Friday, October 07, 2005

Jacob Sullum on Cigarette and Fast Food Taxes: "The Tyranny of Public Health"

At a September 28 talk in Toronto sponsored by the Montreal Economic Institute, entitled "Tobacco Today, Fast Food Tomorrow? The Tyranny of Public Health," Jacob Sullum, senior editor of Reason magazine, compellingly raises questions about the use of the argument that government policies, such as those which raise taxes on cigarettes, can be justified on the grounds that these individual behaviors increase societal health care expenditures and that the policies create inventives for individuals to change their behavior.

Sullum asserts (I think quite correctly) that two of the primary justifications used by anti-tobacco advocates in promoting cigarette taxation as a public health policy is that smokers produce higher health care costs, both for the government and for other taxpayers, because of the health impact of their personal choice to smoke and that increased taxes will encourage these smokers to quit. This same justification is also used by some anti-smoking advocates to justify their support for workplace policies that make not smoking a condition for employment (see any number of posts on this blog to see this).

But as Sullum then notes, the same argument can and is being used to support taxing fatty foods or more directly, taxing people who are overweight. As Sullum points out:

"A 2003 study in the journal Health Affairs estimated that the health care costs associated with excessive weight amount to something like $93 billion a year in the U.S., half of it covered by Medicare and Medicaid. 'If people want to be 200 pounds,' said the study’s lead author, Eric Finkelstein, 'then that’s their choice. But ultimately, if the taxpayer is paying for those choices...that is where the justification for government involvement comes from.'"

Sullum notes that in 1994, R.J. Reynolds took out an ad critical of proposals to increase cigarette taxes, asking: "Today it's cigarettes. Will high-fat foods be next?" While many anti-smoking advocates simply dismissed that argument by claiming it was frivolous, it only took six months until an op-ed in the New York Times (see: Brownell K. Get slim with higher taxes, December 15, 1994) proposed the idea of a tax on fatty foods.

Sullum asks us to think about using the desire to reimburse health spending or to encourage altered behavior as a justification for smoker taxation and restrictive employment policies by extrapolating from this argument to the obesity issue. He asks: "Instead of taxing ice cream and cheeseburgers, which are consumed by the thin as well as the fat, why not tax people for each pound over their ideal weight? That would impose a fee proportionate to the burden they are imposing on taxpayers, and it would create a direct incentive to lose weight."

The logic of the argument is appealing: if one finds the idea of taxing fatty foods or taxing people for being overweight to be repellent, then doesn't that also bring into serious question the validity of the justification for using a sin tax (or restrictive employment policies) on smoking to reimburse excessive health care spending or to incentivize smokers to change their behavior?

Sullum doesn't leave it there. After all, the same logic can be extended to almost any personal behavior choice that leads to increased health care spending: "The argument that people covered by government-funded health care have a duty to keep fit also proves too much in the sense that it can be extended to anything that carries a risk of disease or injury. If eating and exercise are legitimate targets of regulation, so are sex, hard work, sleep, stress, dental hygiene, and a wide range of recreational activities. Here taxpayer protection converges with public health protection, if public health is understood as the combined health of the collective."

The Rest of the Story

Is there any way we can wiggle out of this predicament, outside of relying upon a different justification for increased cigarette taxes and restrictive employment policies (i.e., different than the need to recover health care/taxpayer expenditures or the desire to incentivize smokers to change their behavior)?

The first possible way to escape would be to argue that the idea of taxing people who are overweight, taxing fatty foods, or taxing people who do not get enough exercise, etc. is not abhorrent after all.

I think this argument can be easily dismissed as being unreasonable and repulsive. I don't for a minute think that government should get into the business of taxing people who are overweight, do not get enough exercise, etc. And the same distaste for such an approach also applies, you will note, to restrictive employment policies. Certainly, I find abhorrent, for example, an employment policy that would refuse to hire obese people for reasons not directly related to job performance.

A second possible way to escape would be to argue that while people can easily make a decision to stop smoking, they cannot so easily reduce their weight or change other aspects of their behavior - and so that's why it is acceptable to tax cigarettes and not hire smokers while it is unacceptable to tax and not hire people who are obese or do not exercise.

This argument, however, is not supported by the facts. If anything, the addiction of nicotine is far stronger than any possible compulsive pull that behavior like eating fatty foods or not getting exercise has. And while losing weight can certainly be difficult, it is not impossible. Quitting smoking is perhaps the most difficult change in behavior to make: all one needs to do is consider the fact that a huge percentage of smokers who undergo lung cancer surgery continue to smoke after their surgery.

A third possible escape would be to argue that the health and economic impacts of smoking so far outweigh the impacts of other behaviors that taxation and discriminatory employment practices are justified for this single behavior.

Unfortunately, this doesn't seem to be supported by the facts either. The health care costs of obesity, according to a recent article, may actually exceed those of smoking.

The fourth, and last possible escape I can think of, is to argue that smoking per se is not being taxed, but that it is a tangible product that is - cigarettes. In most of the other examples of taxing a behavior, there is no tangible consumer product that is being taxed directly. The only exception is fatty foods, but one could argue that since fatty foods are not directly and inevitably tied to obesity or disease, taxation of fatty foods makes no sense anyway.

Before addressing this argument, I will first note that regardless of its potential validity, it does not provide a justification for employment policies that fire or refuse to hire smokers. Because in those cases, it is truly the behavior, not the sale of the tangible consumer product, that is being regulated.

As far as the validity of the argument, it seems to have some promise since none of the other behaviors (with the exception of fatty foods) does indeed represent an actual consumer product whose sale is being regulated and taxed, rather than whose potential outcome is being regulated or taxed. Is there any other legal consumer product on the market that directly and inevitably causes health damage and increases the risk of disease? There are certainly other consumer products that are dangerous, but I'm not sure I can think of any that inevitably lead to some health damage. For example, even smoking a small number of cigarettes can be shown to produce meaningful and measurable deteriorations of pulmonary and cardiovascular function.

I think, then, that the argument does have some validity and that it could potentially provide at least some rationale for why a sin tax on cigarettes might seem palatable while a similar tax on other personal behaviors that may have severe impact on health care costs does not.

However, I think that two points deserve emphasis here.

First, it is not clear to me that most anti-smoking advocates are using this argument as the justification for their proposed tax policies. Even if this escape does avoid the problems of the slippery slope argument, you have to invoke the argument, I think, to garner some protection from it. If anti-smoking advocates want to continue to single out cigarettes as the only consumer product that they feel is deserving of ever increasing taxation in order to recover health care costs and encourage people to change a health-related behavior, then they need to admit that and explain why they are putting cigarettes in a category of its own.

But along with that comes an obligation - and that obligation is to not then go ahead and treat other behaviors or products in the same category as cigarettes. So when tobacco control advocates proceed to support litigation based on damages caused by fast food companies, it completely undermines the cigarette taxation justification because it reveals that those advocates do not indeed view cigarettes as being in a category by themselves.

Ironically, I think that by trying to extend the rationale for taxing cigarettes and holding cigarette companies responsible for damages to other products and other companies (i.e., fast food companies), public health advocates (and especially tobacco control practitioners) decimate their own argument for increasing cigarette taxes. And since these lawsuits have apparently not been successful and I don't think fatty food taxes are going to see the light of day, these advocates are, I think, actually killing two birds with one stone. They're not advancing any meaningful social policy regarding the problem of obesity, yet they're destroying any possible justification for any increased taxation of cigarettes.

So basically (and based on my observations of what is going on in public health today), I think that Jacob Sullum's argument holds up. It certainly holds up completely with regards to employment policies regarding off-the-job smoking. And while there is a slight crack in the argument that might otherwise allow public health advocates to rationalize why smoking is to be treated uniquely, by virtue of the broad recent focus on treating obesity in the same way as smoking is being treated, that crack has essentially been sealed over. The fact that it has been, in some cases, anti-smoking advocates themselves who have sealed over the crack I think makes it that much more difficult to scrape out the cement from the fissure.

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