Sodium taxes: Worth their salt, or salt in the wound?

It is not hard to see why contemporary governments might be wary of taxing salt. Historically, it has not done much for anyone’s popularity – quite the opposite. The story of the political system that legitimises most of them is tied up in rejecting the practice. The burden France’s hated gabelle put on the country’s poorest inhabitants helped cause the 1789 French revolution.

As Professor Franco Sassi, director of the Centre for Health Economics and Policy Innovation at Imperial College London, puts it: “Taxation is a very powerful incentive for getting people to change their behaviour.” He is talking specifically about modern consumption choices, but the impacts of historical salt levies prove the same point.

Less than a century ago, one turned the simple process of evaporating sea water into the first act in “a holy war” to “[shake] the foundations of ... empire”. Those are quotes from Mohandas Gandhi, who explicitly used Britain’s exploitative colonial regime of salt taxes in India as a motivator and structuring principle for the country’s independence movement. His 1930 Salt March launched a mass campaign of civil disobedience across India. Brutal reprisals by colonial forces led Vithalbhai Patel, former speaker of India’s Central Legislative Assembly, to remark that, “All hope of reconciling India with the British Empire is lost forever.”

For Gandhi, who became Time magazine’s ‘Man of the Year’ for 1930, salt was an obvious protest focus. Abstract demands for rights were difficult to understand and potentially divisive, but sodium keeps people alive, no matter their creed. “Next to air and water,” he told some of his more sceptical comrades, “salt is perhaps the greatest necessity of life.” Specifically, the sodium in salt is involved in a range of vital functions, from regulating the body’s fluid balance to transmitting signals through the nervous system. Salt starvation, of the sort that plagued India through its time as a UK colony, causes brain cells to swell, with symptoms ranging from confusion and personality changes to seizures, coma and death.

The somewhat grisly truth is that humanity’s ubiquitous need for salt is also what has made it such an irresistible source of government revenues. After operating for more than 2,000 years, the Chinese government’s salt monopoly – the model for all other salt taxes – only ended in 2016. For much of China’s history, the proceeds from salt taxes were as essential to the functioning of the state as salt was to the health of its people – covering the cost of defence projects like the original Great Wall of China and, at times, totalling more than half of government income.

But just as the last of the world’s governments seem to have got over their salt tax addictions, their salt-addicted citizens have given them a whole new reason to indulge. According to the World Health Organisation (WHO), most people now consume 9–12g of salt per day, or around twice the recommended maximum intake. In doing so, they risk increasing their blood pressure, which can lead to stroke, heart attack and kidney disease. Rather than bolstering the state at the expense of its poorest citizens, salt taxes are now being seriously considered as ways to improve public health.

Sweetening the deal

The comparison here is sugar. In Sassi’s view, the recent taxes on sugar-sweetened beverages have been “a game changer”, introducing the principle that a tax could be levied primarily as a way of improving people’s health. As long as it does not feel like exploitation, it seems people do not mind. There have not been any sugar riots, let alone revolutions.

However, as anyone who has ever momentarily confused the two can tell you, salt and sugar have some important differences. For one, people do not drink salt. “By taxing beverages that have a high sugar content, you can be reasonably sure that you are improving the quality of what people are drinking,” says Sassi, who developed the Organisation for Economic Cooperation and Development’s (OECD) Public Health Programme. “But when you tax foods, people have many more opportunities to substitute them with other foods that may or may not be healthier.”

This proved to be the case in Denmark, which in 2011 became the first country to introduce a ‘fat tax’. Although it led to a 4% reduction in consumption of saturated fat, the hugely controversial levy actually increased Danes’ salt intakes. It was repealed in 2013.

That is not to say the people of Denmark were necessarily averse to eating a little more salt. Another difference from sugar taxes comes from the fact that the public seems far less concerned about overindulging in salt than sugar. In fact, while most people respond positively to products that advertise reductions in sugar, Sassi explains, salt reductions need to happen slowly and silently if products are not going to lose popularity. The WHO explicitly recommends that manufacturers “incrementally reduce salt in products over time so that consumers adapt to the taste and don’t switch to alternative products”.

This is partially because the negative health impacts of excess salt are less obvious than those of sugar, which clearly and directly leads to weight gain. By contrast, even the more strident warnings about eating too much salt can be a little hard to follow. According to the FDA, “excess sodium consumption is a contributory factor in the development of hypertension, which is a leading cause of heart disease and strokes”. Even without considering studies that suggest it is primarily people with high blood pressure who need to worry about their salt intake – and the fact too little salt is itself a serious and historically significant health risk – the information can be a little bit muddy.

“If there’s no awareness or no pressure from the wider environment to reduce salt content,” says Sassi, “then advertising a reduction in salt in products people like is very risky. They will be naturally inclined to overstate the difference in taste and perhaps to switch to a different product.”

Unfortunately, it is not easy to educate people out of this reluctance. The WHO does not hide its estimation that 2.5 million deaths could be prevented each year if global salt consumption were reduced to the recommended level, but it has not had much of an impact on consumer behaviour.

“A lot of research in public health has shown that people are not sensitive to education,” Sassi explains. “They’ve all reached the level of awareness and education that is sufficient for them ideally, in theory, to make good choices. The point is that they’re not making good choices.” The slightly convoluted chain of health impacts from eating too much salt plays neatly into everyone’s time discounting bias, particularly given how ingrained a high salt intake is into our lifestyles and shopping habits. “These are decisions that we have to make lots of times every day. We couldn’t consider all the pros and cons entirely rationally every time we make these decisions – so we use shortcuts and develop habits, and we stick with those,” Sassi adds.

Catering to the consumer

So, it seems unlikely that the health benefits of introducing any straightforward salt tax would be worth any government risking the reputational damage that could ensue. “Taxes alone do not make a huge difference to the diets of ordinary people, because they tend to be relatively small and they target a relatively narrow range of products,” summarises Sassi. It is the same with subsidies on healthier foods, which may slightly bump up consumption of fruit and vegetables but have not been shown to change diets at the scale needed to make a meaningful difference to public health. And, just as the public would likely resist a salt tax, finance ministries are unlikely to countenance diverting precious funds to making avocados and aubergines a little more affordable. “Certainly, in the current public finance climate,” says Sassi, “I don’t think a government would be willing to provide subsidies, other than for poor people.”

There might, however, be a middle way. While education alone has not been shown to have a significant impact on consumer choice, nudges like the UK’s traffic light labelling system and France’s Nutriscore have. These techniques make it quick and easy to compare the health impacts of different food options at the point of purchase, playing into the brain’s reward system and love of shortcuts as they do so. And, as far as consumer choices go, cost is already the most powerful and pervasive nudge of all – so Sassi and his colleagues are working on a new model for aligning value-added taxes with health goals.

“In the UK, everyone focuses on the soft drinks industry levy, which is a tiny proportion of what people pay in taxes on their food and beverages,” Sassi explains. “96–97% of it is VAT, and the way the government leverages VAT on food and non-alcoholic beverages is very differentiated and has nothing to do with health. The proposal that we’ve made and that we’ll be working on over the next three years is to repurpose existing consumption taxes on food and beverages in a way that is truly aligned with health objectives.”

They are not the only ones. In December 2021, the EU Council introduced something similar in its proposal for updating the bloc’s rules on reduced VAT rates. According to the agreement, as of 2030, EU member states should be able to lower or remove taxes on products and services that contribute to attaining environmental or sustainability objectives. On the other side, they will no longer be able to apply reductions or zero rates on polluting products like fossil fuels.

There’s also evidence that food taxes that target more than a single mineral or macronutrient are far more effective than a simple salt tax ever could be. Launched in the same year as Denmark’s fat tax, Hungary’s ‘chips tax’ (on pre-packaged food and beverages high in salt, sugar and caffeine) managed to decrease the consumption of processed foods by an estimated 3.4% without prompting significant unhealthy substitutions. In fact, according to Spoon Guru, it pushed up unprocessed food consumption by 1.1% (figures as of 2015).

Of course, even that is a tiny levy compared with VAT, which is a primary source of tax revenues in many countries. “If we classify all foods based on a nutrient profiling model, we can set higher tax rates on the less healthy foods and lower tax rates – or even exempt – the healthier foods,” continues Sassi. Without treasuries having to make any extra funds available, healthier foods would automatically be subsidised. Once again, diets could define tax regimes. This time, though, everyone might benefit.

“What manufacturers need to see is a clear shift in demand towards healthy products,” concludes Sassi. “If there was a big shift, they would make a lot of money by reformulating their products and putting healthier ones on the market. What they need from government is really a strong push towards changing consumer attitudes. Governments can create a culture that really emphasises the health dimension of food as something desirable. We could have a win-win situation, if the focus was really on creating demand for healthier products.” Therefore, with the right societal nudge, the next revolution could be bloodless – or, in fact, positively healthy.