Philadelphia soda tax

[Aargh]

Now that I understand that artificial sweeteners are involved, not just sugars, my previous statement was ill-informed and incorrect.

I don't even see this as social engineering. This is just a flat out cash grab disguised to look like something to benefit the health of the comunity.

The fact it was a left-wing administration that imposed the tax seems to be more of a coincidence than a left-wing plot. Both sides of the aisle are pretty skillful at making cash grabs that are sold to the public as one thing, when they are actually something quite different.

[CBB_Fan]

I am not against Pigovian/sin/externality taxes like a soda tax. However, I think they make most sense when they are tax shifts, not tax increases. Whatever revenue is gained should be used to cut sales and income taxes.

I do not consider a proper Pigovian tax an example of evil leftist overreach. Done correctly, they don't restrict action but do reduce the damage that action could cause to others. Of course, I don't consider this exact proposal to be done to my standards (not revenue neutral, and targets artificial sweeteners as well as sugar).

But a proper Pigovian tax is closer to libertarian than authoritarian leftist. It is a market focused solution that does not restrict individual property rights. Instead of taking an ideological stance against all taxes, we need to realize 3 things:

1. There will be some government spending.
2. This spending will be funded with taxes.
3. Government should use the least bad taxes it has available.

Pigovian taxes are perhaps the single best taxes (though because they should be revenue neutral, other taxes are necessary). They have a quantifiably positive social impact, and in most cases can arguably be said to aid the economy. For example, raising taxes on soda and returning the money back makes fruit juice more viable, so more seasonal workers and factory workers are hired to make juice, creating jobs and raising GDP.

In this case, soda taxes have another major tangible good. Obesity costs money. It doesn't matter whether your BMI is 15 or 45, your tax money will go to obese patients and your insurance will be be higher to help cover their costs. Obesity related healthcare costs come out to ~$780 per adult. Reducing that by even a small amount could be an economic plus even for those addicted to sugary beverages.

A soda tax shouldn't be a punishment for everyone because a few people overindulge, but rather a way to offset the cost those few overindulgers put on all of us. We are already being punished for their decisions, and a soda tax is one way to reduce that.

In case you are wondering how taxes would lowered, the best way would likely be to simply take the revenue from the tax and give it back as a rebate when income tax returns come in year 1, and then use the information on total savings to gradually lower sales and income taxes.

[WuDrWu]

A soda tax shouldn't be a punishment for everyone because a few people overindulge, but rather a way to offset the cost those few overindulgers put on all of us. We are already being punished for their decisions, and a soda tax is one way to reduce that.

Can we apply the same premise to all things bad for health? Smoking, drinking, lack of exercise for starters? If you don't activate your government monitored fitbit for 30 minutes a day, 3 times a week, boom, fine forthcoming?

Seriously though, if these things are the cause of being fat (I'm not saying they aren't) then why don't we just sell insurance based on how you live your life? Figure out perfect, then upcharge for each malady. Too tall, too short, bad genes, drink some, drink a lot, chew, smoke, dope, exercise, dangerous activities, travel etc etc.

That way you are cutting out the middle man. You don't need to tax, collect and redistribute based on non-conforming activities.

[Play Angry]

That would be another possible way of handling it, although you won't find many conservatives willing to pitch it - too many folks would shed their market-based principles in a hurry when faced with cutting off the welfare they currently receive by way of the current system.

And let's be clear - it absolutely is welfare.

[SHOCKvalue]

Let's look at the Medicare as welfare thought; as in you get out more than you put in. I don't have a dog in the fight, and I'm not an actuary or anything, but I was curious.

Some assumptions and variables:

*medicare tax is 2.9% (1.45% employee/1.45% employer, or just 2.9% if self-employed)
*assume a gross individual income that averages to $50,000 per year over lifetime, in today's money (not perfect, but I'm surely not going to make a spreadsheet for this)
*assume healthy overall economic inflation rate of 2%
*45 years of working life (20-65)

The calculation shows that based on the above an individual would put $104K into the system by retirement at 65.

Now most (all?) people on Medicare also have a supplemental insurance. I happen to have retired parents, so I know in their cases that's another couple-hundred per month, per person. Assuming 15 years of supplemental costs (65 start to (and for the purposes of conversation) death at 80), using the same 2% inflation as above, gives an additional $42K put into the system.

Wrapping this all up, do people really use roughly $150,000 in health care during the last 15 years of life? Most end of life stuff I've seen on the internet shows that the average cost for EOLC is in the like $25K to $75K range. I can't imagine that older people, in spite of their overall higher healthcare costs, are costing the system anywhere from $5500 to $9000 per year when they are otherwise in the healthy years of retirement.

I would guess that it is a minority of medicare recipients who are taxing the system at rates greater than their inputs, while the majority is propping them up. It sucks, but... well... it's insurance ultimately, and that's how insurance works - collective risk.

[Play Angry]

I think your last sentence sums it up - a single heart bypass surgery costs $80k-$200k from what I've seen, and a single valve replacement surgery costs $70k-$200k. Easy to see how a whopper or two tips the scales on the averages.

The question is - with the epidemic being undeniable and a very obvious problem, what is the best way to handle it? The left would generally advocate for increased government action, whether by taxes or otherwise, and many on the right would simply shout "nope" at all proposed action but by doing so would implicitly endorse the system of welfare currently in place (which is sure to only get worse if the trend continues).

How do we decrease obesity? Skinny liberals say tax the fats, skinny conservatives say let the market deal with it, but there are a lot of fats on both sides and they generally want the skinnies to continue to subsidize their insulin pumps and heart surgeries.

[SHOCKvalue]

I think your last sentence sums it up - a single heart bypass surgery costs $80k-$200k from what I've seen, and a single valve replacement surgery costs $70k-$200k. Easy to see how a whopper or two tips the scales on the averages.

The question is - with the epidemic being undeniable and a very obvious problem, what is the best way to handle it? The left would generally advocate for increased government action, whether by taxes or otherwise, and many on the right would simply shout "nope" at all proposed action but by doing so would implicitly endorse the system of welfare currently in place (which is sure to only get worse if the trend continues).

How do we decrease obesity? Skinny liberals say tax the fats, skinny conservatives say let the market deal with it, but there are a lot of fats on both sides and they generally want the skinnies to continue to subsidize their insulin pumps and heart surgeries.

I think possible you might be slightly over-infatuated with weight as the ultimate deciding factor of all things health. It's certainly A variable out of many, but it's definitely not THE ONLY variable.

http://www.pbs.org/newshour/rundown/seven-factors-driving-your-health-care-costs/

[Play Angry]

I think possible you might be slightly over-infatuated with weight as the ultimate deciding factor of all things health. It's certainly A variable out of many, but it's definitely not THE ONLY variable.

Nope, it definitely is not and I didn't intent to convey that message.

Mostly just a fun conversation piece because there are hordes of folks out there who would never view soaking their fellow insured or medicare contributors for 1,000+% of the average output as being a "taker" even if caused by factors largely within their own control, i.e. weight (despite massive regulatory controls putting a ceiling on their own input), but have no hesitancy at viewing other above-mean recipients of government expenditures as welfare queens, etc. Depending on circumstances, both characterizations can be quite valid IMO. When folks really get into the weeds on it, many of the excuses are nearly identical too ("they can't help it," etc.). Of course, skinny folks have heart bypass surgeries and diabetes (just less frequently), so no example is going to be perfect but correlations are the best you're gonna get on a message board.

Lots of chubby tea partiers out there whose head would explode if they had to pay 600% of their current premiums based on physical traits. Similarly, lots of fat libtards who who would hate the identical result. Neither one likes called being called a taker but they absolutely do want to continue on the current gravy train.

[WuDrWu]

I don't think most people like being called a taker....except the under class created by the government givers. But even then they'll argue they are due their benefits.

I guess I'm not sure your point. Anyone that knows me knows I fit into your hate group. Personally I'm happy to pay the surcharge for being a fatass. More than happy to in fact, as long as I don't have to pay for the smokers, dope users, sky divers, non-transfused aids carriers and alcoholics, to name just a few.

[Play Angry]

I don't think most people like being called a taker....except the under class created by the government givers. But even then they'll argue they are due their benefits.

I'm not sure what this means. We've had a lot of players come through our hoops program whose families receive/received welfare and food stamps - I don't think they generally would have liked being called takers either. I supposed some of them may have felt entitled to these benefits.

I guess I'm not sure your point. Anyone that knows me knows I fit into your hate group.

Trolling notwithstanding, I have no hate for obese folks.

Personally I'm happy to pay the surcharge for being a fatass. More than happy to in fact, as long as I don't have to pay for the smokers, dope users, sky divers, non-transfused aids carriers and alcoholics, to name just a few.

I think this is a very principled stand and commend you for it. I also think it is a micro-minority viewpoint but would love to be proven wrong.

[WuDrWu]

I'm not sure what this means. We've had a lot of players come through our hoops program whose families receive/received welfare and food stamps - I don't think they generally would have liked being called takers either. I supposed some of them may have felt entitled to these benefits.

I phrased my response poorly. I don't think anyone wants to be called a taker. There are those in difficult circumstances that are trying to not be takers and don't want to be "shamed". There are those that take and argue that they really aren't takers or that they are due the benefit anyway and there are those that take and argue that they really aren't taking (poorly informed).

Trolling notwithstanding, I have no hate for obese folks.

Honestly not trolling at all. Hyperbole. I don't think you meant one iota of negativity.

I think this is a very principled stand and commend you for it. I also think it is a micro-minority viewpoint but would love to be proven wrong.

I appreciate the commendation, but I agree...I'm afraid I'm a bit of a lone wolf in my thinking.

[Play Angry]

Honestly not trolling at all. Hyperbole. I don't think you meant one iota of negativity.

You are too nice actually. I was admitting to a bit of trolling in an attempt to spark the conversation. Some of it was probably over the top and I sincerely apologize if that was the case.

However, I do think it's a very interesting topic. I'd actually agree that sugar taxes and the like are definitely inefficient and are almost certainly not that effective given the poor fit as Royal mentioned (only hitting a tiny subset of the consumer goods "culprits").

I also think the current system is broken and the trendline for obesity (especially among kids) is both steep and bad. Other than encouraging personal responsibility, fixes are tricky and nearly all of them have controversial consequences - I really want to hear what people think the best way is to deal with that.

[CBB_Fan]

Can we apply the same premise to all things bad for health? Smoking, drinking, lack of exercise for starters? If you don't activate your government monitored fitbit for 30 minutes a day, 3 times a week, boom, fine forthcoming?

Seriously though, if these things are the cause of being fat (I'm not saying they aren't) then why don't we just sell insurance based on how you live your life? Figure out perfect, then upcharge for each malady. Too tall, too short, bad genes, drink some, drink a lot, chew, smoke, dope, exercise, dangerous activities, travel etc etc.

That way you are cutting out the middle man. You don't need to tax, collect and redistribute based on non-conforming activities.

The key isn't that it is bad for your health, it is that it costs society. The definition of an externality is a good explanation:

a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved

It isn't a fine for not being healthy, it is tax for being inefficient. In reductionist terms, say there are two competing products. Product A is sold for $1, Product B is sold for $2, but Product A has a sideaffect that costs society $2/unit to clean up.

Consumers have no reason to go against their economic self-interest and buy Product B. They don't see the hidden price tag of Product A, and maybe they won't have to pay for it at all. But if a Pigovian tax of $2/unit is applied to any product that needs a cleanup, then the economic interests of both consumer and public line up. Either the company making A will shape up, or the public will choose Product B.

Crucially, we aren't telling people "you can't do this." We aren't forcing them to do anything. We are just making the cost at purchase match the "real cost" and letting the consumers make their own decisions. And yes, this is exactly what we do with luxury taxes like those on drinking or smoking.

Does this devolve into being forced to run on a treadmill or risk a fine? No, it shouldn't. The goal of Pigovian tax isn't specifically to control activity, but to put all products on a fair playing field. Or in other words, you could also say that the status quo actively encourages products that hide their real cost, and this fixes that.

The reason this doesn't escalate to Black Mirror Season 1 - Episode 2 "Fifteen Million Merits" is that exercise isn't a market activity. You could argue it has a cost, but it isn't a product (you can't buy an exercise), and doesn't compete with one. There's no playing field to be leveled because the market doesn't exist.

[im4wsu]

Your approach of leaving it to the fats and their doctor does not work, and it costs everyone else money.

What should be done about it? Or are you a defender of limitless welfare in the form of healthcare spending for fat people at everyone else's expense? That would be a very liberal attitude.

I am definitely NOT in favor of the government telling me waht to eat/drink or how much to sleep or have sex.

If you think taxing soda is going to result in fewer obese individuals or encourage a significant number of obese people to become significantly less obese that it will have any effect on the cost of medical care for them, then I think you are in for a huge surprise. It ain't gonna happen!

[Play Angry]

I am definitely NOT in favor of the government telling me waht to eat/drink or how much to sleep or have sex.

If you think taxing soda is going to result in fewer obese individuals or encourage a significant number of obese people to become significantly less obese that it will have any effect on the cost of medical care for them, then I think you are in for a huge surprise. It ain't gonna happen!

Gotcha.

So no taxes aimed at curbing this behavior, right? I like that. But I don't like paying ~30% more for my health insurance for folks whose rates are capped by federal and state regulations to subsidize a rapidly worsening trend.

What should we do? Conform health insurance to life insurance from a rate assessment standpoint? This change involves less government (or different government, depending on your perspective) and would be less intrusive (in terms of governance; just the opposite from the medical side). Downsides, however, are many and obvious.

Or just leave it alone and let things take their due course while the gaps and rates continue to explode?