Unhealthful News 178 – Why is it never a subsidy for healthy behavior?

The battles over financially penalizing people for unhealthy behaviors seem to be increasing well beyond historical levels.  After the triumphs there in the area of tobacco, which continue to amplify also, the battle has ramped up to punish people for soda, alcohol, and other unhealthy foods, and even to impose fines on recipients of public health care if they are overweight, and like tobacco, this has begun to include private lawsuits.  (Important note to those of you reading too fast:  Notice that the antecedent was punishing people for their behaviors, and thus “triumphs” refers to increases in punishing people, a triumph in the minds of people who think that is a good thing.  I am most certainly not suggesting these are triumphs from the perspective of public health or any other humanitarian interest.)

Last week a data mining exercise revealed that consumption of fried potato products independently predicts more weight gain than does soda consumption.  (Notice the phrasing there:  Those foods are predictors of weight gain, not necessarily the cause, even though some other exposures are “controlled for” to some extent.  Also, the simplistic analysis does provide useful quantification even though quantities were reported in the press by people who did not even understand that they do not understand what the study results meant.)  In response, the LA Times half-joked about imposing a potato tax, to mirror the proposed soda taxes.  It is pretty clear that if one is justified, then so is the other – both of these foods are a combination of energy (calories) and entertainment, with little other benefit.  A parent would be wise to discourage young children from consuming them, as yummy as they are.

But what should we think about the government doing so?

Much has been said, but something occurred to me that is absent from that debate:  No one ever suggests making such taxes revenue neutral, and there is almost no talk of using subsidies instead.  There are plenty of arguments to be made that government has no business doing this at all, of course.  But to test the honesty of the claims made in support of the taxes – “it is good for society”, “it will save healthcare money” – it would be interesting to see if supporters were so excited if these proposals were not profitable.

Some would still be adamant supporters, of course.  This includes some people who genuinely care about people, understand welfare economics, and genuinely believe that people make non-welfare-maximizing decisions – i.e., not in their own best interests, based on their own preferences – and so want to assist them in making better (as defined by their own preferences) choices.  But this is a tiny minority of the supporters.  Most government officials who buy into these schemes seem to be most interested in the promise of more money.  Would they be on-board if it were just about supposedly helping people?  And of course, there are the “health promotionistas” who believe they know best about what is best for people, and are willing to punish the people into conforming to their god-given knowledge.  Putting them to the test is a little more difficult, but it could be done.

To take away the government coffers incentive, it is just necessary to make the policy spend at least as much as it takes in.  It may not be trivial to figure out ways to spend money in the same direction as the taxes since, for example, we cannot subsidize tap water, already approximately free, as an alternative to penalizing soda.  But the taxes are not exactly trivial either, so it is not all that much harder.  (E.g., for a soda tax there are dozens unintended consequences and major complications like:  Are they really going to ban free refills, and if not, how can they tax by unit volume? Are they going to forbid raising the prices of all non-taxed drinks to keep them all the same, as most every restaurant will prefer to do?  Will clerks be required to police self-serve soda fountains to make sure someone is not evading the tax by lying about their soda being diet?)

Figuring out how to offer a subsidy for healthy foods might have to be a bit oblique compared to the soda or potato tax, like requiring that all of the tax revenue be given to grocery stores in proportion to how much broccoli they sell.  But the main point is to ensure that those pushing for the taxes are all really motivated by the incentive effects of the price increase and not just wanting to skim some money for themselves.  You have to figure that this is the real motive of governments; supporters in New York practically said as much.  So let them prove they really are supporting these proposals for their public health benefits.  Indeed, governments should even be required to kick in a bit more, to lose a bit of money from the policy, something they should be happy to do if they are really motivated by the wondrous predicted healthcare savings. 

This has the added benefit that government will not become dependent on the revenues, like they have with cigarettes.  Efforts to prevent tobacco harm reduction are inspired, in no small part, by the governments and activists who do not want to lose their cigarette tax gravy train.  Yes, the broccoli lobby might try to keep people drinking soda to keep up their subsidy flowng, but if we spread the subsidy widely enough, no one will be in a position to want to make sure the behavior does not abate because they are now profiting from that market.

That brings us to the outside activists.  You can be sure that anti-obesity (etc.) busybodies and their pet researchers are drooling at the prospect of getting their very own Legacy-like boondoggle of money.  It will not be as big as the cigarette tax payoff, but it will still support all manner of useless activity for many useless people for the rest of their careers.  So we should absolutely take it away from them by requiring the revenue be spent in a way that does not benefit them.  In fact, we can make them pay for this.  If they are so excited about incentives,  let them experience some.  The rule could be that major policy initiative that is onerous to people, like a soda tax, but will supposedly will reduce the health budget by x% should come with an automatic x% reduction in population research, advocacy, education, etc. funds for health promotion.  After all, with that much of the problem solved, not as much money will be needed.  Perhaps that would encourage a bit more honesty in these over-the-top predictions that never come true (they are generally off by approximately 90% of the predicted benefits), as well as some priority settings.

After all, we cannot let these people continue to gorge themselves on whatever they want without facing some repercussions.  The expenses they impose on the rest of us are simply unfair.

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