Denmark Introduces Fat Tax
According to the Washington Post article, Denmark Introduces Fat Tax to Curb Unhealthy Habits, Improve Life Expectancy, 2 October, 2011, Denmarks "fat tax" on foods such as butter and oil is intended to curb unhealthy eating habits, this is in addition to initiatives to tax other unhealthy products such as sugar and soft drinks. The Washington Post piece goes on to note, The Nordic country introduced the tax Saturday, of 16 kroner ($2.90) per kilogram (2.2 pounds) of saturated fat in a product.
In order to justify the tax Danish government officials cite the correlation between fat-heavy diets and cardiovascular disease and cancer. However, its worth noting that the tax will not only make the consumption of fat-heavy foods more expensive, but it will also increase production costs by taxing fats used in creating the products. According to the Washington Post it is estimated that simply garnering the information necessary to pay the tax, not including the tax itself, will cost Danish businesses US$28 million in the first year of the tax's implementation.
As I noted recently, Taxing fast food is a blunt instrument and apart from treating adults like children it diverts attention from the real elephant in the room, which is governments insatiable appetite for raising revenue by any and every means possible. The really unhealthy appetite is to be found in the taxer and not those consumers of fast foods who are threatened with another undeserved so-called sin tax.
Author: Jasson Urbach is an economist with the Free Market Foundation. This article may be republished without prior consent but with acknowledge-ment to the author. The views expressed in the article are the authors and are not necessarily shared by the members of the Foundation.
FMF Policy Bulletin / 11 October 2011
Jasson Urbach is an Economist and director of the Free Market Foundation.
Publish date: 21 October 2011
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.