Denmark’s fat tax: Is America next?


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Denmark stirred up a big pot of controversy last Saturday when its “fat tax” went into effect, leaving the rest of the world consuming this news and weighing in on whether or not the legislation was the best solution to the country’s health problems. Most importantly, it has all of us in the world’s most obese nation asking, “Are we next?”

The fat tax facts
With the new fat tax — believed to be the first in the world — Danes are being taxed 16 Danish kroner per kilogram of saturated fat in foods with a saturated fat content that exceeds 2.3%. In American, this translates to $1.29 per pound of saturated fat. And it’s a little more complicated than that: It’s the amount of fat used in the PRODUCTION of a particular food, not the amount that’s in the final product, that counts, according to Ole Linnet Juul, food director at Denmark’s Confederation of Industries.

Interestingly, the purpose of the fat tax was not to decrease obesity rates; Denmark’s obesity rate of 13.4% is substantially less than the 15.5% European rate. (Now that you have that lovely point of reference, here’s the United States obesity rate: 33.8%. Disgusted yet?) Instead, the country aims to increase the average lifespan of its citizens by three years over the next decade, according to the Los Angeles Times. And this isn’t the first time Denmark’s Food Police have taken action: Denmark has already banned the use of trans fats and placed taxes on sugary foods like soda and candy.

Why would the U.S. consider a fat tax?
Meanwhile, Americans are pulling their cars up to McDonald’s drive-throughs and getting their greasy piles of saturated fat for $1. There’s no nice way to spin it: If America was represented by one of the characters in the movie “Se7en,” we would be the dude Kevin Spacey left dead in a bowl of spaghetti. And in reality, gluttony is leaving Americans dead too. One out of every eight deaths in America is caused by an illness directly related to overweight and obesity, according to the Office of the Surgeon General, which is no surprise since two out of three American are obese or overweight.

And sure, you can say, “It’s my life. If I want to eat myself to death, I’m gonna.” The only problem with this theory is that it’s costing the rest of us billions of dollars in health care. According to the Centers of Disease Control and Prevention, healthcare spending went up by $40 billion a year when obesity rates increased from 18.3% of Americans in 1998 to 25% in 2006. Don’t believe obesity was to blame? Here’s more: According to the Congressional Budget Office, more than one-quarter of increased medical costs between 1987 and 2001 involved obesity-related expenditures.

Skinny people are paying the price too — and not just through taxes. If you get your insurance through your employer, obesity is increasing your health insurance by an average of $150 a year in 1998 dollars, according to a report from the Stan Dorn Urban Institute. That’s $150 a year that we’re paying for those who choose to eat unhealthily.

But would the fat tax really help?
The number of adults who smoked decreased by a whopping 22.6% between 1965 and 2007. The United States must have done something right. What if we formulated an action plan for obesity similar to the one we instigated for tobacco? This is exactly what the July 2009 Stan Dorn Urban Institute report “Reducing obesity: Policy strategies from the tobacco wars” suggests.

Just as cigarettes were taxed, so too would fattening foods. Here’s the report’s rationale behind this strategy:

  1. We won’t eat as much crap. A 2009 Institute for Health Research and Policy study found that increasing the price of sugared sodas by 10% could cut consumption by an average of 8%.
  2. The government can get some money to help us out. A penny-per-ounce tax on sugary soda would raise $10 billion a year, which could then be put toward that pricey healthcare reform we keep talking about, as well as support anti-obesity efforts.
  3. To get the message across. The report even suggests including warning labels on particularly unhealthy taxed foods, although I sincerely hope they wouldn't include photos as gross as the ones expected to be slapped on cigarette packs next year.
  4. For financial fairness. The purchasers of fatty foods — which is all of us really, but the obese and overweight purchase them more frequently — would be paying for the obesity-related healthcare costs that are currently financed by taxpayers, employers that pay insurance premiums and workers whose wages are reduced to compensate for those higher premiums.

Potential problems of a fat tax

  1. Dunkin Donuts is cheaper than Whole Foods. You may have already picked up on this problem with a fat tax. If you only had $5 for food for your hungry family, you might frequent that Dollar Menu, or buy some doughnuts, or maybe a few slices of pizza. Fatty food tends to be cheaper than healthy food, which could hurt low-income households who can’t afford to feed their families healthy food.
  2. Those damn food deserts. Not everyone has access to affordable, healthy food. According to a USDA analysis, only 5.4% of American households live more than a half-mile away from a grocery store and do not own a car.

But wait! A solution!

We can probably all agree that healthy food needs to be cheaper. But where are we going to get the money to subsidize it? Hmm … Think. … Think a little harder. … Oh right! We’ve got that sweet fat tax money! If the United States used some of the money obtained from a fat tax to reduce the cost of healthy food and improve access to healthy, affordable food in low-income communities, this plan might actually work. Specifically, the “Reducing obesity” report suggests reforming agriculture policy to reduce subsidies for products that contribute to obesity and increase subsidies for healthy food, as well as help farmers transition from obesity-inducing crops to more health-promoting ones.

So what do you think?

A national poll found that 53% of Americans said yes to an increased tax on sodas and sugary soft drinks in order to help pay for healthcare reform, according to the Los Angeles Times. Among the other 47%, 63% said they would change their minds and support a fat tax if it would also tackle overweight-related problems.

What about you? We want to know what you think. Leave your comments below!