Denmark, one of Europe’s leanest countries, has instituted the world’s first “fat tax”.
Approved by a large parliamentary majority back in March, Danish consumers now have to pay a 16 kroner ($2.72 USD) tax per kilogram of saturated fat in a product.
This means that Danes have to pay $0.15 more for a burger and $0.40 more for a small package of butter.
This is in addition to the higher fees already applied to sugar, chocolates and soft drinks.
Why a Fat Tax?
Officially…these targeted food taxes are part of a larger government plan to increase the life expectancy of Danes by three years over the next 10 years.
“Higher fees on sugar, fat and tobacco is an important step on the way toward a higher average life expectancy in Denmark,” health minister Jakob Axel Nielsen said, because “saturated fats can cause cardiovascular disease and cancer.”
Opponents to the tax say that it is very complex, involving tax rates on the percentage of fat used in making a product rather than the percentage that is in the end-product.
As such, they expect that this new level of bureaucracy will cost Danish businesses about $28 million in the first year.
Do Fat Taxes Work?
Opponents of fat taxes say that there is no proof that fat taxes will:
- Reduce consumption of fatty foods, and/or
- Improve the health and longevity of the Danish citizens
However, considering that fat taxes are a new invention, the opponents don’t know that they won’t work either.
Proponents of fat taxes look at the success of cigarette taxes to lower consumption levels and hope that Danes will be eating healthier and living longer because of this intervention.
However, food is different from tobacco. Smokers can live without cigarettes. No one lives without food.
As well, there is no proof that replacing butter with margarine and a weekly burger with a fish sandwich is going to result in greater longevity.
At the end of the day, neither side can prove their argument…and as a result, what we have here is an experiment. An experiment being watched by governments around the world.
- Governments that are desperate to reduce their healthcare costs.
- Governments that are also desperate to increase tax revenue in order to generate balanced budgets.
And it’s those budget deficits that are going to play a big part in the adoption of fat taxes around the world.
Governments have become dependant on cigarette and alcohol taxes to help stay afloat.
And a nice big fat infusion of tax dollars coming from a pro-health fat tax seems like a real win-win for progressive legislators.