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Tom Feran
By Tom Feran December 6, 2010

Rep. Dennis Kucinich assails tax deductions for fast food advertising that targets children

Childhood obesity in the United States has more than tripled the last 30 years, according to the Centers for Disease Control and the American Heart Association. It has reached epidemic levels and increased risks for heart disease, diabetes, stroke, cancer and osteoarthritis.

The inactivity associated with watching television has long taken much of the blame. But a recent UCLA study reported in the American Journal of Public Health found that commercials, not TV itself, were the link to obesity.

In fact, it found no association with television viewing and obesity for those who watched videos or commercial-free programming.

For Rep. Dennis Kucinich, the implication is clear: Taxpayers are subsidizing the obesity epidemic by providing tax breaks to the food industry for marketing fast food and junk food to children.

"We are giving almost $2 billion of taxpayer money to the junk food and fast food industries every year to make the (childhood obesity) epidemic worse," he said in a news release Nov. 10.

That whet our appetite for curiosity. So PolitiFact Ohio sank its teeth into Kucinich’s claim that taxpayer dollars are used to market to bad food to children.

On the ills of fast food and marketing efforts, Kucinich cited a new study from the Rudd Center for Food Policy and Obesity at Yale University:
"The research is clear. Eating fast food harms young people’s health," the study says. And it concludes that efforts to market fast food to children are both effective and rapidly expanding.

The fast food industry spent more than $4.2 billion in 2009 on TV commercials and radio, magazine, outdoor and other ads, the Rudd study said.

The industry spent nearly $2 billion in 2006 on marketing and advertising specifically aimed at children, according to a report to Congress from Federal Trade Commission.

But how do taxpayers subsidize that?

That answer is simple. Fast food marketers get the same break that other businesses do. The federal tax code allows companies to deduct  "reasonable and necessary" expenses of marketing and advertising from their income taxes.

That doesn’t sit well with Kucinich when the marketing targets kids. The Cleveland Democrat introduced a bill, HR 4310, to eliminate that tax deduction. The bill attracted 28 co-sponsors and has been referred to the Ways and Means Committee.

Kucinich's bill would prohibit any company from claiming a tax deduction for the expense of marketing fast food to children. Congress’ Joint Committee on Taxation estimated "on a very preliminary basis" that the legislation could raise $15 billion to $19 billion in additional federal revenue over the 10-year budget period -- "which is almost 2 billion per year," said Kucinich’s press aide.

A revenue estimate from the Joint Committee is treated as confidential unless released by the member of Congress who requested it. Confidentiality allows the committee staff to maintain its nonpartisan role in the policy process.

Kucinich’s office gave us a copy of the staff letter with the committee’s estimate, but we were unable to get background details. But the letter notes that a number of unsettled issues surround the bill -- ranging from defining "fast food restaurant" or "food of a poor nutritional quality" to determining what constitutes advertising that is "primarily aimed at" children -- and all of those issues would affect the bill’s impact (including the amount of new tax revenue).

The committee’s estimate clearly covered more than the child-oriented fast food advertising in the 2006 FTC survey. At the top corporate tax rate of 35 percent, the $2 billion cited in that report would have yielded about $700 million in additional tax revenue.

A study from the National Bureau of Economic Research does support Kucinich’s assertion that eliminating the tax break would reduce the number of overweight children. Eliminating the tax deduction would reduce the number of overweight children by 5 to 7 percent, it said,  and banning advertising to children would prompt an even larger reduction.

So where does that leave us on Kucinich’s assertion?

Featured Fact-check

  • Kucinich inflated the tax revenue benefits of his bill, rounding up from the high end of the Joint Committee on Taxation’s soft and "very preliminary" estimate.

  • That revenue estimate is nearly triple the tax benefit that would be generated by the firmest number we found for advertising specifically aimed at children, the $2 billion figure in the 2006 FTC study.

  • Regardless of which estimate is best, Kucinich’s assertion that fast food marketers are using "almost $2 billion of taxpayer money" is off base. It’s not tax revenue that’s being spent. Rather, it’s an estimate of money the fast food industry didn’t have to pay in taxes as a result of deductions for business expenses that every business can take.

Childhood obesity is a serious topic and the congressman may be nobly intentioned. But dollar figure he uses is shaky at best and his description of the money as taxpayer dollars is misleading.

That’s why we rate Kucinich’s claim as False.

Our Sources

Centers for Disease Control, National Center for Chronic Disease Prevention and Health Promotion, "Childhood Obesity," June 03, 2010

American Heart Association, "Unhealthy and Unregulated: Food Advertising and Marketing to Children," Jan. 27, 2009

New York Times, "Commercials Are the Culprit in TV-Obesity Link," Feb. 9, 2010

American Journal of Public Health, "Associations of Television Content Type and Obesity in Children, " February 2010

Kucinich news release, "New Yale Study Highlights Role of Fast Food Marketing in Childhood Obesity Epidemic," Nov. 10, 2010

Library of Congress Bill Summary, 111th Congress, H.R. 4310

Rudd Center for Food Policy and Obesity, "Evaluating Fast Food Nutritionand Marketing to Youth," November 2010

Federal Trade Commission, "Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities and Self-Regulation," report to Congress, July 2008

Internal Revenue Service, Publication 535, Business Expenses, March 9, 2010

Joint Committee on Taxation, 111th Congress, Chief of Staff Thomas Barthold, Letter to Rep. Kucinich, Sept. 27, 2010

Office of Chief of Staff, phone interview, Dec. 1, 2010.

Joint Committee on Taxation policies

Journal of Law and Economics, 2008, "Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity,"

Reuters, "Fast-food ad ban could cut child obesity: U.S. study," Nov 19, 2008

E-mail exchange with Nathaniel White, press secretary for Rep. Dennis Kucinich, Nov. 30, 2010

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Rep. Dennis Kucinich assails tax deductions for fast food advertising that targets children

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