Obesity tax

‘Efficient policy taxes being fat, not eating fat”

If policymakers were serious about implementing efficient obesity policy, they would have to tax being fat, not eating fat, by charging individuals for each “overweight” kilo they’re carrying. It’s an idea so repugnant that even the most heartless economist surely wouldn’t endorse it… A provocative take on the concept of “fat taxes”, from the renowned maverick economic thinkers, Freakonomics…

THE DANISH POLICYMAKERS who recently implemented the world’s first “fat tax” are remarkable not for their directness in addressing the growing Western challenge of obesity, but for their indifference to the plight of the poor, their deference to political correctness at the cost of economic efficiency, and their willingness to punish certain segments of society.

The Danes may have been the first, but headlines throughout the western world assessed the likelihood of other countries to follow, including this one. A fat tax in the US (or the UK for that matter) would add to the growing thicket of regulations across local and federal jurisdictions intended to address weight gain and the external costs that obesity imposes on society — both through higher private insurance premiums and ballooning government outlays for the uninsured.

Whether the tax will improve health outcomes is an empirical question that won’t be answered for several years or more. Steep “sin taxes” on cigarettes, combined with anti-smoking campaigns, have achieved reductions in smoking rates. In other contexts, empirical evidence suggests that dramatic price increases are required to induce measurable changes in behavior, let alone health outcomes.

Regardless, there are plenty of other reasons to hope that we stop at importing fat-laden foods from the Danes and leave their fat tax over there.

First, a fat tax is regressive. That the surfeit of cheap, nutritionally bankrupt calories principally imperils the poor is a popular refrain among health and nutrition advocates. Low-income households are more likely than wealthy cohorts to eat fatty fast food and to have less access to fresh, healthy food. A fat tax, then, hits the poor harder than it does the rich, who can better afford the “good” unsaturated fats and avoid the “bad” saturated and trans fats…..

Freakonomics: Read the full article here