05 November, 2009

Obesity epidemic as national security threat (Spencer bait II)

Over at the Atlantic Business Channel, Derek Thompson lists three reasons why skeptics should support a soda tax:

1) The Sin Reason
Sugary beverages account for up to 15 percent of the calories consumed by children, according to the New England Journal of Medicine. The authors wrote that "sugar-sweetened beverages ... may be the single largest driver of the obesity epidemic."

2) The Market Reason
There's a simple reason why sugary drinks and junk food are contributing to the country's obesity epidemic. They're very, very cheap... Raising the price of sodas, which plummeted relative to overall inflation in the last 30 years, strikes me as a responsible way to incent consumers to make healthier choices.

3) The Deficit Reason
But let's say it doesn't change anybody's eating preferences. Let's say Americans keep paying a couple cents more for the same amount of Pepsi. Well then fine, I say, at least they're helping to pay down the federal deficit. I hear the argument that a sales tax on soda (or alcohol) would be regressive, taking a larger percentage of poorer people's income and striking at the less fortunate demographic that is more likely to buy lots of soda in the first place. But health care reform would use those billions of dollars -- a 3 cent tax per 12-ounce serving could generate $24 billion in four years -- to pay for Medicaid and health care subsidies for less fortunate Americans, anyway.

I should say that out of those, I find (3) to be most persuasive. Thompson makes the under-appreciated point that those of us who want to see more aggressive spending on progressive social investments should be concerned less with the progressivity of any particular tax and more with the progressivity of the public sector as a whole. That means if the only way to eventually pay for, say, a single payer health system is through more consumption-side taxes, then liberals should take that deal. This broadly describes the equilibrium in many European countries, where very progressive public sectors are financed by regressive VATs.

But that point is really just an incidental set-up to the real point of this post which is an all-important 4th reason to support a soda tax:

The latest Army statistics show a stunning 75 percent of military-age youth are ineligible to join the military because they are overweight, can't pass entrance exams, have dropped out of high school or had run-ins with the law.

So many young people between the prime recruiting ages of 17 and 24 cannot meet minimum standards that a group of retired military leaders is calling for more investment in early childhood education to combat the insidious effects of junk food and inadequate education."We've never had this problem of young people being obese like we have today," said Gen. John Shalikashvili, former chairman of the Joint Chiefs of Staff.

Fighting obesity isn't just about diabetes and the ability to wear sporty, slim cut attire any more. It has become critical to our very national security.

1 comment:

spencer said...

Bait successful. But you have to admit these are not particularly compelling justifications. I'll make some vague arguments against them and then you guys can have your way with me.

"The Sin Reason" is the standard argument that people drink too much soda. Okay, fine. But the extent to which this is true is an empirical question and I haven't seen any solid evidence one way or the other. I'm guessing there isn't much. Not that it's not true--but policy should be evidence-based.

I also haven't seen people being very careful about what "too much" means in this context. The simple fact that "[s]ugary beverages account for up to 15 percent of the calories consumed by children" is NOT by itself an argument that children consume "too much" soda. You need to have some clear idea of what "too much" means. Obesity can be rational and/or efficient.

"The Market Reason" doesn't actually seem to be a separate reason at all. It's basically just a restatement of the first reason.

"The Deficit Reason" doesn't help much either. First of all, $6 billion a year is hardly anything relative to the 2009 deficit, which will be something like $1.5 trillion.

Second, I would argue that the deficit reason doesn't mean anything unless you already accept the sin reason. Yes, if people DO consume too much soda then it's a win-win: you get people to drink less soda and you also raise revenue. But you did not need the deficit argument to justify the tax--the sin argument has already justified it.

On the other hand, if people do NOT consume too much soda, then the soda tax should be subject to the same analysis as a tax on any commodity. Which is to say that a broad-based consumption tax like a VAT can raise the same amount of revenue at a lower efficiency cost. The deficit reason has no force in this case.

So the deficit argument doesn't actually buy you any justificatory power over the sin argument.