Re-thinking taxes to enhance public health

Abstract

Background Tobacco, like many other harm inducing products such as alcohol and unhealthy/sugary food, is mainly manufactured and supplied by profit seeking private enterprise. Such companies have a strong incentive to expand existing markets to increase profits at the expense of public health. Traditionally the objective of market interventions is to correct perceived market failures, such as the externalities created like second-hand smoking, or informational gaps regarding risk. Excise duty, the most effective intervention, has been viewed as a way of both raising revenue and deterring consumption through higher prices. Yet despite multiple market interventions global epidemics associated with smoking and other harm inducing products continue to create high levels of mortality and morbidity, and their associated costs. Methods A narrative review of the impact of public health related market interventions on both the demand and supply side of the markets for tobacco, alcohol, and food. A set of criteria on the impacts of taxation on markets is developed. Results Existing interventions, including tobacco/alcohol duty, are identified as primarily changing the demand side, while there are very few supply focussed interventions. Complementary approaches to supply side taxation are identified which address corporate profits and the ability of shareholders to access that profitability, thereby changing the incentives faced by profit seeking companies. Conclusions A new systems approach is needed to re-examine and understand the wider impact and potential of taxation. Adopting such a holistic approach would help moves towards a tobacco endgame and moves to address other company related epidemics such as obesity and growing levels of diabetes. Companies could not only be directed towards healthier products (such as e-cigarettes or reduced sugar cereals), but also made to pay a greater contribution towards the costs to society they help to create.

Keywords

• WCTOH