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VIDEOThe Fast-Food Intervention
Government tries to save us from ourselves.
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The government can’t bring everyone to counseling for obesity, so it may use the only arrow in its quiver able to shape habits: taxes. The Senate Finance Committee held a session last week to hear different proposals from experts on how to finance President Obama’s proposed health-care plan. One of the proposals was a federal excise tax -- much like the one for cigarettes -- on soda, as well as energy and sports drinks and sweetened tea drinks. (Diet Coke fiends can breathe easy since diet sodas would be exempt.)
Naturally, fast-food companies, like McDonald’s (MCD) or Pepsi (PEP), oppose the measure, saying it would unfairly target low-income Americans. This argument is accurate -- there isn’t a Whole Foods (WFMI) on Eight Mile -- as America is one of the few developed countries where one must be wealthy to access or buy organic food. Still, this doesn’t offer a solution to the serious problem.
There's general agreement among researchers that liquid calories are a bigger health risk than those that come from solid foods. The costs of obesity are stratospheric, and in our health-care system, that means healthy Americans, a minority these days, pay for this perverse behavior.
The federal soda tax might only be a tax of $0.03 per 12-ounce drink, which would generate about $24 billion over the next 4 years. It's a pittance of the $1 trillion-plus estimated price tag of the health-care plan, but advocates consider it a long overdue measure. Sugary drinks contribute to obesity, diabetes and other health problems, and a dozen states already tax sweetened drinks.
New York recently backed off a proposal to levy an 18% tax on sugary drinks, despite support from health experts. The tax reportedly could have reduced consumption by more than 10% and raised $1.2 billion a year in the state.
A soda tax has been the only economic shot fired so far, but officials have instituted other measures, hoping to thwart Americans’ eating habits. New York City requires restaurant chains to post calorie counts on their menu boards, and California, Massachusetts and Philadelphia are set to follow. Massachusetts struck right at the heart of fast-food chains when it extended the rules to drive-through lanes, which are exempted in California.
The issue is how effective posting calorie counts will be in pushing people to make healthier choices, and the same will go for a soda tax. I imagine calorie counts are mumbo jumbo to a lot people who look at the menu to order a Big Mac with large fries and Coke (1,350 calories). It wouldn’t seem to take much curiosity to realize that can’t be good for you, and certainly not in any frequency.
Already, two-thirds of US adults are overweight, according to the Centers for Disease Control and Prevention. An intervention by our friend, the government, may require something stiffer than a minor tax and a nudge.
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