The Fat Taxes Are Coming

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:

  1. Reduce consumption of fatty foods, and/or
  2. 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.

 

5 comments

  1. I’m totally on board with some sort of tax on sugary, fatty foods in the U.S.. Not only would it get our out of control obesity problem under wraps, it’d also cut back on oral health/dental hygiene problems.

  2. I live in Denmark and I am very much against this “sin tax”. Whether or not food is healthy/unhealthy is a far more complicated issue than cigarettes. Just a few decades ago people thought fat was bad. Then they thought saturated was bad while unsaturated was good. Now it is becoming clear that some saturated fats (such as medium chain triglycerides, found in coconuts) are healthy while the wrong ratio of “healthy” polyunsaturated fats like omegas 3 & 6 cause health problems. Who knows what we will discover in the future?

    The situation will not be helped by governments branding individual natural nutrients that have been eaten by humans for thousands of centuries as unhealthy and to be avoided. For an example, look at the bad reputation that eggs now have because “the experts” were afraid of cholesterol. If these sin taxes on foods had been introduced in the 90’s then we’d be paying more for our eggs. Imagine the mess we’d be in if foods were taxed based on cholesterol content – the food industry would be financially encouraged to mess around with their manufacturing processes in order to try and remove cholesterol, or at least change it enough chemically so that it’s legally no longer cholesterol – what horror would we end up with then?

    The same thing happened decades ago when people said butter was unhealthy because of the saturated fat content. What happened? Margarine was invented, along with hydrogenated fat. Yep – good job, food industry!

    Now governments are encouraging more of the same.

  3. Joe, I read somewhere that Denmark also has taxes on candy/junk food already.

    Can you confirm/deny?

  4. My mother-in-law works for the Danish tax office so I thought I would wait until I had spoken to her before I replied.

    Before the fat tax, there were taxes on chocolate and sugar confectionery, coffee and tea, ice cream, nuts and seeds, and mineral water, in addition to the expected taxes on tobacco and alcohol, etc.

    I think it’s ridiculous that nuts and seeds are taxed, presumably for health reasons, but there you have it – government’s don’t need a good reason to take money from their citizens.

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