Would Taxing Unhealthy Foods Improve Public Health?

One of the most effective ways to decrease the harms of smoking is by increasing the cost of cigarettes through tobacco taxes. Indeed, an increase in the cost of cigarettes by only 10 percent could prevent millions of tobacco-related deaths. What about taxing unhealthy food? In general, public health decision makers have had three main options: inform through labeling, nudge with incentives, or directly intervene in markets using more heavy-handed approaches like instituting regulations or taxes.

“Policy approaches have proven crucial for other public health priorities, such as reducing tobacco use, alcohol abuse, and deaths from motor vehicle crashes.” In fact, installing air bags, for example, helped more than either “driver education alone or by labeling cars with information on crash risk.” Given that heart disease kills more than ten times more people than injuries on the road, maybe the “current epidemic of nutrition-related disease requires a similar multifaceted approach…[E]ven modest resulting dietary improvements could help reduce the burden of chronic disease significantly.” Perhaps a national system of subsidies for good foods, as well as taxes for bad ones, could “facilitate more sensible dietary choices.”

A systematic review of the available evidence suggests such taxes and subsidies would in fact work. As I show in my video at 1:30, it seems the more unhealthy foods are taxed, the more consumption drops. Likewise, the more healthy foods like fruits and vegetables are subsidized and their prices drop, the more consumption increases. A small price difference between leaded and unleaded gasoline, for example, succeeded in decreasing our exposure to lead. What about a tax to decrease our exposure to saturated fat? As you can see from the data at 1:52 in my video, such a tax could potentially save thousands of lives.

Wouldn’t such a tax disproportionally affect the poor, though? Yes, it would benefit them the most—just like cigarette taxes. The classic tobacco industry argument is that cigarette taxes are “unfair” and “regressive,” burdening the poor the most. The public health community’s response? “Cancer is unfair” and “[c]ancer is regressive,” disproportionately burdening the poor such that a cigarette tax could result in the greatest health gains for the least well-off. The so-called Committee Against Unfair Taxes was actually just a front, “organised and funded by the tobacco industry,” one front group among many, as you can see at 2:42 in my video. This is a common tactic used by the industry to hide its role in fighting tobacco taxes, in addition to trying to overtly buy off politicians. The fact that the industry fights tooth and nail suggests that tobacco taxes can indeed affect consumption. Much of the data on food taxes and subsidies, however, have been based on models or “stated preferences” to hypothetical scenarios where people merely say they’d change consumption patterns based on prices. There hasn’t been as much real world data.

Researchers have put people through high-tech, 3D supermarket simulators, which you can see depicted at 3:15 in my video, and found that a 25 percent discount on fruits and vegetables appears to boost produce purchases by 25 percent. That’s nearly two pounds a week, but virtual fruits and veggies don’t do you any good. Does this work out in the real world? Yes. In fact, South Africa’s largest health insurance company started offering up to 25 percent cash back on healthy food purchases to hundreds of thousands of households—up to $500 USD a month. Why would the insurance company do that? Why give money away? Because it works. The healthy food cash-back program was associated with an increase in the consumption of fruits, vegetables, and whole grains, as well as a decrease in foods high in added sugar, salt, and fat, including processed meats and fast food.

Subsidies are more common than taxes, though, in Europe, where a number of countries have instituted taxes on foods that are sugary or salty. Denmark was the first to introduce a tax on saturated fat, such as meat, dairy, and eggs, but it only took the food industry about a year to squash it, demonstrating that “public health advocates are weak in tackling the issues of corporate power.”

There’s “an enormous imbalance” between the influence exerted by public health professionals compared to the political might of the food industry. It brings to mind the fight over proposed “traffic light labelling” on food in the European Union. Apparently, it was much too easy to understand, simple and straightforward, so the industry lost its mind and spent more than $1.4 billion USD killing it in favor of the confusing “daily amount” labeling guidelines that require a “bring-your-calculator-to-the-grocery-store” approach to make grocery shopping as confusing as possible, as you can see at 4:51 in my video.

Denmark ended up canceling the fat tax and shelving their sugar tax because the farming and food company interests claimed too many jobs would be lost if people ate healthier. Apparently, a healthy economy was more important than a healthy population. Ironically, it was abolished just when evidence of its effects started to appear. Researchers “conclude[d] that the introduction of the saturated fat tax contributed to reducing the intake of saturated fat among Danish consumers” from some meat and dairy products—but not from sour cream, though. The public ate so much more low-fat sour cream that it outweighed the smaller reduction in consumption of high-fat sour cream.

Indeed, we always have to think about the unintended consequences. Swapping out sugary cookies for salty chips, for example, might not do the public’s health many favors. One field study of a tax on soda found that it may drop soft drink purchases, at least in the short term, but households may just end up buying more beer.

In health,

Michael Greger, M.D.

PS: If you haven’t yet, you can subscribe to my free videos here and watch my live, year-in-review presentations—2015: Food as Medicine: Preventing and Treating the Most Dreaded Diseases with Diet, and my latest, 2016: How Not to Die: The Role of Diet in Preventing, Arresting, and Reversing Our Top 15 Killers.

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50 comments

Jack Y
Jack Y23 days ago

thanks

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Jack Y
Jack Y23 days ago

thanks

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John J
John J23 days ago

thanks for sharing

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John J
John J23 days ago

thanks for sharing

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Val P
Val P2 months ago

interesting

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Caitlin L
Caitlin L3 months ago

Thank you for sharing

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Rita Delfing
Rita Delfing3 months ago

Not a bad idea really in Canada we pay gst on junk food where we don't pay any tax on food as it should be. I think it would be valuable to lower the cost of fruits and veggies as well. What about the frozen food section, I don't buy much there but sometimes when looking I am amazed at the amount of options, the amount of salt is out of control in those products maybe they should be taxed too?

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Dorre R
Dorre R3 months ago

Very sensible! Taxing unhealthy activities and pollution and using the proceeds for public benefit (such as reductions in other taxes) is a win-win situation. We win in terms of reduced health insurance if it encourages healthy activities, and we win because of the reductions in other taxes if it doesn't!

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Louise R
Past Member 3 months ago

thank you

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Diane Wayne
Past Member 3 months ago

why doesn't the government make it a law that only healthy foods be produced? Time for change, don't ya think?

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