MOTION#59: THIS HOUSE WOULD
IMPLEMENT A FAT TAX
The WHO reports that
“in 2008 1.5 billion adults, 20 and older, were overweight with a Body Mass
Index (a proxy measurement of body fat based on height and weight) over 25 and
that of these 1.5 billion overweight adults, over 200 million men and nearly
300 million women were obese (BMI > 30). Overall, more than one in ten of
the world’s adult population was reported to be obese. Once considered a
high-income country problem, overweight and obesity are now on the rise in low-
and middle-income countries, particularly in urban settings. Close to 35
million overweight children are living in developing countries and 8 million in
developed countries.”
The WHO notes that
“Overweight and obesity are the fifth leading risk for global deaths. At least
2.8 million adults die each year as a result of being overweight or obese. In
addition, 44% of the diabetes burden, 23% of the ischemic heart disease burden
and between 7% and 41% of certain cancer burdens are attributable to overweight
and obesity.”
Since one of the
factors that contributes to obesity is the inordinate amount of calories
consumed, and given the fact that fats have more than twice as much calories (9
kcal/g) than protein and carbohydrates (4 kcal/g) on a gram basis, could
introducing disincentives to fat consumption curb the obesity epidemic?
We would implement a flat tax on food items high (in excess of 20% of the
daily requirements) on saturated fats, salt and sugar. Hungary did that and introduced
a flat tax on foods high in fat, sugar and salt in the amount of 10 forint
(0.037 EUR) on the 1st of September. Denmark did something similar on the 1st
of October, charging 16 DKK (2.15 EUR) per kg of saturated fat on domestic and
imported food, not including products with saturated fat content fewer than
2.3%. There are similar initiatives and proposals in other EU countries as
well, as well as overseas in the US.
Pros
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Cons
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An individual's BMI is no longer a purely personal
matter. The obesity epidemic is taking an enormous toll on
global medical costs. In the US alone the health care costs attributable to
either direct or indirect consequences of obesity have been estimated at
$147bn. Put into context, this amounts to roughly 9% of the health spending
in the US.
The figure might seem excessive, but we need to
remember that obesity is linked to Type 2 Diabetes, several kinds of cancer,
coronary artery disease, stroke, congestive heart failure, asthma, chronic
back pain and hypertension, to name just a few.
We also need to realize that many of the diseases on
this list are chronic in nature, requiring lifelong pharmacological therapy,
which often follows complex and expensive diagnostic procedures, frequent
medical specialist consultations, and not infrequent emergency interventions.
Adding to the list is the value of income lost due to
decreased productivity, restricted activity, and absenteeism, not to mention
the value of future income lost by premature death.
Thus it becomes increasingly clear that due to the
substantial cost obesity presents to the society, individual choices that
might lead to excessive weight gain, can no longer be considered as solely
individual in nature.
Therefore the government is legitimate in its action to
introduce a form of a fat tax in order to try to dissuade the population from
becoming obese and cover the increasing societal costs the already obese
individuals are responsible for.
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An important source
of extravagant medical spending around the world, especially in the US, can
be traced to inherent inefficiencies of current medical care systems. And the
current trends show the situation to be worsening.
It is thus
impossible for anyone to really say whether the rising cost of the medical
care system can really be attributed to obesity related diseases, especially
since those are some of the most common ailments of the modern age.
It is also unfair to single out obesity as the single
cause that should get such intense scrutiny and attention. What about the
connection between consumption of meat and colorectal cancer? Should we
introduce an additional levy in that case as well?
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There is ample precedent in the form of other “sin”
taxes. A sin tax is a term often used for fees tacked on to
popular vices like drinking, gambling and smoking. Its roots have been traced
back to the 16th century Vatican, where Pope Leo X taxed licensed
prostitutes.
More recently, and with greater success, US federal
cigarette taxes were shown to have reduced consumption by 4% for every 10%
increase in the price of cigarettes.
Given the success achieved with uprooting this societal
vice, which on a number of counts is similar to the unhealthy food one -
immense health costs linked to a choice to consume a product – we should
employ this tried and true strategy to combat the obesity epidemic.
In fact, a recent study published in the Archives of
Internal Medicine followed 5000 people for 20 years, tracking food
consumption and various biological metrics. The report states that
“Researchers found that, incremental increases in price of unhealthy foods
resulted in incremental decreases in consumption. In other words, when junk
food cost more, people ate it less.”
Thus leaning on the successful tradition of existing
“sin” taxes and research that points out the potential for success of a
similar solution in this arena, it should be concluded that a fat tax is an
important part of a sensible and effective solution to the obesity epidemic.
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Choosing to introduce a new policy based on experience
with a different, seemingly similar case, is not a good idea.
Tobacco and fatty food are vastly different things for
a couple of reasons. An obvious one is the fact that fat is in fact necessary
nourishment, even the trans-fat kind. Cigarettes on the other hand have absolutely
no value to a persons’ health – their detrimental impact is quite infamous.
A different one is the importance of dosage. While
smoking is harmful in all doses, indulging in larger amounts of fatty food
isn’t. Consuming what we consider “junk food” in moderation has no ill effect
on health. This results in legislating for any kind of fat tax much more
difficult as the tax needs to allow consuming fat in moderation while
preventing excess.
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A fat tax levels out the playing field for healthier
food. An important reason why people continuously turn to
unhealthy, fat, sugar and salt laden food, is the simple fact that it’s often
cheaper than a more wholesome meal comprised at least in part of fresh
produce.
A study done at the University of Washington found that
“when they compared the prices of 370 foods… junk foods not only cost less…
but junk food prices are also less likely to rise as a result of inflation.”
A similar conclusion was reached by a group of
Australian researchers, who found that the prices of healthy food have risen
20 per cent above inflation, while the harmful counterpart have actually
dropped below inflation – as much as 20 per cent below.
Noting that obesity is more prevalent in groups of
lower socioeconomic status, we find that the price of food is a substantial
incentive for consumption.
Thus it is only reasonable to levy a tax against
unhealthy, fatty food in order to give healthy food a fighting chance.
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While the tax might level out the playing field, it
does so to the detriment of those that would need our protection the most.
Instead of making healthy food more accessible, we
would make all foods less accessible – a truly nonsensical and harmful
situation that we should do our utmost to avoid. Moreover, given that many
individuals in lower socio-economic groups will have become used to eating
“junk” food, when prices rise they will not necessarily move to the healthier
alternative. It is likely that they will stick to what they know, and end up
paying more from their limited budgets for it. The end result is likely to be
that these people will still buy junk food first but will pay more and thus
will not be able to afford any healthier foods.
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Such a limited view of the role of government may be
something we have seen in the past, but even conservative governments today
are warming to the ideas of social support, progressive taxation, etc.
This shows a clear trend that the perception of
government is changing – and rightly so. The challenges of the 21st
century are vastly different from those of a hundred or more years ago, when
that idea of government was popular or mainstream.
Given the very recent and very cataclysmic events
involving the world’s economy, that were arguably sparked by some very bad
financial choices made by consumers, one could think that societies around
the globe would be more than ever inclined to answer yes to those questions.
In fact, what the government is doing in this case is
respecting its boundaries – it cannot ban certain choices of food outright,
although this might be the fastest solution. What it’s doing instead is
providing a disincentive for a certain individually and societally harmful
choice. That sort of action is entirely legitimate, as it doesn’t infringe on
a person’s right to make a certain choice, yet it awards those who make the
socially conscious one and it also protects the society in general from harm,
since it takes important steps to reduce medical spending.
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A fat tax infringes
on individual choice. Introducing such a
tax would constitute an overstepping of the government’s authority. The role
of government in a society should not expand further than providing basic
services such as education, legal protection, i.e. only the services
necessary for a society to function and for the individual’s rights to be
protected.
Such a specific tax
is completely uncalled for and very unreasonable in the context of a fair
society with a government that knows its place in it.
Protecting the
individual should go no further than the protection against the actions of a
third person. For instance: we can all agree that governments should put
measures in place to protect us from thieves, scammers, etc. But should it
also protect us from frivolous spending? Limit us in the number of credit
cards we can own? Tell us how we can invest our money?
Of course not. But
what this tax does is exactly that – it is punishing the citizens for a
specific choice they are making by artificially inflating its cost.
Thus it is clear that levying such a tax against a
specific choice an individual should be able to legitimately make is a clear
overstepping of the government’s authority.
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Even if this policy might cause some families to spend
more on their food – even more than they feel like they can afford – it still
is more important to start significantly dealing with the obesity epidemic.
We feel that nothing short of forcing these low income families – which are
also the ones where obesity is most prevalent – to finally change their
eating habits will make a dent in the current trend.
But there is a silver lining here. These are also the
families that are afflicted most by obesity related diseases. Thus spending a
couple dollars more on food now will – necessarily – save them tens of
thousands in the form of medical bills.
Reducing obesity will also make them more productive at
work and reduce their absenteeism, again offsetting the costs of this tax.
We should look at this tax as a form of paying it
forward – spending a little time and effort now and reap the benefits for the
individual and the society in the future.
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It hits the most
vulnerable part of society hardest. The practical
consequence of an additional tax on what the government considers fatty
unhealthy food will disproportionately affect the poorest part of the population,
who often turn to such food due to economic constraints.
These were the
concerns that stopped the Romanian government from introducing a fat tax in
2010. Experts there argued, that the countries people keep turning to junk
food simply because they are poor and cannot afford the more expensive fresh
produce. What such a fat tax would do is eliminate a very important source of
calories from the society’s economic reach and replace the current diet with
an even more nutritionally unbalanced one. Even the WHO described such
policies as “regressive from an equity perspective.”
Clearly, the government should be focusing its efforts
on making healthy fresh produce more accessible and not on making food in
general, regardless if it’s considered healthy or not, less accessible for
the most vulnerable in our society.
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Though one might be
inclined to agree with the statement, that a fat tax on its own would be
insufficient to solve the problem of rising obesity, it is also simply not
the case.
There are numerous
educational campaigns underway, from celebrity chef Jamie Oliver’s school
dinners to the first ladies ‘Let’s move’ that are effectively targeting that
aspect of the fight against obesity.
What is needed to balance these is tangible action by
the government that is able to underwrite and solidify what these campaigns
are saying. In short, to help our society practice what we preach.
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A tax is not an effective instrument to fight obesity. There are very legitimate concerns whether
artificially increasing the cost of fatty food by specifically targeting it
with a tax would have a significant effect on the obesity trend.
In fact, research shows that a fat tax would produce
only a marginal change in consumption – not the dramatic shift in public
awareness the proponents of the fat tax are hoping for. The reason, LSE
researchers believe, is simple: “those on the very poorest diets will
continue to eat badly.”
Other than the economic reasons for such behavior, it
could be argued that is also a thing of habit and culture: fast fatty food is
quick, accessible and tasty.Thus while a tax might be useful in reducing
things such as the use of cigarettes – which are at heart an unnecessary
“luxury” and thus more easily affected by the price – eating food, whether
junk or not, is necessary. It also seems that the fast fatty kind of food is
fulfilling a specific need, a need for a quick, tasty and filling meal,
something people consider worth paying good money for.
The fight against obesity ought to be multifaceted,
complex and well thought out – and a fat tax is none of those things. We
should approach the issue with more cunning and introduce other programs:
such as increasing the availability of healthy food by introducing healthy
vending machines; increasing the amount of physics exercise by requiring it
in school, improving possibilities for recreation and access to public
transportation thus encouraging people to burn more calories and, most
importantly, proper education on the topic if we want to create lasting change.
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