Bill Targets Tax Deductibility of Junk-food Marketing

When one-third of kids are overweight or obese, should the tax code be subsidizing the marketing of low-nutrition food and drinks to children? Senator Richard Blumenthal (D-CT) and the nonprofit Center for Science in the Public Interest say "no!"

CSPI, the nutrition and food safety watchdog, strongly supports legislation introduced today by the Connecticut senator that would amend the tax code to prohibit any deduction taken by companies for advertising or marketing through the use of characters, advergames, and in-school promotions of unhealthy foods to children under 14.

The bill, the Stop Subsidizing Childhood Obesity Act, would direct the revenue generated by eliminating such tax deductions to the U.S. Department of Agriculture's Fresh Fruit and Vegetable Program, which serves elementary school students in low-income areas. In 2012, the Federal Trade Commission estimated that manufacturers spend about $2 billion each year marketing food to children. CSPI estimates that eliminating deductions for such spending could raise $550 million each year—unless companies moved their marketing dollars to healthier fare.

"Ideally, food manufacturers would not spend any money convincing children to eat foods and drinks that promote obesity, diabetes, heart disease, and other health problems," said CSPI nutrition policy director Margo G. Wootan. "That taxpayers indirectly subsidize promoting disease to children doesn't make any sense. We hope legislators in both parties join Senator Blumenthal's effort to close this tax loophole."

A study by the Institute of Medicine found that food and beverage advertising affects children's food preferences, diets, and overall health. Children (ages 2–11) see an average of 13 food- and beverage-related TV advertisements per day (about 4,700 per year), mostly for unhealthy foods. According to research published in the Journal of Law and Economics, eliminating the deductibility of costs associated with unhealthy food marketing could reduce rates of obesity by five to seven percent, which would mean 700,000 to 1 million fewer obese children.