Ahmed: The downsides of health-related taxes

By Abdul-Kareem Ahmed

Denmark, the country with the highest tax rates in the world, welcomed a new addition to its… Denmark, the country with the highest tax rates in the world, welcomed a new addition to its legislative tomes a few weeks ago: the fat tax. Officials could not be reached for comment, but the prince of Denmark did offer this: “Though this be madness, yet there is method in ’t.” Indeed, the tax promises to solve Denmark’s obesity problem, if not Hamlet’s problem.

Whether it can deliver on the former front, however, is dubious.

The tax, which went into effect on Oct. 1, gauges the percent of saturated fat in foods, with the current rate of $3 for every 2.2 pounds of fat. According to BBC, some Danes were sent scrambling to stock up last-minute on fatty products, while others began crying bloody bureaucracy.

Before we address the merits of this plan, however, it should compel us to reflect on our own problems. Only 10 percent of Danes are obese, compared to 33 percent of Americans, according to The Washington Post. Should we have a fat tax? No lobby or political group seems to think so, at least for the moment.

We have, however, considered a soda tax. Last year, Philadelphia’s Mayor Michael Nutter proposed a 2 cents-per-ounce tax on sugar-sweetened beverages. The underlying idea was to decrease obesity rates and use the revenue to implement relevant health programs. The proposal failed. Duke University researcher Eric Finkelstein later reported that the tax would not have been effective for high and low income households. Low income households, he said, often buy alternatives to soda, and high income households can afford the tax. Even a 20 or 40 percent tax on sugar-sweetened beverages would not affect caloric intake because most people would switch to untaxed, equally caloric beverages.

Despite the research, however, 33 states still uphold the tax — suggesting America is hardly unreceptive to regulating public health.

Now in case the fat tax gains traction, here’s the three questions I believe it raises: First, is it too invasive? Second, will it even work? And finally, is it the best method?

A fat tax is government control, no matter how you look at it. And most people will likely respond to it based on their political orientation. My concern, however, is with the precedent it sets. A large portion of legislation is based on precedents, or previous similar decisions, and a fat tax might set a bad one. With technology advancing at such a fast pace, it would not surprise me if a tracking system were soon established that can determine how much we exercise. Using it could possibly earn us fat credits we could use to buy regularly priced goods (excuse the inanity). Putting something like that into legislation is much easier when you already have measures like the fat tax.

A more important question, however, is whether this legislation will even work. If the soda tax has taught us anything, at least one large income group will probably remain unaffected. Also, people might start ordering fatty items in bulk from foreign sources or getting fat calories some other way. Everyone will invariably get around it somehow. It is possible, as with the soda tax, that it could raise revenue, but that’s probably the extent of its utility. The modest funds would have to be spent wisely.

We should also question whether this is the best approach to health problems. What the tax in Denmark does is single out saturated fat as a leading cause of obesity. The government and whoever its scientific advisor is has decided this, in the face of debate. In fact, it’s not at all clear whether saturated fat has a direct link with obesity, or whether other nutrients aren’t as deleterious to health. Does singling out one nutrient do the trick, as the soda tax singled out sugar? It seems like that decision will readily be made for us, whether or not it agrees with the science.

A better approach would be a more holistic one, and not because holistic sounds fancy. That means using all the research compiled by scientists over so many decades to its full extent. Before enacting any legislation, if any at all, let scientists reach some sort of consensus. Let us be certain that saturated fat is the only root of obesity. Of course, I’m no policymaker, but I’d advocate the idea of pursuing health independently. It is our individual responsibility to keep ourselves fit. We cannot always depend on Big Brother to make wise decisions for us. We should not so readily relinquish control of our own diet.

Health research is usually concerned with improving our quality of life. The public can surely benefit from its discoveries, but exactly how the gap between discovery and application is bridged is a question for future leaders to answer. Using taxes as the reassuring arm between science and the public just doesn’t seem like the best method. We’ll just have to see whether this tax turns foul in Denmark.