Prevention Matters

There’s good news in the health reform law for small businesses that pay at least half the cost of their employees’ health insurance. Beginning this year, businesses with fewer than 25 employees and with average wages under $50,000 can claim a tax credit on their income tax return. Small non-profit organizations also qualify. As an example, an employer with 10 or fewer full-time employees and with average annual wages under $25,000 (not including what the owner makes), will receive a 35% tax credit on the amount the business pays for employees’ health insurance in 2010. An online calculator to estimate savings can be found at http://www.smallbusinessmajority.org/.

This tax credit will be available to small businesses until 2014; when the credit is scheduled to increase and be available from state-based insurance exchanges which will be operating by that time.

Having health insurance makes a difference. On average, people without health insurance are less likely to get preventive care such as immunizations or mammograms, more likely to miss work, and to have worse health outcomes when they do get sick than people with insurance.

Susan K. Maloney
Managing Senior Fellow
Partnership for Prevention

Whenever an increase in tobacco taxes is debated, opponents inevitably declare the taxes regressive and say such taxes take money from people who can least afford to lose it and in the process takes food of that families table.

A new study turns that argument on its head. Stephen Block and Patrick Webb, professors at Tufts University, have linked tobacco use in developing countries to malnutrition in children. They found it decreases the proportion of income spent on food. The pair published their findings in October’s edition of the journal Economic Development and Cultural Change.

For example, in Indonesia, where 18 percent of the population lives below the poverty line, the smoking rate is approximately 3 percent for women and 60 percent for men. The World Bank estimates that tobacco is the nation’s second-biggest business and the second-largest expenditure among the country’s poor.

Today we’re talking with Dr. Kelly Brownell, a professor and director of the Rudd Center for Food Policy and Obesity at Yale University. Dr. Brownell led a group of prominent researchers who published an article in the Sept. 17 issue of the New England Journal of Medicine that made a strong public health case for a tax on sweetened sodas and other beverages. The study has generated considerable debate and, while Congress has not yet incorporated such a proposal into health reform legislation that is currently being drafted, Dr. Brownell has continued to press for such steps to be taken at the federal and state levels. To listen to this podcast, click on the media player below. If you don't see a media player, click here.

A recent blog posting by Partnership's Alyson Hazen Kristenson on propsals to tax soft drinks elicited an online comment by the American Beverage Association (the original post and the ABA's comment can be read online here). Needless to say, they were against a soda tax, and repeated the industry's recent assertions that taxes don't educate consumers.

Their comment drew the following response from Partrnership President Robert J. Gould:

Dear American Beverage Association,


We appreciate having an association whose members' sales total $110 billion a year drop by our humble blog. But the points you offered were a bit hard to swallow. The next time you want to engage in a discussion with a group that is dedicated to evidence-based prevention, you should consider bringing along some facts.

Here are a few facts:

1. To your claims that taxes don’t help educate people, we’d respond that they have often been a very important tool in helping to steer people to education programs about healthy lifestyles. For example, in the year after the state of New York nearly doubled its cigarette tax in 2007, calls to the state's smoker's quitline increased from 9,900 calls a month to 23,100 calls a month. Nationally, after Congress increased federal tobacco taxes effective April 1, the American Lung Association reported that its quitline had received 553,000 calls by the end of May - nearly equal to the 591,000 calls it received in all of 2008.

2. The environment in which people make decisions can greatly influence the outcome of those decisions. When unhealthy choices provided within an environment are cheaper or cost the same as healthy alternatives, there is less incentive to try healthy alternatives. However, by increasing the price of the unhealthy choice, you change the environment in a way that not only discourages unhealthy behavior but also provides an incentive to try healthier alternatives.

3. A review article in the Sept. 16 edition of the The New England Journal of Medicine stated: ”The science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear,” and then went on to cite the findings of numerous studies. The authors offered a “conservative” estimate that an excise tax of 1 cent per ounce would lead to a minimum reduction of 10% in calorie consumption from sweetened beverages, “a reduction that is sufficient for weight loss and reduction in risk.”

4. And as for your assertion that a tax on beverages “won’t make a dent in paying for improved healthcare or addressing obesity,” the NEJM article predicts a 1 cent per ounce tax would raise $14.9 billion in the first year alone. That amounts to around one-sixth of the estimated annual costs of the health reform bill being crafted by the Senate Finance Committee. I’d call that a pretty good-sized dent.

Even so, there are actually some points upon which we can agree: 1) obesity is a serious and complex problem that requires thoughtful and comprehensive solutions, and 2) education, exercise and balanced diets are critical to solving this problem.

It’s not necessary to raise taxes on all your members’ products to put such incentives into play. According to your web site, the industry’s single-serve bottled water products already account for 19.3 percent of sales and diet sodas accounted for four of the industry’s top 10 carbonated soft drinks and another 19 percent of that market. Any changes produced by a tax would not leave your members high and dry, but instead would help them grow the markets for their healthier alternatives.

Whether or not the tax would “make a dent” in improving the health care system, $14.9 billion a year would certainly be enough to fund precisely the type of public education effort that you say is needed to persuade people to pursue exercise and a balanced diet.

Could we count on you to support such a proposal? If so, we’d love to meet with the beverage industry to discuss it. If you don’t mind, we’ll supply the drinks.

Robert J. Gould, Ph.D.
President and CEO
Partnership for Prevention

Soda taxes have been in the news a lot lately. On one side are public health experts who say that soda taxes could address our nation’s obesity problem. They cite the success tobacco taxes have had in reducing smoking rates and the relationship between soda consumption and body weight. An article in this month’s issue of the New England Journal of Medicine touts the health and economic benefits of taxing sugary drinks. The Institute of Medicine also recently released recommendations for local governments to combat childhood obesity that include implementing taxes to discourage consumption of foods with minimal nutritional value, which certainly include sugar-sweetened beverages.


Such taxes are also being discussed by policymakers. San Francisco’s mayor announced plans to introduce legislation this fall that will impose a fee on retailers selling sugary drinks, including soda. And President Obama was quoted as saying that soda taxes need to “be explored” as a way to reduce childhood obesity.

Not surprisingly, these proposed taxes are facing fierce opposition. This past Sunday’s Washington Post contains an opinion piece dispelling the 5 “myths” about soda taxes. Coca Cola’s CEO has weighed in on the issue calling a soda tax “socialist.” And anyone who reads a Sunday newspaper has surely seen the full-page ads run by Americans Against Food Taxes (aka, the beverage industry).

Opponents say that recent tax proposals aren’t large enough to impact obesity. That might be true, but they are missing the point. Drinking fewer sugary drinks has no downside (except possibly to the reduced profits of the beverage industry). These drinks push out healthier options like low-fat milk or water, and flood the body with excess calories that are rarely burned off and increase blood sugar levels. Teens consume the most soda and other sugary drinks, and are also historically price sensitive. Limiting their consumption of sugary drinks would cut their risk for obesity, diabetes, and cardiovascular disease, all costly health problems. And with states cutting essential programs and services, they should be looking to increase revenue wherever possible. Soda taxes seem like a win-win situation.


Alyson Hazen Kristensen, MPH

Senior Fellow & Program Officer
Partnership for Prevention

President Obama hinted he could support a "sin tax" on fizzy drinks to help lower high rates of US obesity, but admitted it would be an uphill battle against corporate and economic interests.

Starting today, Partnership for Prevention begins a weekly feature on this blog in which we recognize the best and worst prevention ideas that made news within the past week. We solicit nominations from the Partnership staff, which then votes on the weekly winners. If you should come across anything that you feel is worthy of a nomination, please e-mail it to us at dthompson@prevent.org.

This week's winners:

BEST IDEA:

The Prevention and Wellness Fund - The economic stimulus package signed into law on Tuesday included included $1 billion for a Prevention and Wellness Fund, which will be used to fund key initiatives related to disease prevention and health promotion. While it was much less than the $5.8 billion sought in the Senate's original version of the bill, it still represents the single largest one-time infusion of resources into the U.S. public health system. Partnership for Prevention’s recommendations to Congress that were unveiled in December included the creation of a discrete, sustainable funding source to support state and local core public health activities and provide incentives for states to meet specified public health objectives.


WORST IDEA:

We actually had a tie between two alcohol-related stories:

Wasteful Whiskey Rebellion: Distillery executives in Kentucky recently poured bottles of bourbon on the steps of the state capitol to protest a proposed 6 percent sales tax increase on alcohol. Despite their objections, the legislature approved the tax hike and the governor signed it into law on Saturday. Studies show that taxing alcoholic beverages is an effective public health strategy for reducing the burden of alcohol-related disease. In the February 11th issue of Join Together, Cambridge Quarterly of Healthcare Ethics co-editor Steve Heilig noted that alcohol taxes have been largely ignored in recent years while the public has turned its attention to taxing tobacco to fund health initiatives. So the most recent "whiskey rebellion" not only ran counter to good science and good public health, but it was a waste of good bourbon.

Rise of the "Beer Pong Lobby:" An impassioned online campaign by leagues of beer-pong players led a veteran state senator in Maryland to abandon his effort to ban drinking games such as beer pong and flip cup in Baltimore bars. Sen. George W. Della Jr., a Baltimore Democrat, felt such games encourage excessive drinking and led to raucous behavior in city neighborhoods. "We had a campaign going to get everybody to contact the senator, and I was really happy to see all the people that came together," said Jim Reiter, co-founder of MD Beer Pong, which bills itself as the state's largest beer-pong league.

Opponents might argue that it’s beckoning back to the days of prohibition, but increasing the alcohol excise tax is a valid strategy to improve the nation’s economy and health status. Tobacco taxes have been increased several times over the last few years for the very same reasons, yet it has been more than 18 years since the taxes on alcohol were raised. A commentary by Steve Heilig in the February 11th issue of Join Together provides a solid argument on the importance of increasing the alcohol tax—at both the state and federal levels.

UPDATE: Kentucky bourbon industry officials emptied bottles of bourbon on the state Capitol's front steps Tuesday to protest a proposed 6-percent sales tax on all distilled spirits. Despite this attempt at a new "whiskey rebellion," the state House Appropriations and Revenue Committee approved the proposal in an effort to offset a projected $456 million revenue shortfall in the fiscal year that ends June 30.

The old joke goes that two men were being chased by a bear when one of them shouted to the other one: "What are we gonna do? We can't outrun that bear!" The second man replied: "I don't have to outrun him, I just have to outrun YOU!"

That seems to have been big tobacco's philosophy earlier this week during the debate over a hike in federal tobacco taxes. Sen. Jim Webb, D-Va., offered an amendment to cut the 61-cent-a-pack tax hike to only 37 cents, and make up the difference with a new system of taxing the income of partners in hedge funds as ordinary income.

Could big tobacco have been betting that, in the current economic climate, hedge fund managers are more despised among the American public than they are? Considering that Webb withdrew the amendment due to a lack of support, was it a bad gamble? Who outran the bear?

By Diane Canova,
Managing Senior Fellow for Tobacco
Partnership for Prevention
dcanova@prevent.org

We have just learned that the Senate is expected to vote today on an amendment by Sen. Jim Webb (D-VA) to the State Children’s Health Insurance Program (SCHIP) bill that would only increase the federal tobacco tax by 37 cents, instead of the proposed 61 cents. This amendment would dramatically reduce the new federal tobacco product tax rates to fund expansion of the SCHIP legislation, substituting a new system of taxing the income of partners in investment management services firms (e.g., hedge funds) as ordinary income.

Tobacco taxes are not only a good way to raise revenue, but they are a proven deterrent to tobacco use. This increase combines good fiscal policy with good public health policy.

Please call your senators' offices today expressing your support of the full 61 cent cigarette tax and opposing the Webb amendment to lower the tax. Let us know if you have any questions or need more info.