Taxing Obesity, Pro and Con

Taxing obesity is an idea that has been bouncing around in health policy forums for more than a decade. When fat was seen as the villain, a “fat tax” was the catchphrase of the day. Then Denmark implemented a tax on fatty foods that went down in flames after less than a year. The “fat tax” catchphrase faded into oblivion.

Now that sugar is the villain, taxes on sugar or sugar-sweetened beverages (SSBs) are the focus. Efforts in the U.S. to implement taxes on SSBs have yet to get traction. But Mexico is in the midst of implementing one. Hungary is well into its experiment with taxing junk foods. And health policymakers in Britain seem intent upon enacting a sugar tax, with plenty of encouragement from an advocacy organization, Action on Sugar.

Some of the key rationales for these taxing strategies are:

  1. Rational Economic Incentives. Economic analysis suggests that well constructed taxes could incent healthier choices and result in significant reductions in calories of foods thought to contribute to obesity.
  2. Regulation of Harmful Substances. As people build a case for the harm of excessive sugar consumption, they draw parallels to the regulation of other harmful substances to protect public health.
  3. Existing Subsidies. Tax and subsidy policies already exist and promote unhealthy dietary patterns. The proposals are to reform these incentives that no longer serve the public interest.

Tax strategies to address obesity have a few issues that their detractors highlight:

  1. Substitution. Experience with food taxes has shown that narrow taxing strategies can lead to substitution of other foods that cancel out any health benefit.
  2. Regressive Effects. Food taxes can place a disproportionate burden on lower income households.
  3. Public Resistance. The experience in Denmark provides vivid evidence that policy without public support will not stand. Such setbacks can poison the environment for subsequent efforts.

On both sides of this argument lie some interesting ideas, but the fact remains that the evidence is thin — and that’s a generous assessment. But these policies are already being tried in some places. Others may follow. Experience and data from these places can provide insight into what works and what doesn’t.

The real shame will come if this opportunity to build an evidence base for effective policies is neglected.

Click here to read more about the push for a sugar tax in Britain, here for an economic analysis of childhood obesity, here for more on differential effects of tax strategies on different income groups, here for more on the potential impact of an SSB tax, and here for more on taxing specific foods or nutrients.

Opium Tax Stamp, photograph © C Smith / flickr

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