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The real reason for a fat tax

By Kay Bell · Bankrate.com
Thursday, October 6, 2011
Posted: 2 pm ET

Colorado is home to the skinniest Americans, although there are reports they've been loosening their belts of late.   

Colorado also imposes a soda tax and a candy tax.

Coincidence? Or cause and effect?

If you're a fan of the taxes, you say that the extra pennies tacked onto fattening food and drinks supplement willpower and help people keep off the weight.

That's the ostensible reason that Denmark recently enacted a tax on foods high in saturated fats. Known popularly, or unpopularly if you like the now-taxable edibles, as a fat tax, the new levy is expected to raise about 2.2 billion Danish krone. Here in the U.S., that converts to around $396 million.

And that added income, not the slightly heavy citizenry of Denmark, is the real reason for the fat tax.

Denmark, like just about every country in the world, is looking anywhere and everywhere for more money.

Danish politicians, also just like elected officials worldwide, also find it easier to dress up taxes in the guise of public benefit.

That's why we and other countries have so many sin taxes.

The majority of folks agree that certain activities are bad, usually because they're not healthy. And while it ticks off those who still have the unsavory habit, the rest of the public can be smug and say "it's for your own good" and create or raise a tax.

So we have cigarette taxes and alcohol taxes and even the tanning tax because of the skin cancer dangers posed by ultraviolet light.

The problem, from a policy perspective, is that even when the science backs up the taxes, and sometimes it doesn't, the levies don't really change habits.

I used to smoke cigarettes. A lot of them -- two-plus packs a day. I bought them by the carton because it was cheaper than the per-pack price, but that was the only financial consideration I gave to my nicotine habit.

The tobacco taxes didn't matter to me one whit. I finally stopped because the hubby hated my nasty habit. And if he ever trades me in for a trophy wife, when I get all his money in a favorable divorce settlement, I'll start spending some it on cigarettes again because, despite all reason, I enjoyed smoking.

True, higher prices caused partly by increased taxes will prompt some people to stop engaging in a bad activity. If they do, good.

But let's be honest. The government really doesn't care. What it wants is the tax money. If it loses some tax dollars from people stopping a bad habit, it will make up the difference with the higher levy on those who keep it up and it's a wash.

The people wagging their fingers and nagging are happy because the folks with bad habits are being punished by higher taxes. Lawmakers are happy because they get to approve a tax that won't cost them their jobs. And state treasurers are happy because they keep getting money.

Now if we could only figure out a way to tax self-righteousness, every government would be rolling in dough.

Have taxes ever stopped you from making any kind of purchase?

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11 Comments
Scott
November 02, 2011 at 10:31 am

too bad we can't tax stupidity, then the liberals could fund themselves! Seriously, governments the world over have an addiction to spending, and in many cases, spending on stupid projects they have no business messing with. And don't even get me started on waste. I think the government should get their own house in order before they start telling me how I need to live my life for the benefit of others.