, salad and cooking oils, animal fats, and dairy products, but not – thanks to effective lobbying from the dairy industry – fluid milk.

Copenhagen is the home of René Redzepi’s Noma, voted the world’s best restaurant for the past two years. To Americans, “Danish” means highly calorific fruit – and cheese-filled breakfast pastries. Despite such culinary riches, the Nordic nation reports enviable health statistics and a social support system beyond the wildest imagination of inhabitants of many countries. Danish citizens are entitled to free or very low-cost childcare, education and healthcare. Cycle lanes and high taxes on cars make bicycles the preferred method for getting to school or work, even by 63 per cent of members of the Danish parliament, the Folketing.

Taxes pay for this through policies that maintain a relatively narrow gap between the incomes of rich and poor. The Danish population is literate and educated. Its adult smoking rate is 19 per cent. Its obesity rate is 13.4 per cent, below the European average of 15 per cent and a level not seen in the US since the 1970s. Denmark has long used the tax system to achieve health goals. It has taxed candy for nearly 90 years, and was the first country to ban trans-fats in 2003.

Because its level of income disparity is relatively low, the effects of health taxes are less hard on the poor than in many other countries. But the Danes want their health to be better. Obesity rates may be low by US standards, but they used to be lower – 9.5 per cent in 2000. Life expectancy in Denmark is 79 years, at least two years below that in Japan or Iceland. The stated goal of the tax policies is to increase life expectancy as well as to reduce the burden and cost of illness from diet-related diseases.

Like all taxes, the “health” taxes are supposed to raise revenue: 2.75 billion Danish kroner annually ($470 million). The tax on saturated fat is expected to account for more than one-third of that. Since all food fats – no exceptions – are mixtures of saturated, unsaturated, and polyunsaturated fatty acids, the tax will have to be worked out food by food. Producers must do this, pay the tax, and pass the cost on to consumers.

Taxes on cigarettes are set high enough to discourage use, especially among young people. But the food taxes are low, 0.34 kroner on a litre of soft drinks, for example. The “fat” tax is 16 kroner per kilogram of saturated fat. In dollars, the taxes will add 12 cents to a bag of crisps and 40 cents to the price of a burger. Whether these amounts will discourage purchases remains to be seen.

Other countries are playing “me too” or waiting to see the results of Denmark’s experiment. Hungary has imposed a small tax on sweets, salty snacks, and sugary and caffeinated drinks and intends to use the revenues to offset healthcare costs. Romania and Iceland had such taxes but dropped them, whereas Finland and Ireland are considering them. Surprisingly, given his party’s anti-nanny state platform, UK prime minister David Cameron is suggesting food taxes to counter the nation’s burgeoning obesity crisis. The US has resisted calls for taxes on sugar-sweetened beverages, not least because the soft drink companies spent millions of dollars on defeating such proposals.

Leaving aside the usual criticisms, such as the impact on poorer people, I have a different reason for being troubled by tax interventions. They aim to change individual behaviour, but do little to change the behaviour of corporations that make and market unhealthful products, spending vast fortunes to make them available, desirable and socially acceptable.

Today, more and more evidence demonstrates the importance of food environment factors, such as processing, cost and marketing, in influencing food choices (The Lancet, DOI: 10.1016/S0140-6736(11)60813-1). Raising taxes is one way to change that environment by influencing the cost to the consumer. But governments seriously concerned about reducing rates of chronic disease should also consider ways to regulate production of unhealthy products, along with the ways they are marketed.

In the meantime, let us congratulate Denmark on what could be viewed as a revolutionary experiment. I can’t wait to see the results.

Marion Nestle is the author of Food Politics and What To Eat and is the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University

Mar 22 2011

Who is responsible for dealing with poverty?

I don’t often respond to comments but this one about the political division caused by obesity is worth further discussion.

I truly resent your statement that Republicans don’t want to have an education, access to health care or access to nutritious food. Such statements not only undermine your credibility but contribute nothing to the discussion.

For the record, Republicans as just as committed to these things as the Democrats. The difference is that the Republicans don’t believe that it is the taxpayers responsibility to provide them.

If not taxpayers, who?  The writer does not say.

I thought of this question when I read the new report released by the NYC Center for Economic Opportunity. The center was established in 2006 by Mayor Bloomberg to seek evidence-based ways to reduce poverty in the city.

As the New York Times explains:

Without a flood of food stamps and tax benefits for low-income families, about 250,000 more New Yorkers would have slipped into poverty at the height of the recession…The center concluded that the poverty rate would have been three percentage points higher without federal tax programs passed in 2009 for low-income families and an aggressive city program to enroll New Yorkers who were not receiving public assistance but were eligible for food stamps, coupled with higher food stamp benefits.

Beyond personal damage, poverty is demonstrably bad for the health of cities.  Poor people do not buy much.  They cause social unrest.  They drain public resources.  Getting people out of poverty is sensible public policy and has been throughout history.

History also tells us that private charity is never adequate to meet the needs of the poor.

That’s why U.S. taxpayers support food stamp and other food assistance programs to the tune of close to $100 billion a year, as can be seen in the USDA’s budget figures.

The “aggressive city program” paid off.  At a time of economic crisis, poverty levels throughout America increased.  New York City’s did not.

Isn’t dealing with poverty a core function of government?  Isn’t some reasonable level of income equity a core feature of democratic society?

I think so, but await your opinions.

Mar 17 2011

Soda companies vs. soda taxes: breathtaking creativity

I keep telling you.   You can’t make this stuff up.  Try these for food politics–in this case, soda politics–in action.

Beverage Association gives $10 million to Children’s Hospital of Philadelphia (CHOP)

From the Philadelphia Inquirer blog (March 16):

In keeping with a controversial pledge to made last year to City Council as part of an effort to ward off Mayor Nutter’s steep tax on sugar-sweetened beverages, the soft-drink industry will donate $10 million to the Children’s Hospital of Philadelphia to fund research into and prevention of childhood obesity.

The three-year grant is funded by a new organization, the Foundation for a Healthy America, created by the American Beverage Association, the national trade group representing manufacturers and bottlers. The ABA was instrumental in lobbying Philadelphia City Council to reject Nutter’s proposal to tax sugary drinks at 2-cents per ounce as a way to cut consumption and raise money for the general fund.

In a press release Wednesday, CHOP insisted that it will “retain absolute clinical and research independence,” as the source of its funding for the research is likely to come under attack from those wary of the beverage industry’s influence. That includes funding for clinical studies to be submitted to peer-reviewed publications.

Atkins Obesity Center publishes review of effects of soft drinks on obesity

In a delicious irony, the latest review of this topic comes from the Atkins Center at Berkeley.  Yes, the Atkins Diet Atkins, the one that promotes high-fat, low-carbohydrates, and has everything to gain from proving that sugars are bad for you.

With that duly noted, set the irony aside.  The review was funded by independent agencies and organizations.  Let’s take its results at face value.

The reviewers looked at five kinds of evidence: secular trends, mechanisms, observational studies, intervention trials and meta-analyses.  All supported the idea that

The currently available evidence is extensive and consistently supports the hypothesis that sweetened beverage intake is a risk factor for the development of obesity and has made a substantive contribution to the obesity epidemic experienced in the USA in recent decades.

Sweetened beverages are an especially promising focus for efforts to prevent and reduce obesity for two reasons: (i) the evidence supporting the association between sweetened beverage intake and excess weight is stronger than for any other single type of food or beverage; and (ii) sweetened beverages provide no nutritional benefit other than energy and water.

Coca-Cola funds North Carolina School of Public Health campaign against Childhood Obesity

Isn’t that nice of them?  The apparently unironical slogan of the campaign : “Everything in moderation.”

Robert Wood Johnson Foundation report, “F as in Fat”, features piece by PepsiCo’s CEO

Melanie Warner, writing on bNET, explains that the RWJ Foundation is usually scrupulously independent but that putting Pepsi’s PR piece into its document makes no sense.

A third of the way into the report, up pops a bizarre “personal perspective” from PepsiCo’s (PEP) CEO Indra Nooyi in which she details the many ways her company is working to make America healthier. “Helping consumers by building on our portfolio of wholesome and enjoyable foods is not just good business for PepsiCo -– it’s the right thing to do for people everywhere,” Nooyi chirps in a two-page soliloquy that reads like a press release and touts everything from Pepsi’s pledge to reduce the sodium in its products by 25% by 2015 to its reduced sugar drinks like Trop50 and G2. No other food company is mentioned, just Pepsi.

[This inclusion]…also ties into the ongoing debate about what role the food industry should play in helping Americans slim down. Are food companies trusted partners who are committed to fundamental changes, or is getting people to eat healthier versions of processed food really a whole lot of Titanic deck chairs?

As the research linking soft drinks to obesity gets stronger and stronger, it is no wonder that the Beverage Association is buying off city councils, and soft drink companies are eager to position themselves as helping to solve the problem of childhood obesity, not cause it.

Do these actions remind you of any other industry’s behavior?  Cigarette companies, anyone?

Dec 17 2010

Food corporations buy silence from “partners”

Does corporate social responsibility pay off for corporations?  Indeed it does.  Corporate money buys silence, if nothing else.

William Neuman of the New York Times provides a perfect example of how corporate sponsorship gets precisely what it is intended to do.

In this particular case:

  • The corporations are soda companies, Coke and Pepsi.
  • The social responsibility is donations of millions of dollars to a good cause.
  • The cause is Save the Children, a group devoted to child health and development projects internationally and domestically.
  • The intention?   Get Save the Children to stop advocating in favor of soda taxes.

Not long ago, Save the Children was a strong advocate for soda taxes.  Now it is not.  How come?  The group’s website explains:

about a minute ago we said, Corporate donors support us but do not pressure us. Our focus is children not soda tax policy. Back to saving more children now.

The Times, however, suggests a different explanation:

executives at Save the Children were seeking a major grant from Coca-Cola to help finance the health and education programs that the charity conducts here and abroad, including its work on childhood obesity.The talks with Coke are still going on. But the soda tax work has been stopped….In interviews this month, Carolyn Miles, chief operating officer of Save the Children, said there was no connection between the group’s about-face on soda taxes and the discussions with Coke. A $5 million grant from PepsiCo also had no influence on the decision, she said. Both companies fiercely oppose soda taxes.

A mere coincidence?  I don’t think so.  This is a clear win for soda companies, just as was Coca-Cola’s sponsorship of the educational activities of the American Academy of Family Physicians. You can bet those activities do not involve telling parents not to give sodas to their kids.

Is this a win for Save the Children?  The Times reports that the Robert Wood Johnson Foundation, which funds some of the group’s anti-obesity initiatives, is disappointed.  Evidently, its $3.5 million donation wasn’t enough to convince the group to continue its anti-soda activities.

In the meantime, soda taxes continue to stay on the radar as a weight control strategy.  A new study in the Archives of Internal Medicine suggests that soda taxes could lead to a small but potentially significant weight loss.

According to FoodNavigator’s report about the study,the authors say that applying such taxes throughout the United States could generate a billion dollars or more.  It quotes lead researcher Eric Finkelstein: “Although small, given the rising trend in obesity rates, especially among youth, any strategy that shows even modest weight loss should be considered.”

This kind of study is a challenge to soda companies.  Watch Coke and Pepsi continue donations to charitable and health groups and watch those groups say not one word about the contribution of sodas to obesity.  Cigarettes, anyone?

Oct 7 2010

New York City says no to using Food Stamps for sodas

New York City is serious about trying to reduce rates of obesity and the expensive and debilitating conditions for which obesity raises risks.  Its latest move?  It is asking the USDA for a Food Stamp waiver for two years during which recipients would not be allowed to use their benefit cards to buy sodas.

I hardly know where to begin on this one.  I learned about this from the front page of this morning’s New York Times and from reading the accompanying op-ed by city Health Commissioner Tom Farley and New York State Health Commissioner Richard Daines.

This is an old, old idea that has been consistently rejected by USDA and by public health advocates for the poor.  It is based on the commonly held notion—never conclusively demonstrated by independent data—that recipients of Food Stamps (now called SNAP, the Supplemental Nutrition Assistance Program)–make worse food choices than everyone else.

New York City, according to the Times account, has 1.7 million people who receive SNAP benefits.  The rationale for banning soda purchases?

City statistics released last month showed that nearly 40 percent of public-school children in kindergarten through eighth grade were overweight or obese, and that obesity rates were substantially higher in poor neighborhoods. City studies show that consumption of sugared beverages is consistently higher in those neighborhoods….Anticipating such criticism, Dr. Farley and Dr. Daines said that the food-stamp program already prohibited the use of benefits to buy cigarettes, beer, wine, liquor or prepared foods.

The op-ed points out:

Every year, tens of millions of federal dollars are spent on sweetened beverages in New York City through the food stamp program — far more than is spent on obesity prevention. This amounts to an enormous subsidy to the sweetened beverage industry.

I asked for data on soda purchases by New York City SNAP recipients, and was sent the city’s waiver request to USDA:

An estimated $75 to $135 million dollars of SNAP funds were spent on sweetened beverages in New York City (NYC) alone in 2009 [Based on Nielsen beverage market data for 2009, the prevalence of SNAP participants in NYC, and prior studies of SNAP purchasing behavior].   This use of federal funds to purchase a group of products that are leading contributors to the diabetes and obesity epidemics (and whose extensive consumption contradicts the USDA’s own recommended dietary guidelines) far outstrips current federal funding for prevention of these health problems.

I am, as readers of this blog well know, no fan of sodas.   If people want to do something about controlling body weight, the best place to begin is by cutting out sodas.  Soft drinks contain sugars and, therefore, calories, but nothing else.  As the Center for Science in the Public Interest has long maintained, sodas are liquid candy.   And I am on record as favoring soda taxes (see previous posts) as a strategy to discourage use, especially among young people.

But if I were in charge of Food Stamps, I would much prefer incentives: make the benefit worth twice as much when spent for fresh (or single-ingredient frozen) fruits and vegetables.

How far will the city get with this request?  I can’t wait to find out.  If you want to watch lobbying in action, keep an eye on this one, as I certainly will.

As for this proposal?

Sep 13 2010

Department of Talmudic investigation: Define candy!

Caroline Scott-Thomas of FoodNavigator.com poses a question to which I must confess I had never given a thought: What, exactly, is candy?

Why would anyone care?  The Streamlined Sales Tax Governing Board cares a lot (and so do candy companies).  The Streamlined Board is devoted to helping states figure out how to impose simpler and more uniform taxes.  It is asking for comments on its current definition, which says that candy is:

A preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. ‘Candy’ shall not include any preparation containing flour and shall require no refrigeration.

The point of this definition is to clearly distinguish candy from cookies.  Cookies contain flour.  Candies, by this definition, do not.

Here is where things get deliciously Talmudic.  The Tax Board wants to modify the definition to explain what it means by “flour”:

For purposes of the definition of candy, “flour” does not include a product that can be called “flour” under the Food and Drug Administration’s food labeling standards if the product is not grain based. If only the word “flour” is listed on the product label, it is assumed that the product contains grain based flour. However, if the word “flour” on the label is preceded by a modifier used to describe the product the “flour” was made from and the modifier is not a type of grain, then the product is not considered to contain “flour” for purposes of the definition of candy. For example, flour substitutes or products that are not made from grain but which are finely milled so that they meet the Food and Drug Administration’s definition of “flour,” such as “peanut flour” or “cocoa flour” are not “flour” for purposes of this definition.

Isn’t this fun?  Scott-Thomas points out that under this flour rule, Reese’s Peanut Butter Cups and Three Musketeers are considered candy and taxable, but Kit Kat and Milky Way, which contain flour, would be cookies and exempt.  Apparently, the Tax Board does not view this distinction as arbitrary.

If you think it is a loophole, and that Kit Kat and Milky Way are getting off tax free, or you have other thoughts about how candy tax policies should or should not work, you are welcome to submit comments by September 27.  The Streamlined Tax Board has posted instructions about how to file comments on its website.

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Jul 3 2010

Soda taxes: politics vs. public health

By analogy with cigarettes, taxes on sodas might discourage people—especially young people—from consuming sugary drinks.  This might help with weight issues.

According to a new analysis by USDA economists,

A tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent).

Soft drink companies know this all too well.  Hence, intense industry lobbying.  In the case of New York State, the lobbying succeeded.  Soda taxes are history (for now).

New York Times 7-2-10

As the New York Times explains:

Final lobbyist filings are not yet in, but estimates of the amount spent…range from $2.5 million, by Mr. Finnegan’s count, to $5 million, by the beverage industry’s count. The American Beverage Association spent $9.4 million in the first four months of the year to oppose New York’s soda tax, according to a search of public lobbying records by the New York State Healthy Eating and Physical Activity Alliance. Most of the money was spent on advertising, media and strategy.

This is a setback, but probably temporary.  Sooner or later, soda taxes will come.  Bring on the research!

Addition, July 5: Harvard researchers have just published a paper in the American Journal of Public Health showing that raising the price of sodas in a hospital cafeteria does indeed discourage sales.