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Taxes for health: the argument is more about health
than economics
We appreciated the Journal balancing our opinion on
the use of tax as an instrument for health1
with a wry editorial written by a ‘real economist’ trying aiming to
counter the notion that economics is the ‘dismal
science’2. However, we think he may have
scored an ‘own-goal’.
Assumptions are often the economist’s building blocks.
But it is hard to understand why the editorial assumed we were making an
economic argument in support of economic instruments such as taxes, duties, and
subsidies. We were not. Nor did we argue only for economic instruments in the
form of large increases in taxes on any product or behaviour that might be
unhealthy as the editorial implied.
Rather we argued that carefully targeted and evidence-based
economic instruments are an underused instrument to improve and protect public
health. We should perhaps not be surprised that an economist, who does not
understand that climate change is a health issue, misunderstood these
points.
Tobacco taxes have long been used in this way
internationally3 and are described as a key
intervention in the government’s current Tobacco Control
plan.4 However, there has been no real increase
in these taxes since 2000. For alcohol we argued that the impact of differential
taxes by level of hazardous consumption should be explored to see if it could
impact on the huge toll of preventable death, illness, and social dislocation
caused by excessive drinking.
This was exactly the approach taken with the changes in
excise duty aimed at ‘alcopops’ introduced in 2003, a category of
drink apparently formulated and marketed by the alcohol industries to the youth
market. For food, we suggested the focus should include exploring the potential
for selective subsidies on healthier foods, not just additional taxes on
unhealthy foods.
Our arguments are not based, as one might infer from the
editorial, on the narrow view that health-promoting taxes are potentially
justifiable only to balance up revenue generation with
‘externalities’ such as health care and other societal costs, nor
based on Pigou’s notion of addressing market failures.
We are public health professionals arguing for better use of
economic measures, where they are shown to be effective, as a rational policy
instrument to achieve public health goals. We do so because many public health
goals are worth achieving in themselves. We believe that society values
highly measures that prevent human suffering and early death, regardless of
their economic ‘efficiency’. Indeed, it is the exclusive and
uncritical focus on ‘efficiency’ is which, is why economics is often
portrayed as the dismal science.
It is also because we value personal choice and autonomy,
including the right to make unhealthy choices, that we advocate taxes and
subsidies as a key component of rational health policy. Taxes and subsidies
provide signals to the consumer to reduce unhealthy consumption, and start to
counter the often all pervasive signals from vested interests through blanket
advertising of unhealthy products, whilst continuing to allow individuals to
exercise their free choice.
Dr Crampton makes much of the superficially seductive
argument that economic instruments are used by paternalistic public health
control-freaks aiming to curtail autonomy and take away the
‘interest’, ‘flavour’, and ‘fun’ in life.
Such arguments ignore the degree to which the tobacco,
alcohol, and food industries manipulate child and adult consumers through
clever, aspirational marketing. It also ignores the evidence of addiction and
regret among many consumers. Thus if smoking adds so much spice and interest to
life, why is it that smokers almost universally regret
starting,5 and most state they wish to quit and
have tried to do so? 6
Surely measures, including increases in tobacco taxes, which
prevent initiation and subsequent addiction to tobacco enhance
freedom7 by protecting young people from a life
of nicotine addiction and the associated health hazards? These arguments we
believe would cut little ice with the thousands and thousands of victims of
these unhealthy products.
Perhaps Dr Crampton would like to discuss his views with
some of the thousands of smokers (and their families) diagnosed with cancer and
heart disease each year, or some of the victims of domestic violence from
drunken partners. We wonder how much ‘fun’ they attach to smoking
and drinking, or how much ‘interest’ it has added to their
lives?
Finally, the editorial dismisses the notion of independent
policy-making agencies because there is no consensus about health goals and the
use of economic instruments to achieve them. This is a standard argument of
those whose interest is profit not health. We believe there is a strong
consensus about the importance of achieving public health goals, and whilst
there is not complete consensus (when is there in politics?), that there is
strong support for selective taxes and subsidies to promote the public health,
particularly where the purpose has been properly explained, or as we advocate
some of the revenue is dedicated to health purposes.
The problem with the ‘hurly-burly’ of normal
politics, which Dr Crampton advocates to deliver appropriate policies, is that
it is often dominated by overt and covert influences of powerful corporations
whose over-riding aim is to maximise profits, even if it is clearly to the
detriment of the health of the population.
We believe there is good evidence that most of the public
want protection from nicotine-addiction, protection from alcohol-related harm,
protection for their children from the obesity epidemic etc. Furthermore, we
think that most people would agree that public policy-making should not be
dominated by the preferences of vested commercial interests.
Therefore we suggest the adoption of the model provided by
the Reserve Bank and PHARMAC, where a democratically-elected government
establishes agencies that are at arms-length from immediate political and
corporate interference. Such agencies should have appropriate governance
arrangements to ensure transparency and accountability to an independent board.
The agencies should consider information from appropriate experts (e.g. health
professionals, public health researchers and practitioners, economists and
health economists, ethicists, and political scientists) and from the public, and
can establish and implement policies, including economic ones where appropriate,
to fulfil public health goals.
Competing interests: Two authors (NW
and RE) have previously worked for NGOs and the Ministry of Health on tobacco
control issues, and one author (NW) for nutrition issues. All of the authors
have been employed as medical practitioners in tax-payer subsidised health
systems and have even prescribed tax-payer subsidised pharmaceuticals, including
contraceptives. To the likely surprise of some2
they have even prescribed subsidised condoms— given the public health
benefits of preventing unwanted pregnancies and sexually transmitted
infection.
Richard Edwards, Nick Wilson
Department Public Health, University of Otago, Wellington (richard.edwards@otago.ac.nz) Osman Mansoor
Public Health Physician, Wellington References:
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