Tax policy and the obesity epidemic.

• Author: Efrat, Merav W.

1. INTRODUCTION II. THE GROWING PREVALENCE OF THE OBESITY PROBLEM IN THE UNITED STATES III. CAUSES OF OBESITY AMONG ADULTS AND CHILDREN IV. THE IMPACT AND COSTS OF OBESITY V. JUSTIFICATION FOR GOVERNMENT INTERVENTION VI. THE ADVANTAGES AND DISADVANTAGES OF OBESITY TAX VII. PUBLIC PERCEPTION AND THE OBESITY TAX VIII. TAX AS A TOOL IN ADDRESSING THE OBESITY EPIDEMIC A. Introduction B. Current Use of Tax Legislations to Reduce Consumption of Unhealthy Food C. Current Use of Tax Legislations to Increase Physical Activity IX. A REVIEW OF THE IMPACT OF TAX LEGISLATIONS ON HEALTHY EATING AND PHYSICAL ACTIVITY X. CONCLUSION I. INTRODUCTION

   Over the past forty years, the number of obese adults in the U.S. dramatically increased. (1) Similarly, obesity rates among children tripled over the past three decades. (2) The growing obesity problem in the U.S. has been attributed to an increased consumption of nutrient lacking food and beverages and a decline in physical activity. (3) Obesity has significant adverse lifelong health and social consequences. (4) Furthermore, obesity imposes dramatic economic costs, including increased direct health costs for the overweight individual, reduced earning potential, embedded costs borne by employers, increased transportation costs, and increased expenditures by government. (5) The externality of costs borne by society arising out of obesity prompted some to call for the assessment of taxes on unhealthy eating and sedentary lifestyles to shift the true costs associated to the related behavior back to individuals. (6)

   National polls suggest that Americans are generally reluctant to support tax assessment on unhealthy foods and beverages as a policy response to the obesity problem. (7) Recent public opinion polls, however, appear to have shifted noticeably with almost one quarter of the public identifying obesity as one of the top three health problems facing America today. (8) This shift in perception may have convinced more individuals to support the use of narrowly targeted tax assessments to address the issue. (9)

   In an attempt to control the medical and social costs borne by society at large incidental to the obesity epidemic, federal and state governments adopted various tax policies aimed at encouraging individuals to engage in more physical exercise and eat healthier. (10) The goal of such tax legislation is to create a climate in which engaging in unhealthy behavior becomes "less desirable, less acceptable, and less accessible." (11) Some of the more commonly adopted government tax policies to address the obesity epidemic include increasing individual consumption of healthy foods through a tax subsidy, imposing taxes on unhealthy foods and beverages, and providing tax incentives for individuals to become more physically active. (12)

   The goals of this Article are: (1) to present a comprehensive synthesis of legislative efforts throughout the country to address the obesity epidemic through the tax system; (2) to review the body of research on the efficacy of tax legislation to improve eating patterns and active lifestyle; and (3) to identify tax legislative strategies that may offer promising future pathways to address the obesity problem.

   This Article begins with a brief summary of the growing obesity epidemic in the U.S. It then explores some of the central contributing factors to the mounting obesity problem among U.S. children and adults. It also examines the adverse impact and costs associated with the obesity problem. Next, this Article discusses the justification for government intervention, as well as the benefits and disadvantages of using the tax system as a way of shaping consumption and physical activity patterns. It then summarizes recent efforts by various levels of government in the U.S. to use the tax system to affect eating and physical activity levels. Lastly, this Article reviews the research on the impact that current tax legislations have on healthy eating and physical activity. This Article concludes with suggested future research on tax legislations that may offer promising future pathways to address the problem.

2. THE GROWING PREVALENCE OF THE OBESITY PROBLEM IN THE UNITED STATES

   Obesity is a major public health issue that challenges the health care system. The prevalence of obesity significantly increased over the past three decades. (13) About one third of adults in the United States are obese. (14) The rates of obesity in the U.S. are disproportionately higher among disadvantaged groups. (15) U.S. minorities represent the highest rates of obesity and overweight individuals. (16) Also, according to an analysis by the Centers for Disease Control and Prevention ("CDC"), the highest obesity rates are found among individuals with low income and low educational attainment. (17)

   While obesity rates among adults drastically increased over the last thirty years, (18) obesity rates among children have become a growing concern, tripling to 17%. (19) Nearly one-third (31%) of youth ages 6 to 19 years old are considered overweight or at risk for becoming overweight. (20) Children with low socio-economic status have higher obesity prevalence rates. (21) Recent data from the National Health and Nutrition Examination Survey found that "low income children and adolescents are more likely to be obese than their higher income counterparts." (22) Also, children living in households where the head of household does not have a college degree are more likely to be obese than those living in households where the head of household has a college education. (23)

3. CAUSES OF OBESITY AMONG ADULTS AND CHILDREN

   The growing obesity problem in the U.S. is attributed to an increased consumption of unhealthy foods and a decline in physical activity. (24) Data suggests that the number of calories consumed by Americans rose significantly during the period of increased obesity rates. (25) The increased caloric consumption is largely attributed to an increased consumption of carbohydrates (26) and sweetened beverages. (27) Similarly, the increase in obesity in the U.S. is correlated with an increased prevalence of snacking and in the energy density of snacks consumed, particularly among children and young adults. (28)

   Some researchers link the recent increase in high-caloric-food consumption to the decline in food prices over the last century. (29) Some contend that federal infrastructure created incentives to produce highly processed, caloric dense food, which resulted in a price reduction of those food items. (30) The relative price reduction of energy-dense food items may have resulted in an increase in the amount of food consumed at each meal, as well as in the amount of food consumed between meals. (31) Aside from a reduction in relative price, increased consumption of high caloric food is also linked to a rise in the availability and accessibility of fast food restaurants, (32) as well as an increase in television viewing. (33)

   The growing obesity epidemic is also attributed to the increased sedentary nature of Americans. (34) Engaging in physical activity affects daily energy expenditure level and helps to prevent obesity. (35) Less than one quarter of American adults engage in physical activity on a regular basis, and more than half of adults pursue an almost entirely sedentary lifestyle. (36) Physical activity declines dramatically across age groups, starting in childhood and continuing into adulthood. (37) For example, 42% of children ages 6 to 11 years old meet the recommended 60 minutes per day of physical activity, but only 8% of adolescents do the same. (38) Among adults, less than 5% meet the recommended 30 minutes per day of physical activity. (39)

   The growing sedentary nature of American society is attributed to industrialization, (40) technological advancements, (41) and urban sprawl. (42) Furthermore, the increased distance of children's home from their school, as well as traffic danger along walking routes, prevents many children from walking to school. (43) Recent educational policy (i.e., No Child Left Behind, also known as "NCLB") also prevents many children from obtaining sufficient physical education instruction during the school day. (44) Under NCLB legislation, schools are held accountable for core subjects such as math, reading, and science. (45) But NCLB does not hold schools accountable for physical education. (46) Consequently, teachers and administrators focus school hours on math, reading, and science, and place less emphasis on physical education. (47) Finally, an increase in the number of dual working parent families has contributed to children's inability to participate in a variety of afterschool physical-activity programs. (48)

4. THE IMPACT AND COSTS OF OBESITY

   Obesity has a dramatic adverse impact on one's health. It serves as a major contributor to several other chronic diseases, including type II diabetes, (49) cardiovascular disease, (51) and cancer. (52) Obesity is linked to the following cancers: endometrial, postmenopausal breast, kidney, and colon:2 It is a leading cause of preventable death among adults in the United States. (53) Studies have found a large decrease in life expectancy associated with obesity. (54) Similarly, overweight and obese youths are at risk for adverse health outcomes. (55) Childhood obesity has been linked to an increased onset of type II diabetes and a higher risk for cardiovascular disease. (56) Research also suggests that the risk of new-onset asthma is higher among overweight youth. (57) Other consequences of childhood obesity include metabolic syndrome, obstructive sleep apnea, and depression. (58) Finally, researchers have found that childhood obesity continues into adulthood where the problem persists. (59)

   Being overweight also has important negative social consequences. This includes a lower likelihood that a woman will marry, (60) greater impairment at work, as well as impairment of routine daily...