Posted on 08/20/2009 1:18:21 PM PDT by swarthyguy
ECONOMISTS have long recognised the arguments for imposing special taxes on goods and services whose prices do not reflect the true social cost of their consumption. Such taxes are known as “Pigouvian” after Arthur Pigou, a 20th-century English economist. Environmental taxes are an obvious example. There is also a Pigouvian case for duties on cigarettes, alcohol and gambling. Smoking increases the risk of cancer for those in the vicinity of the smoker; alcohol abuse and gambling are strongly associated with violence and family breakdown. Moreover, all three habits lead to higher medical costs. In theory governments can make up these costs, or “externalities”, with a tax that adjusts the prices people pay to puff, booze or punt. Such a tax might also encourage consumers to live healthier lives.
Support for another such tax, on junk food, is now spreading, especially in America. Congress is considering a tax on sugary drinks to help pay for the planned expansion of health-care coverage. Some analysts would like to see broader duties on junk food. On July 27th the Urban Institute, a think-tank in Washington, DC, proposed a 10% tax on “fattening food of little nutritional value” that, it claimed, would raise $500 billion over ten years.
The logic for a tax on fattening food may seem obvious. About one-third of Americans are obese, up from 15% in 1980. Fat people are more prone to heart disease, diabetes, bone disorders and cancer. An obese person’s annual medical costs are more than $700 greater than those of a comparable thin person. The total medical costs of obesity surpass $200 billion a year in America, which is higher than the bill for smoking. These costs are not all borne by the obese. When health-care costs are shared, obesity becomes a burden for everyone. Thanks to government health-care plans such as Medicare half of America’s obesity-related health costs land on taxpayers. In private employer-sponsored health plans the slim pay similar premiums to the overweight.
But would a fat tax affect behaviour? Numerous studies have shown a relationship between the price of food, especially junk food, and body weight. As fast food has become relatively cheaper, so people have become fatter. A new paper* from the RAND Corporation, another think-tank, suggests that taxing calories could have a sizeable, if gradual, effect on people’s weight. The authors of the study look at changes in the weight and height of a large group of Americans aged over 50 between 1992 and 2004. They then calculate food-price indices that are skewed towards calorie-dense foods (so a change in the price of butter has more impact than a change in the price of vegetables). By controlling for individual and environmental influences on weight, such as income and health, they then measure whether food-price changes affect body-mass index (BMI). BMI, the ratio of weight in kilograms to the square of height in metres, is a common, if imperfect, gauge of whether someone is over- or underweight.
A person’s BMI turns out to be hard to shift in the short term. A 10% increase in the calorie-heavy price index is associated with a small decline, of 0.22, in BMI within two years. But the effects are greater over the longer term. A 10% increase in the price of calories results in a fall in BMI of one to two points over 20 to 30 years. Such a drop would eliminate about half of the observed increase in obesity in America since 1980.
Even so, the idea of tackling obesity via the tax system has some serious flaws. First, there is the question of what to tax. Sugary drinks may not be nutritious, but hamburgers contain some protein along with their fat. More important, junk food is not itself the source of the externality—the medical costs that arise from obesity. Unlike smoking, or excessive gambling and drinking, eating junk food does not directly impair the well-being of anyone else. And because obesity is determined by lack of exercise as well as calorie intake, its ultimate relationship with health costs is more tenuous than that of, say, smoking. It is possible to eat a lot of fatty food, exercise frequently and not generate any externalities. A more direct, though controversial, approach would simply be to tax people on the basis of their weight.
Fat chance The distance between junk food and the medical costs of obesity means that a calorie tax could have unintended consequences. A new theoretical paper in the Journal of Public Economics even suggests that a tax on junk food could increase obesity, especially among physically active people. If junk food, which is quick and easy to obtain, becomes relatively dearer, people will spend more time shopping for fresh ingredients and preparing food at home. That could leave less time for exercise.
Even if perverse consequences of this type look improbable, a junk-food tax may have less impact than its advocates expect. New studies on the effect of cigarette and alcohol sin taxes suggest heavy users are less influenced by price changes than others. An analysis of data from the National Longitudinal Study of Adolescent Health shows that American teenagers who smoke more than five cigarettes a day are only one-third as responsive to cigarette prices as lighter smokers. A complementary study of data from America’s Health and Retirement Survey shows that alcohol taxes are far less effective for the large minority of heavy drinkers. The biggest consumers of fattening food may prove similarly resilient to price increases, so a fat tax may do little to improve health, at least for today’s junk-food addicts. If these same consumers are poorer on average, it would also be regressive. One reason for this is that in some poorer neighbourhoods there may be little fresh food on sale. If junk is all there is, putting up its price will reduce real incomes and make little difference to eating habits and health. Like the foods they aim at, fat taxes look appetising but can have nasty effects.
I bet you’re the president of a home owners association too.
if not you certainly are qualified.
Detroit likely ran the big stores out. Like they did anyone able to afford anything larger than a shack. I doubt their using many lots to grow food without armed guards.
There was another article today that said the average house in Detroit sells for around $11,500.
I think I might be able to convince my HO to allow refrigerator inspections of houses where fat kids and people live. Spot inspections at midnight, for instance.
If I hook up their cars GPS’s to the web, I’ll even be able to monitor when they hit fast food joints and fine them for violating HO laws.
Thanks.
That average includes the thousands and thousands of abandoned homes. A part of Detroit the size of San Francisco is pretty much a ghost town governed by gangs and addicts.
There was a website with photo’s of a bunch of them, called 100abandonedhouses.com? I dunno
“houses where fat kids and people live.”
You could put them in squirrel cages and generate electricity while reducing their waistline. two birds with one stone./s
If your over 65 or 70 and there is no cure for what ails you, they will pay for hospace or the suicide pills. Just remember to stop by FR anbd say bye.
/sarc (I hope to Obama’s partner its sarc)
For the last 5 to 10 years Toledo's nickname has been "Little Detroit". It used to be a nice city but it's been run by Dems too.
The treadmills of America are a wasted resource.
See, I knew American ingenuity would solve our “crisis” du jour.
After your EarthFriendlyPowerQuota is exhausted for the day, and you wanna see the end of the movie, start treading.
you might have to start feeding Tink some< cough> acorns
I confess, I laughed out loud!
I haven’t seen any in this neck of the woods...besides, there are things even Tink won’t eat. :-D
And I DO mean “Things.”
http://www.detnews.com/article/20090402/METRO08/904020395/To+urban+hunter++next+meal+is+scampering+by
lol, mystery meat, SPAM
I rescued and performed intervention on a poor Yorkshire Terrier whose mom had decided to make the poor thing subsist on a veggie diet.
You should be reported to the ASPCA, I said, and proceeded to enter her abode with wine for her and ribs and such for the pup.
Soon, he was barking again and his diarrhea and associated weakness and lethargy were gone, poor guy had been surviving on broccoli and tofu pieces.
What dreadful person would feed a dog anything but meat? Nevertheless, a mastiff will eat darn near anything. Broccoli gives them (gag) very bad gas. I have no idea what tofu would do, as there has never been any in my house.
But he will likely not an “acorn.” Might play with it, mess it up some...;-D
Our dog loves carrots. I can see number of ways in which these are good for him and since a vet concurs, I don't think we are dreadful people.
Mastiffs will truly eat nearly anything. I keep him away from most fruit, as grapes (and raisins) are poisonous to dogs. He eats a bite or two of grass in the yard.
But when he is fed, twice a day, it's meat.
When they are puppies, they will eat gravel/small rocks, so you have to watch out for that.
Honestly, this was a joke, at least it started out that way. When did we get so serious about the diet of dogs? As I said, he likes cheap burgers. Once a month or so, he gets them for treats.
Honestly, look what trouble your joke has got me into! Some days, you’re the dog, some days you’re the hydrant. I guess this is a hydrant day for me. *sigh*
Smokers pay less than non-smokers cradle to grave; alcoholics also are questionable in their net burden as many have to be dragged into a doctor’s office or rehab; gamblers rarely have effects on society generally except for those who build rackets based on the activity; the obese are simply those who eat too much for whatever reason and can’t be fitted into a niche among the pantheon beyond cultural traditions related to traditional celebrations or family influences.
In short, taxes are a poor form of behavior modification and motives of the modifiers are made highly suspect by this ongoing rearranging of targets.
What makes schemes such as this attractive is the notion that good ideas deserve funding and every tyrant knows that to make it work it must be mandatory; since no one has to smoke or drink booze or gamble but everyone has to eat, a tax on food will guarantee funding regardless of the outcomes.
Now comes the hard part and that is selling the idea that such a tax on a need is really only a tax on excess so look for exemptions for certain foods in the beginning with escalating taxes and broader coverage for those items taxed as the movement gathers steam.
You’d think that after being shafted so many times that more people would quit bending over to pick up the pieces.
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