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Cut the "fat tax"

Author: Scott Hennig 2005/12/28
Calgary Health Region CEO Jack Davis recently mused that Alberta should take the bull by the horns and take action to encourage healthy living. Unfortunately, his idea of encouragement came in the form of a new "fat tax" on unhealthy foods. Apparently, the threat of severe obesity, heart disease, diabetes, and death is not nearly enough encouragement for the great unwashed masses.

Mr. Davis has some company in his suggestion to increase taxes for our own good. The Centre for Science in the Public Interest (CSPI) recently lobbied the House of Commons Finance Committee for a national tax on unhealthy foods. This is the same group of social engineers who lobbied the feds to increase taxes on companies advertising unhealthy foods, force companies to provide health-food cafeterias for their workers, and finally, reduce government funding for those TV shows that teach children to count using lollipops and ice-cream cones.

Of all of their bad ideas, a "fat tax" is one of the worst. For one, what is healthy today might not be healthy tomorrow. What happens when the government decides not to tax a food that is eventually shown to cause cancer Are taxpayers are going to be on the hook to pay the damages

Second, it would be a bureaucratic nightmare to administer. Who would determine what is healthy and what is not Just because I buy a lean chicken breast doesn't mean I'm not going to take it home, cover it in batter, deep fry it, and then roll it in sprinkles. Further, eating an extreme amount of any food, even healthy foods can be detrimental. It's unlikely most Albertans would consider white rice an unhealthy food and a candidate for the "fat tax", yet those individuals who eat white rice every day as a significant portion of their diet have a very good chance of developing type 2 diabetes. So should there be a tax on white rice Perhaps the "food police" might allow you to guarantee in writing that you will only eat it every once in a while and not every day to avoid paying the tax

Third, it would be a regressive tax. Not surprising, studies in the US have shown a link between socioeconomic status and obesity. Further studies show a link between education and socioeconomic status. Basically, the less education you have, the more likely you will have a lower income, and the more likely you are to eat fatty and unhealthier foods.

Low-income individuals don't choose fatty fast foods because they always want to; they chose them because they are most affordable, as fatty foods are significantly less expensive than healthy foods. Just like Alberta's health care premiums a "fat tax" would adversely impact low income earners the most.

It's questionable public policy to think making the poor even poorer will somehow help them become healthier. If anything, leaving low income earners with more money in their wallets will provide them more choices, including healthier foods.

The marketplace is responding, without government forcing its hand. There's hardly a city block or a town square that doesn't have a gym or health food store on it. Heck, even fast food outlets are responding with healthier menu options.

Surely a "fat tax" with all its tax-funded bureaucracy, increased compliance costs for businesses and higher prices for consumers is a non-starter. And despite its good intention, will likely make the problem of obesity even worse.

If the Calgary Health Authority wants to invent a new tax, they should introduce a "bad ideas tax". And they should start with this one, it's a gold mine.


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