Posted by: audreybenenati | February 11, 2010

Why We Should Tax Unhealthy Items

Cortland Standard

February 11, 2010


Can there be a way to help New Yorkers to live healthier lives and help our state government raise revenue and reduce the hefty price tag of health care? Governor Paterson is proposing a way to do it by increasing the excise tax on cigarettes and introducing a new tax on sugar-sweetened beverages. Many of us tend to cringe when we hear the word “tax.” Very few words stir more emotions than taxes. As much as we hate to admit it, there are good reasons for paying taxes such as schools, roads, and other vital services.

Never before has the state been so short of cash, had such large deficits and been faced with insufficient resources to pay for various services such as health care. To help mend this crisis, the Governor has proposed a dollar increase in the New York cigarette excise tax and a one cent per ounce excise tax on sugar-sweetened beverages. Sugar-sweetened beverages include sweetened water, soda, sports drinks, “energy” drinks, sweetened bottled coffee or tea, and sweetened fruit or vegetable drinks containing less than 70% natural fruit or vegetable juice. The revenues raised would go to New York State Health Care Reform Act (HCRA) Resources Fund to support health care and health related initiatives, such as tobacco control and chronic disease prevention programs.

New York needs to take the lead in implementing these important initiatives to improve the health of New Yorkers, and here’s why:

1). Improved Health

According to the Federal Centers for Disease Control and Prevention (CDC), adverse health effects from cigarette smoking account for more for than 400,000 deaths per year, including the deaths of approximately 25,000 New Yorkers. The proposed cigarette tax increase is estimated to decrease cigarette use by a total of 14 percent, helping to prevent instances of these serious health problems. Nearly 10,000 smoking-affected births would be avoided over the next five years. The tax increase would also prevent 106,500 children in New York from becoming smokers in the future.

A tax of one cent per ounce on sugar-sweetened beverages is expected to increase the price of soft drinks by 17% on average and reduce their consumption by a minimum of 10 percent. The impact on youth is expected to be even higher. Obesity rates and intakes of sugar-sweetened beverages have risen markedly over the past 30 years. Currently, 25% of New York adults are obese and another 35% are overweight. Sugar-sweetened beverages are the food group most strongly linked with poor diet, increased rates for obesity and risk for diabetes.

2). Higher Revenue for New YorkState

Taxes on cigarettes and sugary drinks are a reliable source of revenue. The dollar increase on cigarettes would create $200 million in new annual revenue for New York. The tax on sugar-sweetened beverages is expected to raise $450 million in new revenue in 2010-2011.

Smoking and unhealthy eating has an impact not only on us individually, but also on the rest of society. New Yorkers are already paying dearly for the medical costs associated with treating obesity, diabetes and tobacco-caused disease. Annual health care expenditures in New York directly caused by tobacco use are $8.17 billion. Smoking-caused state Medicaid program spending each year is$5.4 billion.

Obesity currently costs New YorkState an estimated $7.6 billion annually. The portion of our state and federal taxes that goes to pay for treatment of obesity-related diseases is estimated at $771 per New York household and for treatment of smoking-related diseases is $822 per New York household. Government should collect sufficient tax from unhealthy items, such as tobacco and sugary drinks, to pay for the external costs they create.

3). Public Support

In national and state polls across the country, there is overwhelming public support for tobacco tax increases and for taxes on soft drinks, especially if those funds are used to help prevent youth from smoking and reduce childhood obesity. If revenue from the tax is used to help smokers quit, 77% of New Yorkers support the increase on cigarettes. Likewise, if revenue from sugary beverages is used to help prevent obesity among children and adults, 72% of New Yorkers would support such a tax.

Higher prices would discourage people from consuming unhealthy products. The highest consumers (i.e., adults who are overweight/obese, younger, less educated and/or low-income) and those who are most sensitive to price (youth and low-income individuals) are expected to have the greatest reductions in intake and the greatest health benefits. For those who argue discrimination or inequality, remember that people choose to consume these products. If a tax on cigarettes and sugary beverages saves lives, we should not avoid implementing it just because low-income individuals will mostly benefit. The point is people are still free to consume sugary drinks and smoke cigarettes. It’s just that now they have to pay a fairer reflection of the true cost to society.

Increasing cigarette taxes and levying taxes on sugar-sweetened beverages are winningsolutions for New York – a health win that reduces smoking, decreases obesity and diabetes, improves health and saves lives; a fiscal win that raises revenue and reduces health care costs; and a political win that is supported by New York citizens.


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