Fat tax
Encyclopedia
A fat tax is a tax
or surcharge
that is placed upon fattening foods, beverages or individuals. As an example of Pigovian tax
ation, a fat tax aims to discourage unhealthy diets and offset the economic costs of obesity.
A fat tax aims to decrease the consumption of foods that are linked to obesity
. A related idea is to tax foods that are linked to increased risk of coronary heart disease
, such as the main dietary sources of saturated fat
or salt. Numerous studies suggest that as the price of a food increases, consumption of that food decreases. In fact, eating behavior may be more responsive to price increases than to nutritional education. Estimates suggest that a 1 cent per ounce tax on sugar-sweetened beverages may reduce the consumption of those beverages by 25%. However, there is also evidence that obese individuals are less responsive to changes in the price of food than normal-weight individuals.
To implement a fat tax, it is necessary to specify which food and beverage products will be targeted. This must be done with care, because a carelessly chosen food tax can have surprising and perverse effects. For instance, consumption patterns suggest that taxing saturated fat would induce consumers to increase their salt intake, thereby putting themselves at greater risk for cardiovascular death. Taxation of sodium has been proposed as a way of reducing salt intake and resulting health problems. Current proposals frequently single out sugar-sweetened drinks as a target for taxation. Cross-sectional, prospective, and experimental studies have found an association between obesity and the consumption of sugar-sweetened drinks. However, experimental studies have not always found an association, and the size of the effect can be very modest.
Since the poor spend a greater proportion of their income on food, a fat tax might be regressive
. Taxing foods that provide primarily calorie
s, with little other nutritional value reduces this problem, since calories are readily available from many sources in diet of industrialized nations. To make a fat tax less burdensome for the poor, proponents recommend earmarking the revenues to subsidize healthy foods and health education. Additionally, proponents have argued that the fat tax is less regressive to the extent that it lowers medical expenditures and expenditures on the targeted foods among the poor. Indeed, there is a higher incidence of diet-related illnesses among the poor than in the general population.
Unlike placing restrictions on foods or ingredients, a fat tax would not limit consumer choice, only change relative prices.
suggested levying a fee on each pound of overweight, both to counter an "injurious luxury" and to make more food available for the war effort. The concept was reintroduced by Milton Merryweather and P. Franklin Alexander in the late seventies, but became well known in the early 1980s by Kelly D. Brownell
, director of the Rudd Center for Food Policy and Obesity at Yale
. Brownell proposed that revenue from junk-food taxes be used to subsidize more healthful foods and fund nutrition campaigns.
In a 1994 Op-Ed in the New York Times, Brownell noted that food costs were out of balance, with healthy foods costing more than unhealthy ones. The New York Times Op-Ed piece that proposed the "fat tax" elicited controversy and outrage nationwide. Author Kelly Brownell became the focal point of this controversy, especially from Rush Limbaugh
, who spoke out adamantly against the tax and the general principle of governmental intrusion into food choices and a possible invasion of privacy. This argument holds true for all taxation, including taxes on fuel, tobacco, alcohol and earned income. It not clear why taxation of foodstuffs is a special case when it comes to taxation. Brownell’s proposal was listed as number seven on the list of U.S. News & World Report's "16 Smart Ideas to Fix the World." Because of this and other work, Brownell was named by Time Magazine as one of the "World's Most Influential People." In 2000 a paper in the British Medical Journal
outlined the potential impact on deaths from ischaemic heart disease of a tax on the main sources of saturated fats. .
In December 2003, The World Health Organization
proposed that nations consider taxing junk foods to encourage people to make healthier food choices. According to the WHO report, "Several countries use fiscal measures to promote availability of and access to certain foods; others use taxes to increase or decrease consumption of food; and some use public funds and subsidies to promote access among poor communities to recreational and sporting facilities."
Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest
, said his nonprofit nutrition advocacy organization welcomed the recommendations and has spent years fighting for measures like a Junk Food Tax. The proposal got even more traction when New York Assemblyman Felix Ortiz proposed taxes on junk food and entertainment contributing to sedentary lifestyle
s to fund nutrition and exercise programs. It should also be remembered that taxing foodstuffs is not an argument for increasing taxation. Other taxes can be reduced commensurately it the overall objective is to keep the tax take neutra. The fat tax is an argument for raising taxes on activites that we prefer to discourage (consumption of certain foodstuffs) rather than raising taxes on socially desirable activies. Therefore opponents of this type of taxation must identify which taxes are preferable to taxing these foodstuffs.
Other advocates of the tax point to the effect taxes have had on alcohol
and tobacco
use. Five studies published between 1981 and 1998 found that drinking declined as the price of alcohol increased. The same holds for tobacco. In California in 1988, Proposition 99 increased the state tax by 25 cents per cigarette pack and allocated a minimum of 20% of revenue to fund anti-tobacco education. From 1988 to 1993, the state saw tobacco use decline by 27%, three times better than the U.S. average.
Japan implemented a measurement of waist sizes during 2008 to help avoid the obesity epidemic confronting the United States. The New York Times wrote: "To reach its goals of shrinking the overweight population by 10 percent over the next four years and 25 percent over the next seven years, the government will impose financial penalties on companies and local governments that fail to meet specific targets. The country’s Ministry of Health argues that the campaign will keep the spread of diseases like diabetes and strokes in check." The average male waist size in Japan is smaller than the average in the U.S.
A CBS News poll from January 2010 reported that a tax on items such as soft drinks and foods considered to be junk food, is opposed 60% to 38%. An even larger number, 72% of Americans, also believed that a tax would not actually help people lose weight. While a February 2010 poll by Quinnipiac University
found that New York
residents overwhelmingly favor a soft drink tax, with 76 percent wanting the tax, and 22 percent opposing it. The poll found both Republicans and Democrats favor the tax. However it should be remembered that the question of whether or not taxation influences diet is an empirical question and not simply a matter of public opinion.
In October 2011, Denmark
introduced a fat tax on butter, milk, cheese, pizza, meat, oil and processed food if the item contains more than 2.3% saturated fat..
Also in October, British prime minister David Cameron
told reporters that his government might introduce a FAT tax as part of the solution to Britain's obesity problem.
s and pizza
can decrease the amount of calories that people consume from these foods. The study found that a 10 percent tax on soda
led to a 7 percent reduction in calories from soft drinks, and a 10 percent tax on pizza led to a 12 percent reduction in calories from pizza. These researchers believe that an 18 percent tax on these foods could cut daily intake by 56 calories per person, resulting in a weight loss of 5 pounds (2 kg) per person per year. The study followed 5,115 young adults ages 18 to 30 from 1985 to 2006.
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
or surcharge
Surcharge
A surcharge may mean:*an extra fee added onto another fee or charge** Fuel surcharge, sky freight charges which represents additions due to jet fuel prices.** Bunker adjustment factor, sea freight charges which represents additions due to oil prices....
that is placed upon fattening foods, beverages or individuals. As an example of Pigovian tax
Pigovian tax
A Pigovian tax is a tax levied on a market activity that generates negative externalities. The tax is intended to correct the market outcome. In the presence of negative externalities, the social cost of a market activity is not covered by the private cost of the activity...
ation, a fat tax aims to discourage unhealthy diets and offset the economic costs of obesity.
A fat tax aims to decrease the consumption of foods that are linked to obesity
Obesity
Obesity is a medical condition in which excess body fat has accumulated to the extent that it may have an adverse effect on health, leading to reduced life expectancy and/or increased health problems...
. A related idea is to tax foods that are linked to increased risk of coronary heart disease
Coronary heart disease
Coronary artery disease is the end result of the accumulation of atheromatous plaques within the walls of the coronary arteries that supply the myocardium with oxygen and nutrients. It is sometimes also called coronary heart disease...
, such as the main dietary sources of saturated fat
Saturated fat
Saturated fat is fat that consists of triglycerides containing only saturated fatty acids. Saturated fatty acids have no double bonds between the individual carbon atoms of the fatty acid chain. That is, the chain of carbon atoms is fully "saturated" with hydrogen atoms...
or salt. Numerous studies suggest that as the price of a food increases, consumption of that food decreases. In fact, eating behavior may be more responsive to price increases than to nutritional education. Estimates suggest that a 1 cent per ounce tax on sugar-sweetened beverages may reduce the consumption of those beverages by 25%. However, there is also evidence that obese individuals are less responsive to changes in the price of food than normal-weight individuals.
To implement a fat tax, it is necessary to specify which food and beverage products will be targeted. This must be done with care, because a carelessly chosen food tax can have surprising and perverse effects. For instance, consumption patterns suggest that taxing saturated fat would induce consumers to increase their salt intake, thereby putting themselves at greater risk for cardiovascular death. Taxation of sodium has been proposed as a way of reducing salt intake and resulting health problems. Current proposals frequently single out sugar-sweetened drinks as a target for taxation. Cross-sectional, prospective, and experimental studies have found an association between obesity and the consumption of sugar-sweetened drinks. However, experimental studies have not always found an association, and the size of the effect can be very modest.
Since the poor spend a greater proportion of their income on food, a fat tax might be regressive
Regressive tax
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the...
. Taxing foods that provide primarily calorie
Calorie
The calorie is a pre-SI metric unit of energy. It was first defined by Nicolas Clément in 1824 as a unit of heat, entering French and English dictionaries between 1841 and 1867. In most fields its use is archaic, having been replaced by the SI unit of energy, the joule...
s, with little other nutritional value reduces this problem, since calories are readily available from many sources in diet of industrialized nations. To make a fat tax less burdensome for the poor, proponents recommend earmarking the revenues to subsidize healthy foods and health education. Additionally, proponents have argued that the fat tax is less regressive to the extent that it lowers medical expenditures and expenditures on the targeted foods among the poor. Indeed, there is a higher incidence of diet-related illnesses among the poor than in the general population.
Unlike placing restrictions on foods or ingredients, a fat tax would not limit consumer choice, only change relative prices.
History
In 1942 U.S. physiologist A. J. CarlsonA. J. Carlson
Anton Julius Carlson was a Swedish American physiologist. Carlson was Chairman of the Physiology Department at the University of Chicago from 1916 until 1940.-Biography:...
suggested levying a fee on each pound of overweight, both to counter an "injurious luxury" and to make more food available for the war effort. The concept was reintroduced by Milton Merryweather and P. Franklin Alexander in the late seventies, but became well known in the early 1980s by Kelly D. Brownell
Kelly D. Brownell
Kelly D. Brownell is an American scientist, professor, and internationally renowned expert on obesity. Brownell is Director of the Rudd Center for Food Policy and Obesity at Yale, where he is also Professor of Psychology and Professor of Epidemiology and Public Health...
, director of the Rudd Center for Food Policy and Obesity at Yale
Rudd Center for Food Policy and Obesity at Yale
The Rudd Center for Food Policy and Obesity is a non-profit research and public policy organization devoted to improving the world’s diet, preventing obesity, and reducing weight stigma. Located in New Haven, Connecticut at Yale University, the Rudd Center was co-founded in March 2005 by benefactor...
. Brownell proposed that revenue from junk-food taxes be used to subsidize more healthful foods and fund nutrition campaigns.
In a 1994 Op-Ed in the New York Times, Brownell noted that food costs were out of balance, with healthy foods costing more than unhealthy ones. The New York Times Op-Ed piece that proposed the "fat tax" elicited controversy and outrage nationwide. Author Kelly Brownell became the focal point of this controversy, especially from Rush Limbaugh
Rush Limbaugh
Rush Hudson Limbaugh III is an American radio talk show host, conservative political commentator, and an opinion leader in American conservatism. He hosts The Rush Limbaugh Show which is aired throughout the U.S. on Premiere Radio Networks and is the highest-rated talk-radio program in the United...
, who spoke out adamantly against the tax and the general principle of governmental intrusion into food choices and a possible invasion of privacy. This argument holds true for all taxation, including taxes on fuel, tobacco, alcohol and earned income. It not clear why taxation of foodstuffs is a special case when it comes to taxation. Brownell’s proposal was listed as number seven on the list of U.S. News & World Report's "16 Smart Ideas to Fix the World." Because of this and other work, Brownell was named by Time Magazine as one of the "World's Most Influential People." In 2000 a paper in the British Medical Journal
British Medical Journal
BMJ is a partially open-access peer-reviewed medical journal. Originally called the British Medical Journal, the title was officially shortened to BMJ in 1988. The journal is published by the BMJ Group, a wholly owned subsidiary of the British Medical Association...
outlined the potential impact on deaths from ischaemic heart disease of a tax on the main sources of saturated fats. .
In December 2003, The World Health Organization
World Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...
proposed that nations consider taxing junk foods to encourage people to make healthier food choices. According to the WHO report, "Several countries use fiscal measures to promote availability of and access to certain foods; others use taxes to increase or decrease consumption of food; and some use public funds and subsidies to promote access among poor communities to recreational and sporting facilities."
Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest
Center for Science in the Public Interest
Center for Science in the Public Interest is a Washington, D.C.-based non-profit watchdog and consumer advocacy group focusing on nutritional education and awareness.-History and funding:...
, said his nonprofit nutrition advocacy organization welcomed the recommendations and has spent years fighting for measures like a Junk Food Tax. The proposal got even more traction when New York Assemblyman Felix Ortiz proposed taxes on junk food and entertainment contributing to sedentary lifestyle
Sedentary lifestyle
Sedentary lifestyle is a medical term used to denote a type of lifestyle with no or irregular physical activity. A person who lives a sedentary lifestyle may colloquially be known as a couch potato. It is commonly found in both the developed and developing world...
s to fund nutrition and exercise programs. It should also be remembered that taxing foodstuffs is not an argument for increasing taxation. Other taxes can be reduced commensurately it the overall objective is to keep the tax take neutra. The fat tax is an argument for raising taxes on activites that we prefer to discourage (consumption of certain foodstuffs) rather than raising taxes on socially desirable activies. Therefore opponents of this type of taxation must identify which taxes are preferable to taxing these foodstuffs.
Other advocates of the tax point to the effect taxes have had on alcohol
Alcohol
In chemistry, an alcohol is an organic compound in which the hydroxy functional group is bound to a carbon atom. In particular, this carbon center should be saturated, having single bonds to three other atoms....
and tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
use. Five studies published between 1981 and 1998 found that drinking declined as the price of alcohol increased. The same holds for tobacco. In California in 1988, Proposition 99 increased the state tax by 25 cents per cigarette pack and allocated a minimum of 20% of revenue to fund anti-tobacco education. From 1988 to 1993, the state saw tobacco use decline by 27%, three times better than the U.S. average.
Japan implemented a measurement of waist sizes during 2008 to help avoid the obesity epidemic confronting the United States. The New York Times wrote: "To reach its goals of shrinking the overweight population by 10 percent over the next four years and 25 percent over the next seven years, the government will impose financial penalties on companies and local governments that fail to meet specific targets. The country’s Ministry of Health argues that the campaign will keep the spread of diseases like diabetes and strokes in check." The average male waist size in Japan is smaller than the average in the U.S.
A CBS News poll from January 2010 reported that a tax on items such as soft drinks and foods considered to be junk food, is opposed 60% to 38%. An even larger number, 72% of Americans, also believed that a tax would not actually help people lose weight. While a February 2010 poll by Quinnipiac University
Quinnipiac University
Quinnipiac University is a private, nonsectarian, coeducational university located in Hamden, Connecticut, United States at the foot of Sleeping Giant State Park...
found that New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
residents overwhelmingly favor a soft drink tax, with 76 percent wanting the tax, and 22 percent opposing it. The poll found both Republicans and Democrats favor the tax. However it should be remembered that the question of whether or not taxation influences diet is an empirical question and not simply a matter of public opinion.
In October 2011, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
introduced a fat tax on butter, milk, cheese, pizza, meat, oil and processed food if the item contains more than 2.3% saturated fat..
Also in October, British prime minister David Cameron
David Cameron
David William Donald Cameron is the current Prime Minister of the United Kingdom, First Lord of the Treasury, Minister for the Civil Service and Leader of the Conservative Party. Cameron represents Witney as its Member of Parliament ....
told reporters that his government might introduce a FAT tax as part of the solution to Britain's obesity problem.
Scientific research
Taxing soft drinkSoft drink
A soft drink is a non-alcoholic beverage that typically contains water , a sweetener, and a flavoring agent...
s and pizza
Pizza
Pizza is an oven-baked, flat, disc-shaped bread typically topped with a tomato sauce, cheese and various toppings.Originating in Italy, from the Neapolitan cuisine, the dish has become popular in many parts of the world. An establishment that makes and sells pizzas is called a "pizzeria"...
can decrease the amount of calories that people consume from these foods. The study found that a 10 percent tax on soda
Soda tax
A soda tax or soft drink tax is a tax or surcharge on soft drinks. It may focus on sugar-sweetened beverages ....
led to a 7 percent reduction in calories from soft drinks, and a 10 percent tax on pizza led to a 12 percent reduction in calories from pizza. These researchers believe that an 18 percent tax on these foods could cut daily intake by 56 calories per person, resulting in a weight loss of 5 pounds (2 kg) per person per year. The study followed 5,115 young adults ages 18 to 30 from 1985 to 2006.