A few weeks back, I discussed proposals to reduce obesity by taxing junk food.  I argued that such a tax could encourage healthier eating but would be difficult to design and would hit low-income families the hardest.  Now a new report by the University of Virginia’s Carolyn Engelhard and Arthur Garson and the Urban Institute’s Stan Dorn addresses some of these issues.

The report, which I saw in draft form, argues that with the U.S. obesity rate poised to hit 40 percent within ten years, policymakers should turn to strategies from the anti-smoking playbook – strategies that helped cut smoking rates in half since the 1960s.  In particular, the report’s authors argue that a well-designed tax on fattening foods could reduce obesity, especially if accompanied by campaigns to raise consumer awareness and subsidies on healthier alternatives. 

The potential benefits from reducing obesity are, well, enormous.  Obesity is linked to over twenty chronic diseases, from diabetes to colon cancer, and spending on obesity-related healthcare adds up to $200 billion in the U.S. each year.  A successful tax could raise revenue to subsidize the consumption of healthier foods, offset the burden of the tax for poor families, or help to pay for healthcare reform and insurance coverage.

Whether the tax could achieve these goals, however, hinges on a number of design choices.  For example, would the tax be levied on producers or consumers?  Would restaurants be exempt?  If not, how would we determine the nutritional value of every item on every restaurant’s menu?  Additionally, a successful tax would have to balance the goals of achieving health benefits and raising revenue; the more that people switch to healthier foods, the less revenue the tax collects.  And as everyone knows, the worst way to combat obesity is trying to have your cake and eat it too.

The report comes out Monday; a panel of experts will discuss it and related issues in Ousting Obesity: Strategies from the Tobacco Wars, starting at noon on Tuesday, July 28, at the Urban Institute. Click here to RSVP to attend in person or to listen to the webcast.

I’ll have more to say about the report once I’ve seen the final version.  Stay tuned.