Using the Cigarette Tax Playbook Against Big Food

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How might we replicate one of our great public health victories—the reduction of smoking rates—in the field of nutrition?

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Below is an approximation of this video’s audio content. To see any graphs, charts, graphics, images, and quotes to which Dr. Greger may be referring, watch the above video.

What we learned from the tobacco experience, wrote two preeminent public health scholars, is how powerfully profits can motivate, “even at the cost of millions of lives and unspeakable suffering.” “Big Tobacco Played Dirty and Millions Died.” How similar is Big Food? I’ve talked about how Big Food has used the same tobacco industry playbook. What about using the anti-tobacco playbook to counter the obesity crisis?

Tobacco is one of our great public health victories. The share of adults who smoke declined from 42 percent in 1965 down to just 15 percent by 2016. That’s about 5 out of 12 down to less than 2 out of 12. Thanks to the decline, cigarettes now only kill about a half million Americans every­­ year, whereas our diet now kills tens of thousands more. Currently, the leading cause of death in America is the American diet.

Might we be able to use the same strategies that were so successful in the battle against Big Tobacco? It may be no coincidence that three of the most cost-effective policy interventions against obesity seem to be taken straight from the tobacco wars: (1) taxes on unhealthy products; (2) front-of-pack labeling; and (3) a restriction of advertising to children.

Excise taxes on cigarettes has been cited as the single most effective weapon in slashing smoking rates. A 25 cents-per-pack tax to help deal with some of the societal costs of smoking was associated with as much as a nine percent decrease in smoking rates. The World Health Organization has estimated that a 70 percent global increase in the price could prevent up to a quarter of all tobacco-related deaths worldwide.

Extending taxes on alcohol and tobacco to foodstuffs was proposed by none other than Adam Smith in his 1776 Wealth of Nations: “Sugar, rum, and tobacco, are commodities which are nowhere necessities of life, which are become objects of almost universal consumption, and which are, therefore, extremely proper subjects of taxation.” People have the right to smoke and drink and eat fattening foods, the logic goes, but perhaps they should help defray some of the publicly-funded medical costs that result. Well, if that’s the case, why not tax obese people directly?

Taxing people based on their weight was proposed at least as far back as 1904 in the British Medical Journal, a kind of pounds-for-pounds strategy (actually only up to seven shillings and six pence per pound). This was not only to recompense public coffers, but nudge behavioral change. “A tax on fat,” read the proposal, “would also have an excellent effect on the health of the nation by bringing about a reform of unwholesome habits of eating and drinking.”

Even a penny-per-ounce tax on sugar-sweetened beverages could bring in more than a billion dollars a year in states like Texas and California. A 10 percent tax on fattening foods on a national level could yield a half a trillion dollars over 10 years. Even if it was combined with a subsidy that lowered the cost of fruits and vegetables by 10 percent, it would be expected to net hundreds of billions of dollars. But would it actually change people’s eating habits?

Even a small price differential (about 10 percent) between leaded and unleaded gas was able to shift the entire auto industry away from lead. Could it also shift Americans to apples from apple pie? A systematic review of the available evidence suggests that dietary financial incentives and disincentives work. The cheaper you make fruits and vegetables, the more people say they’d buy. And the more you tax unhealthy foods, the lower consumption drops. Based on this kind of modeling, a tax on saturated fat—found mostly in fatty meat, dairy, and junk—could potentially save thousands of lives a year.

But wouldn’t such a tax disproportionately affect the poor? Yes, in that we would expect them to benefit the most! It’s like cigarette taxes. The classic tobacco industry argument is that cigarette taxes are “unfair” and “regressive,” burdening the poor the most, to which the public health community responded, “Cancer is unfair.” Cancer disproportionately burdens the poor. So, taxes would be expected to affect the greatest health gains for the least well-off.

The fact that the tobacco industry fought tooth and nail against cigarette taxes—everything from inventing front groups to overtly buying off politicians—suggests that taxes can indeed shift consumption patterns. But much of the evidence on changing food behaviors has not been based on real-life data. You can put people through fancy 3D supermarket simulators, and discover that a 25 percent discount on fruits and veggies appears to boost produce purchasing by the same amount—up to about two pounds a week. But virtual vegetables don’t actually do you any good. Does this work out in the real world? Apparently so.

South Africa’s largest private health insurer started offering up to 25 percent cash back on healthy food purchases to hundreds of thousands of households, up to the U.S. equivalent of $799 per month. Why would they give money away? Because it apparently works—increasing consumption of fruits and vegetables and whole grains, while at the same time decreasing the consumption of foods high in added sugar, salt, and fat, including processed meats and fast food.

Why not just pay people to lose weight directly? A systematic review found that 11 out of 12 studies on financial incentives for weight loss described positive results. The one that failed to find a benefit of direct monetary inducements was only offering $2.80 a day. With kids, you can get away with just a nickel, or a sticker to get them to choose dried fruit over a cookie as an after-school snack––though as soon as the enticements ended, so did the change in behavior.

Even if the incentives have to be made permanent, they might still pay for themselves. In the U.S., every dollar spent taxing processed foods or milk might net an estimated $2 in healthcare cost savings. Every dollar spent making vegetables cheaper could net $3, and subsidizing whole grains might offer more than a thousand percent return on our investment. Even a one percent decrease in the average price of all fruits and vegetables might prevent nearly 10,000 heart attacks and strokes every year.

What about taxes, though, which tend to be less popular than subsidies? In Europe, a number of countries have instituted taxes on sugary or salty foods, but Denmark was the first to introduce a tax on saturated fat. It only took agribusiness about a year to squash it, demonstrating how weak public health professionals can be when trying to tackle corporate power. This was chalked up to the “enormous imbalance” between the political influence exerted by the public health community, compared to the industry’s lobbying might.

Please consider volunteering to help out on the site.

Motion graphics by Avo Media

Below is an approximation of this video’s audio content. To see any graphs, charts, graphics, images, and quotes to which Dr. Greger may be referring, watch the above video.

What we learned from the tobacco experience, wrote two preeminent public health scholars, is how powerfully profits can motivate, “even at the cost of millions of lives and unspeakable suffering.” “Big Tobacco Played Dirty and Millions Died.” How similar is Big Food? I’ve talked about how Big Food has used the same tobacco industry playbook. What about using the anti-tobacco playbook to counter the obesity crisis?

Tobacco is one of our great public health victories. The share of adults who smoke declined from 42 percent in 1965 down to just 15 percent by 2016. That’s about 5 out of 12 down to less than 2 out of 12. Thanks to the decline, cigarettes now only kill about a half million Americans every­­ year, whereas our diet now kills tens of thousands more. Currently, the leading cause of death in America is the American diet.

Might we be able to use the same strategies that were so successful in the battle against Big Tobacco? It may be no coincidence that three of the most cost-effective policy interventions against obesity seem to be taken straight from the tobacco wars: (1) taxes on unhealthy products; (2) front-of-pack labeling; and (3) a restriction of advertising to children.

Excise taxes on cigarettes has been cited as the single most effective weapon in slashing smoking rates. A 25 cents-per-pack tax to help deal with some of the societal costs of smoking was associated with as much as a nine percent decrease in smoking rates. The World Health Organization has estimated that a 70 percent global increase in the price could prevent up to a quarter of all tobacco-related deaths worldwide.

Extending taxes on alcohol and tobacco to foodstuffs was proposed by none other than Adam Smith in his 1776 Wealth of Nations: “Sugar, rum, and tobacco, are commodities which are nowhere necessities of life, which are become objects of almost universal consumption, and which are, therefore, extremely proper subjects of taxation.” People have the right to smoke and drink and eat fattening foods, the logic goes, but perhaps they should help defray some of the publicly-funded medical costs that result. Well, if that’s the case, why not tax obese people directly?

Taxing people based on their weight was proposed at least as far back as 1904 in the British Medical Journal, a kind of pounds-for-pounds strategy (actually only up to seven shillings and six pence per pound). This was not only to recompense public coffers, but nudge behavioral change. “A tax on fat,” read the proposal, “would also have an excellent effect on the health of the nation by bringing about a reform of unwholesome habits of eating and drinking.”

Even a penny-per-ounce tax on sugar-sweetened beverages could bring in more than a billion dollars a year in states like Texas and California. A 10 percent tax on fattening foods on a national level could yield a half a trillion dollars over 10 years. Even if it was combined with a subsidy that lowered the cost of fruits and vegetables by 10 percent, it would be expected to net hundreds of billions of dollars. But would it actually change people’s eating habits?

Even a small price differential (about 10 percent) between leaded and unleaded gas was able to shift the entire auto industry away from lead. Could it also shift Americans to apples from apple pie? A systematic review of the available evidence suggests that dietary financial incentives and disincentives work. The cheaper you make fruits and vegetables, the more people say they’d buy. And the more you tax unhealthy foods, the lower consumption drops. Based on this kind of modeling, a tax on saturated fat—found mostly in fatty meat, dairy, and junk—could potentially save thousands of lives a year.

But wouldn’t such a tax disproportionately affect the poor? Yes, in that we would expect them to benefit the most! It’s like cigarette taxes. The classic tobacco industry argument is that cigarette taxes are “unfair” and “regressive,” burdening the poor the most, to which the public health community responded, “Cancer is unfair.” Cancer disproportionately burdens the poor. So, taxes would be expected to affect the greatest health gains for the least well-off.

The fact that the tobacco industry fought tooth and nail against cigarette taxes—everything from inventing front groups to overtly buying off politicians—suggests that taxes can indeed shift consumption patterns. But much of the evidence on changing food behaviors has not been based on real-life data. You can put people through fancy 3D supermarket simulators, and discover that a 25 percent discount on fruits and veggies appears to boost produce purchasing by the same amount—up to about two pounds a week. But virtual vegetables don’t actually do you any good. Does this work out in the real world? Apparently so.

South Africa’s largest private health insurer started offering up to 25 percent cash back on healthy food purchases to hundreds of thousands of households, up to the U.S. equivalent of $799 per month. Why would they give money away? Because it apparently works—increasing consumption of fruits and vegetables and whole grains, while at the same time decreasing the consumption of foods high in added sugar, salt, and fat, including processed meats and fast food.

Why not just pay people to lose weight directly? A systematic review found that 11 out of 12 studies on financial incentives for weight loss described positive results. The one that failed to find a benefit of direct monetary inducements was only offering $2.80 a day. With kids, you can get away with just a nickel, or a sticker to get them to choose dried fruit over a cookie as an after-school snack––though as soon as the enticements ended, so did the change in behavior.

Even if the incentives have to be made permanent, they might still pay for themselves. In the U.S., every dollar spent taxing processed foods or milk might net an estimated $2 in healthcare cost savings. Every dollar spent making vegetables cheaper could net $3, and subsidizing whole grains might offer more than a thousand percent return on our investment. Even a one percent decrease in the average price of all fruits and vegetables might prevent nearly 10,000 heart attacks and strokes every year.

What about taxes, though, which tend to be less popular than subsidies? In Europe, a number of countries have instituted taxes on sugary or salty foods, but Denmark was the first to introduce a tax on saturated fat. It only took agribusiness about a year to squash it, demonstrating how weak public health professionals can be when trying to tackle corporate power. This was chalked up to the “enormous imbalance” between the political influence exerted by the public health community, compared to the industry’s lobbying might.

Please consider volunteering to help out on the site.

Motion graphics by Avo Media

Doctor's Note

The other video I mentioned is Big Food Using the Tobacco Industry Playbook

In the next video, I talk about the effects of “remedy messaging” for encouraging healthier habits. Check out How to Avoid the Boomerang Effect of Remedy Messaging.

For more on using taxes to improve health, see:

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