An Exercise Stimulus Plan

When the details of an economic stimulus plan are eventually agreed upon, Congress will likely make available millions of dollars to tax payers, but will do so with designs on how that money will be used once it reaches our wallets. Both current Senate and House packages include a substantial income tax credit with the idea that it will prompt retail sales. A tax credit for home purchases will be made available to revive the housing market.

This idea is not new or rare. Governments understand that tax policy has a unique power to influence behavior. However, while all lawmakers seem to understand this power, they struggle to always implement it in useful ways.

Bre McGahey’s post about New York Governor Paterson’s budget proposal ("Paterson’s State of the State Hypocrisy") highlights his recognition that taxing a behavior will discourage it. Unfortunately, as the post poignantly brings to light, the Governor’s budget discourages healthy lifestyles by imposing New York’s sales tax on health club dues.

With a nationwide obesity crisis, it is difficult to understand why New York is not alone in its attempt to tax health club memberships. Will the revenue gained from 5 or 6 percent of gym dues cover the costs of health care for type-2 diabetes? Heart disease? Cancer? A single one of the many other diseases associated with obesity?

It’s time to apply a more beneficial carrot-and-stick approach to health care. Some lawmakers have done this by introducing legislation that would offer a tax credit for engaging in a more active lifestyle. As of today, eight state legislatures are considering proposals that would offer a financial incentive for trying to get in shape. Tom Richards has posted on this page about WHIP and PHIT, two federal pieces of legislation that would encourage exercise through tax policy

I hope that more lawmakers, in Washington and in the 50 state legislatures, decide to use their most effective means to encourage physical activity. I can think of no better use of taxpayer money than having it re-invested in America’s health.

-Tim Sullivan