Do We Need A Soda Tax?

Coming up on this episode of the Doctor's Pharmacy. Why should we be handing out tax breaks to industry lobby groups or for companies spending billions of dollars advertising junk food to kids? Welcome to the Doctor's Pharmacy. I'm Dr. Mark Hyman and that's Farmacy with Dr. Mark Hyman, F-A-R-M-A-C-Y, a place for conversations that matter. And today's conversation, I think you're gonna think matters a lot because it's on the subject of my new book, Food Fix, how to save our health, our economy, our communities, and our planet one bite at a time about our food system, what's wrong with it, and how to fix it. Now there's a lot of controversy about what to do and how to do it, but there's some great thinking about how to reduce the consumption of bad foods, particularly sugar-sweetened beverages. And there's efforts globally around the world looking at soda taxes as a solution for bringing down the consumption of foods that we know cause obesity and chronic disease, which we heard about in the last podcast. Now there's a group that started called the Task Force on Fiscal Policy for Health started by Larry Summers, the former head of the Council of Economic Advisors under President Obama and Michael Bloomberg, who's the former mayor of New York, to look at bringing together leaders in fiscal policy around the world to create incentives for people to consume less and disincentives for them to consume more. In fact, Larry Summers said, what I came to realize was that in terms of human betterment, In the healthcare arena, there was enormous potential. In terms of the impact you could have, even with a limited number of dollars, there was probably no sector more promising than health. So looking at global health through the economic lens, he realized that countries could drive tremendous returns by investing in health, making it one of the best financial investments. He said, Sometimes the returns can be as high as 9 to 1 or even 20 to 1 in terms of the benefit to cost ratio. Now he believed using price as an economist to use price to influence behavior, and it's a very powerful lever. People are price sensitive. Second, taxing products like tobacco and soda creates a lot of noise about those products, which can itself make people leery of buying them. See taxes, he said, discourage things, and it's better to tax things we want to discourage, like tobacco and foods that cause obesity, than it is to tax things we want to encourage, like working and saving. We have the evidence that we do respond to prices and we do buy less of the things that we like when they become more expensive, whether it's soda or tobacco. And that's the basic principle of economics. So they created a coalition of leaders from around the world and looked at how do we start to think about taxing soda and other foods to create incentives to consume less. And I think this is a very good idea because if you look at all the data, it works. Study after study has been done on countries and cities and states that have actually implemented soda taxes and they do bring down consumption. They do actually actually provide revenue for public health initiatives, for community projects, and everybody wins. Now, some people say it's regressive, which means that the poor are disproportionately affected, and it's true, but they're also the ones to gain the most benefit from consuming less by having more productivity, less health care costs, less chronic disease, and less of the damage from consuming soda. Now, when those taxes are paired with incentives for eating healthy food, It's a win-win for everybody. And by the way, they work, right? These programs work because if they didn't work, why would the beverage industry, the American Beverage Association, spend $38 million fighting soda taxes in just four cities in California in the 2016 election? They wouldn't spend that kind of money if they didn't think they would take a big chunk of their profits if they actually passed the tax. Thank God that the Arnold Foundation and Mayor Mike Bloomberg took $20 million of their own private money to have a counter campaign which allowed the soda taxes to pass. Now, that's actually pretty good confirmation that these taxes actually work. And they do work also in reducing consumption. Often these taxes are opposed by poor communities, by Hispanic and African-American communities which are disproportionately affected because guess what? The American Beverage Association and the soda industry funds these organizations. They got $2.1 million went from Coca-Cola to the NAACP. So it's unfortunate, but they are pulling out all the stops to try to stop this. In Philadelphia, they tried to pass a soda tax years ago. It almost passed, but the $10 million donation to the Children's Hospital in Philadelphia led to the lack of passage of the soda tax. But again, a number of years later, there was another effort. It passed, and the money has been used for social programs for social benefit to uplift poor communities using support for education and provided money to fund universal pre-K, public schools, recreation centers. It was $500 million so far from the revenue from the taxes that's used to actually uplift these communities. Now, some people went to Delaware across the border to buy the non-tax soda, but the net consumption of soda decreased dramatically and the community benefits and health benefits and reduction in healthcare costs outweighed any downsides. In San Francisco, Laura Schmidt, who is a professor of health policy at the University of California in San Francisco Medical School, worked on a program to improve health in underserved areas in the Bay Area. And she'd worked on alcohol addiction and other things, but she focused on sugar when she saw that was one of the leading causes of liver transplants in America that wasn't caused by alcoholism, but by sugar and its consequences of obesity and diabetes, which called fatty liver disease. She knew the way to tackle the country's sugar addiction was to use some of the same tactics that worked on alcohol, such as taxes and warning labels. What she did was very smart to help get the support of the communities and also to prevent the tax from being regressive. They would use the roughly $10 million in the annual revenue brought in by the soda tax to help pay for nutritious school meals made with locally grown produce and to install water hydration stations in schools and public buildings so people could have something to drink if they weren't drinking soda, which is cheaper than water. She also used some of that money from the tax revenue to pay for Healthy eating vouchers for low-income people in San Francisco. They installed 100 brand new water stations in parks and public locations, often targeting low-income neighborhoods that needed the most. So if they were going to tax something they wanted to provide a benefit and that's what's so beautiful about this approach. Now you might be saying that's just going to create a nanny state. But think about it. What do nannies do? Nannies protect our children, which seems like a good thing to me. Now when you talk about an anti-state, that's a term that's used, in my view, as propaganda. It's used by people who want to perpetuate the status quo, where they're benefiting from regulations that are so weak that they mislead the people into buying products that ultimately cause harm. You know, we have a lot of things that we have a nanny state about. We have mandatory seatbelt laws. Nobody liked that. The car makers didn't like it. We have emission control standards. We have mandatory vaccinations, which some people can argue with, but I think vaccinations are important part of our public health initiatives. They have mandatory car seats for kids. There's lots of public health measures. How is that any different? It's not. That's the answer. Now, there's been some great policy solutions proposed by academics and scientists. I'm going to share some of them with you. I don't agree with all of them, but they're interesting and they're somewhat controversial, but they speak to the challenges that we face globally around chronic disease. They speak to the challenges of our food system, but they do provide a roadmap for improving our overall food system and the health of our population. The first thing we need to do is educate the public that there is no biological requirement or nutritional value in added sugar, right? The food industry should be forced to label added sugar, which is going to have to do soon, but they should do it in teaspoons rather than grams. If a can of soda says 39 grams, do people really understand that has almost 10 Teaspoons of sugar. Here's this crazy thing. I was recently speaking at a conference on the food system and one of the other speakers was from the Food and Drug Administration. And I challenged her. I said, why can't we change the labeling of sugar to be in teaspoons rather than grams? Because no one knows what grams mean. And she gave me an answer that was so disappointing. She said, well, honey, maple syrup, different forms of sugar, table sugar all have different weights. So if we listed them in teaspoons, it would not be accurate and would be confusing. And I thought to myself, wow, well maybe I said it out loud, but isn't there a way that you can actually create an equivalent number that's in a teaspoon equivalent for the amount of sugar so that people actually know what they're eating? That would change people's behavior, would make them stop and think. But the food industry doesn't want us to know that. So It stays as it is as grand. Other proposals have been to ban advertising of sugary drinks and junk food from sporting events, just like we did with tobacco. You can't advertise cigarettes when you go to a baseball game anymore. We should encourage celebrities to not advertise for junk food. People like Tom Brady, the football legend, Steph Curry, the basketball star, Beyonce of all, sworn off marketing junk food and soda. Perhaps we should also consider not only taxing sugary drinks, but also sugary foods like they've done in Mexico and has been very successful. Maybe we should have a complete ban on ads for sugary drinks on television, internet and on demand services. We should change our agricultural supports to foods that are healthful instead of harmful. I think it's important that we look at leveraging fiscal policies to change the trajectory of the food system. This has been done over and over around the world and has been successful. And I encourage every government around the world to explore soda taxes. It can be done at the national level. It can be done in provinces, counties, states, municipalities. The best option is what we call a tiered tax, which taxes beverages on the amount of sugar they contain instead of like a drink. For example, a kombucha might have sugar and so might a soda, but a bottle of kombucha might have four grams of sugar, but it should not be taxed at the same rate as a can of Pepsi with 41 grams of sugar. And we call this a tiered tax, which is like a penny per ounce tax. I think that works quite well and they face less opposition and they work best for consumers and it's a win-win for everybody. And I think, you know, when you look at the taxes around the world, 30 countries have passed a tax on sugary drinks, including Ecuador, Barbados, Belgium, Portugal, Ireland, Spain, the United Kingdom, South Africa, Hungary, the Philippines, and lots more. And the impact actually works. It reduces consumption. It forces big food to reduce sugar in its products. I recently visited Abu Dhabi and talked to one of the leading politicians there, and he said that they enacted a 50% tax on soft drinks and 100% tax on energy drinks. The CEO of Red Bull called them complaining they were down in sales by about 70% and they didn't care because they don't get any tax revenue from these companies. So their complaints fell on deaf ears. India. India has a 40% tax on sugary drinks. Why? Because they're suffering enormous rates of diabetes. Philippines passed a tax on soft drinks containing both caloric and non-caloric sweeteners and those with high fructose corn syrup are taxed at double the rate of other drinks. Now Mexico is one of the most obese countries and has one of the highest obesity rates and of course the highest rates of consumption of soda. No surprise there. In 2014 they enacted a 10% tax on sugary drinks and a 5% tax on junk foods. And when they looked at the program, researchers looked at the program after just a year, the soft drink sales dropped 12% while the sales of bottled water climbed 4%. These findings provided the first hard evidence that such taxes nudge people in the right direction. Follow-up studies actually looked at even better trends. The greatest reduction in soda occurred among the low-income Mexicans and households with kids, which is a good thing. In one study in the Journal of Nutrition found a 16.2% jump in water purchases among low and middle-income households. Now, if that weren't impressive enough, a study in the medical journal PLOS Medicine estimated that over the course of a decade, the Mexican tax could help save almost 19,000 lives, prevent 200,000 cases of diabetes, and lower Mexico's healthcare costs by almost a billion dollars. And the upside of the tax is that you could use that tax revenue to subsidize nutritious foods and incentives. Now, the sad fact is that the price we pay for most foods doesn't reflect the true societal cost of those foods. Thanks to crop supports, sugar tariffs, tax breaks, and super cheap corn syrup, a can of Pepsi costs less than a dollar in many parts of America. Obesity, diabetes, metabolic disease cost taxpayers and federal government trillions in healthcare spending and lost productivity and human suffering. I mean, even the way we grow and produce corn syrup and other ultra-processed foods has a devastating effect on our soil, air, water, and climate. So why do we allow this? Why don't we acknowledge the true costs of food and price them properly. You know, Dr. Dariush Mozaffarian from Tufts thought a lot about this. And they created a proposal, which is levy a flat tax of 20 to 30% on most packaged and processed foods. And then use that money to subsidize nutritious foods that reduce healthcare costs and have a less harmful impact on the environment. Then you would use all that money to invest in and reduce the price of minimally processed healthy foods like fruits and vegetables and nuts and seeds and olive oil, avocado oil, and so forth, and fish and yogurt, you could turn the prices upside down or at least you would make them more normal. So now you couldn't buy a 36 ounce soda for 99 cents anymore. Instead of paying 75 cents for an apple and orange, you'd pay 20 cents. Maybe a pound of wild or sustainably raised salmon wouldn't cost you $15. At Whole Foods, it would cost you four or five bucks. Maybe organic and grass-fed and grass-finished beef and chicken and eggs would be cheaper. If animals we eat were raised regeneratively and if the Ecosystem services provided by those farms and ranches were reimbursed. Who knows? We may even get paid to eat regenerative animal food because it reverses climate change and preserves water resource and increases biodiversity. Dr. Mazafarian said, We should use the revenue from junk food taxes to create incentives and systems for making healthy food less expensive while helping farmers. We don't want to just make food less expensive by putting farmers out of business, but the price It's just an absolutely crucial tool. We've learned from tobacco and cigarette taxes, for example, how important prices. Another issue is we also provide tax breaks to companies for doing the wrong thing. Why should we be handing out tax breaks to industry lobby groups or for companies spending billions of dollars advertising junk food to kids or the poor? We need to take away those tax breaks and provide companies with incentives for marketing, advertising, and developing healthy foods. Another great option is creating soda-free zones. A lot of institutions, both public and private across the country and around the world for that matter, are now showing that this can be done. More than 30 medical centers and universities in the United States have stopped selling sugary beverages. They've also implemented policies to make clean drinking water available and healthy foods more available. In Geisinger Medical Center in Pennsylvania, they provide healthcare to thousands of patients. They eliminated sugar-sweetened beverages, removed all deep fryers, started limiting sodium, and using locally grown fruits and vegetables in its meals in the hospital and health care centers. Indiana University Health System did the same thing and they put on labels on foods. They said, screw the FDA, we're gonna put on our own labels. Red, yellow, green to help people decide what to eat. Red is bad for you, yellow maybe don't eat too much, and green is good for you. The Hospital Healthier Food Initiative with the Partnership for a Healthier America launched saying that at least 700 hospitals nationwide have been committed to serving more nutritious patient meals implementing stricter cafeteria standards and selling more fruits and veggies and water and other healthy foods. In fact, at Cleveland Clinic, my institution, they were among the first to remove sugar-sweetened drinks from the campus and offer people healthier options. This can happen. Many large companies have also begun to change their food environments. They're wonderful services that help companies that want to create healthier workplaces. Like Snack Nation, for example, helps people replace the junk food in their homes and offices with better-for-you snacks like fresh fruits, nuts and seeds, trail mix, and low-carb protein bars. You can do a lot of stuff too. You can decide, I'm not gonna have any more sugar-sweetened beverages. That would be a good thing for you and everything else that's going on in the world. You can also try a personal sugar detox. Not a bad thing to get you healthy and feel better and solve your problems while helping the world. Just go to getpharmacy.com and learn about my 10-day reset program. And become active in your communities. You can actually start a local ballot initiative for soda taxes. That's how all the soda taxes in this country were initiated and you can start in your own community. a very powerful strategy for you to become an activist. I don't think we should be sitting on our couches waiting for somebody else to fix the problem. If, for example, every city or county in America had a soda tax, there'd be no need for a national. And so I urge you to vote in favor of a soda tax referendum where you live if they have one on the ballot. If there's not one on the ballot, then make it happen yourself. In many places, all it takes to get a referendum on the ballot is a proposal with enough signatures behind it, and you can find out what the necessary criteria in your town through a quick Google search or a trip to your local town hall. We have the power, believe it or not, to make change. Each of us can be an activist and make change in our communities and our families and even in policy. Yes we can. So if you want to learn more about my new book, Food Fix, how to save our health, our economy, our communities and our planet one bite at a time, go to foodfixbook.com There you can also find my video on five steps for a healthy planet and a healthy you, as well as my action guide which goes through all the actions that you can do in your family, your community, even politically, and all the policy changes and everything needs to be happening so we can change the food system for the better. I hope you check it out and I hope you enjoyed this podcast. If you loved it, please share with your friends and family on social media. Subscribe wherever you get your podcast. Leave a comment. I'd love to hear from you and I'll see you next week on the Doctors Pharmacy. Don't forget, there's a way to listen completely ad-free. With Hyman Plus on Apple Podcasts, you can enjoy every episode without any breaks. Just open Apple Podcasts and tap Try Free to start your seven-day free trial.