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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
BG
November 02, 2011 at 8:44 am

Whether or not they care for your well-being is irrelevant. You will still expect them to pay for your health problems created by these products when you aren't able to.

Steve Jarrett
October 09, 2011 at 11:23 am

I agree with LG for the same reason I disagree with Brian and Kevin. What they don't realize is that the gov't is always looking for ways to tax us rather than to stop stealing our money because they can, and they don't show any concern for wasting other people's money. If you want to see the gov't have more revenue, you are free to write them a check. Most politicians do not serve the interest of the public anymore (if they ever did), especially the liberal ones. They just want to patronize the masses and stay in office as long as they can, while appealing to special interests. Meanwhile, the Federal Reserve is running us deeper in the hole printing more money. It seems to me that all the gov't has to do these days is print their money rather than tax us to death. Let the gov't self-destruct if it wants to, and let the private sector pick up the slack. This is what has been happening since 1913 anyway. Woodrow Wilson became the first Obama when he orchestrated the 16th Amendment which created the IRS.

PAW
October 09, 2011 at 10:12 am

UH! We Coloradoans we skinny BEFORE Gov. Bill "Tax Man" Ritter shoved this down our throats. It was just one of MANY new taxes or fees he implemeted. Funny, he didn't run for re-election?!?!

Nikki
October 09, 2011 at 9:53 am

It also has the highest suicide rate....

Brian
October 09, 2011 at 8:49 am

So when you dig into your second pack of cigs, do you ever stop and think about who'll pay for the chronic, debilitating illness your likely to get? Are you independently wealthy (to the tune of hundreds of thousands of dollars a year until the day you die)? I think we should tax your sox off when you start smoking again, and not because I'm self-rightous.The cost of these habits to society in the form of lost productivity and chronic illness is staggering. It's hitting me personally as well. I pay about a quarter of my income each month on health insurance for my family and I, yet very little of it goes toward our actual health care. Most of my premiums are paying for the chronic illnesses of other, many of them no doubt the result of their bad habits. I say, tax away and apply it toward easing the burden on the rest of us.

LG
October 09, 2011 at 8:46 am

The only problem with sin tax is there is no angel non-tax for the other side. If you want to eat healthy foods, you are going to pay through the roof for these items. Organic produce and even healthier packaged foods are far more expensive than their "average" counterparts. This is nothing more than a source of revenue, as the author said--there is no care for the health of others in this at all.

MRDC1701
October 09, 2011 at 8:38 am

Anyone who ever thought that raising cigarette taxes caused anyone to quit smoking is clearly delusional AND someone who never smoked. If you've ever smoked, you know that you will come up with the money. And no one has ever quit for anyone but themselves. They try, and it might last for a little while, but if you quit for anyone but yourself, and the fear of the BIG C, it won't last For the politicians, it's all about the tax money. We've seen it coming for a long time. You have to pick on a minority, so that you can still get re-elected. Now that we've taxed the heck out of the smokers, it's time to zero in on another minority. Fat people.
(BTW, I am an ex-smoker, a fat person, I work out, and ride my bike several times a week.)

Cleopathra
October 09, 2011 at 8:30 am

The extra cents taxes does not stop people from buying sodas and candies. People who drink soda and eat candy, and love it have it and who want it bad enough, those kind of people are going to get it regardless of how much extra tax it is. People need it realize its not the eating of candy or drinking of soda that's the only problem, its the not exercising and not eating health with it that is the problem. Dont blame the sodas and the candies for people being fat cause the candies and the sodas didnt put a gun to the people's head for them to eat and drink them.

Kevin
October 07, 2011 at 8:05 am

You are right that the government is primarily concerned about money, but wrong in that they don't care if people quit. The government has to take taxes somehow, so it makes sense to tax people for behaviors that cost the government more money.

ie If you raise income tax by a dollar it generates just slightly less than a dollar of revenue for the government, but if you raise taxes on cigarettes a dollar it generates more than a dollar because it makes some people cut down or quit, and that lowers what the government has to pay out via Medicare and Medicade. It has the added benefit that the populace is more healthy.

Wolverine
October 07, 2011 at 7:15 am

Don't smoke. Don't drink soda. Don't eat candy. Don't eat almost any processed foods. So, if they want to tax that, they can go on right ahead. None of that stuff is good for anyone.

But, like you said, I won't pretend the government "cares" about my well-being... they clearly don't.