Obesity epidemic: one variant of the punitive approach
Monday, November 19, 2012 at 10:32AM 
WSJ headline says Denmark scraps it's "much-maligned 'fat tax' after a year."
Danish lawmakers have killed a controversial "fat tax" one year after its implementation, after finding its negative effect on the economy and the strain it has put on small businesses far outweigh the health benefits.
Nations including Switzerland, the U.K, and Germany have held up the tax, which applies to any food containing more than 2.3% saturated fat, as a potential model for addressing obesity and other health concerns. But in Denmark, it has been a source of pain for consumers, food producers and retailers as the nation's economy struggles.
"The fat tax is one of the most maligned we [have] had in a long time," Mette Gjerskov, the minister for food, agriculture and fisheries, said during a news conference Saturday announcing the decision to dump the tax. "Now we have to try improving the public health by other means."
The failure of Denmark's fat tax is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times. Products such as butter, oil, sausage, cheese and cream were subject to increases of as much as 9% immediately after the new tax was enacted.
"What made consumers upset was probably that an extra tax was put on a natural ingredient," said Sinne Smed, a professor at the Institute of Food and Resource Economics.
The fat tax comes to an end after netting an estimated €170 million ($216 million) in 2012 in new revenue. Danish lawmakers will slightly raise income taxes and reduce personal tax deductions to offset the lost revenue. The lawmakers also decided on Saturday to reverse an earlier decision to create a sugar tax.
"This is not what is needed in the current economic situation," said Holger Nielsen, Denmark's minister for taxation.
Human bodies are designed to crave fat, especially when we're stressed. The body is telling us to store up because things seem dangerous. This is evolution talking: if things are going south, better to stockpile fat now for the bad days ahead.
Problem is, modern life creates all sorts of stresses and modern food companies love moving this sort of product, because it nets them the highest profits.
End result: an obesity epidemic. The food companies know how to trigger our interest, and life provides all manner of stimuli that triggers our desire. The cost is pushed downstream.
Governments want cheap food but then regret the healthcare bill that follows. Governments then try to go punitive - actually on the consumer - by issuing a fat tax that the sellers pass on directly. Consumers get mad, tax gets scrapped.
Conservatives yell, "nanny state." But in truth, Western governments already lavish the ag and food industries with subsidies that encourage all this, meaning the nanny state is already here, she's just encouraging us to eat the worst sorts of food (or the most profitable to sellers). In relative terms, veggies and fruits aren't subsidized, grains are. So we're being fatted up by our nanny state for the healthcare providers.
Governments can't disincentivize bad eating by taxing people. They need to rejigger the already bad incentive system for ag and food companies.
Still, the fact that states are trying is an indicator of the progressive agenda that eventually must come.
But Big Food wins another round ("See, the evil government is trying to deny you your bad diet!" Cha-ching!)
agriculture, food, healthcare, progressivism | in Citation Post | Email Article | Permalink | Print Article 
Reader Comments (5)
This is why subsidies to private parties as a principle are a net loss to the citizens of a country, and most times, a long term loss to businesses getting subsidies. The only justifiable subsidy I can think of is a direct welfare subsidy for people in distress and poverty, with strings attached, and graduated, no "welfare trap.". This is an example of your legislators taking money out of your right pocket and putting it into your left pocket.
That's why when it comes to behavior modification, the carrot beats the stick. Make health clubs, bicycles, and vegetables either tax free or deductable. People will resent a tax, a deduction is like a prize.
There is also the issue that attempting to fight obesity by reducing fat rather than carbohydrate intake is choosing sides in a scientific controversy in which the other side seems to have a lot of persuasive evidence.
NY Times science writer Gary Taubes has bee writing on this subject for a few years. His book Good calories Bad Calories is exhaustingly footnoted with reference to scientific studies. His more readable Why We Get Fat makes the same case in a somewhat more user friendly fashion.
His basic point is that uncontroversial research describes the effects of insulin on various body tissues i.e. it causes muscle and fat tissue to take in sugar from the blood but it also causes fat tissue to stop releasing fat and encourages the production of additional fat cells. Insulin is released whenever we eat carbohydrates and often when we even think about them. This was appropriate when we were hunter/gatherers who occasionally encountered fruit or wild grain and needed some stored fat to get through the frequent hard times. It works a bit less well in our current food situation. When very few carbohydrates are eaten, insulin levels drop and fat cells can release some of their stored fat which muscles can burn and the liver can convert to sugar to keep the brain functioning.
The current obesity epidemic in the US dates to around the time that the "food pyramid" encouraged by the US government was redone to encourage a lot more carbohydrates and a lot less fat.
Actually, I would rate this as a win for science over faith. Medically motivated regulations like this deserve the same kind of testing and evaluation as drugs or medical devices.
A few years ago the NIH did a review of over twenty different obesity interventions, looking at diet programs, counseling, exercise, drugs, etc. The NIH was looking for whether the intervention had a statistically significant impact on obesity after 1yr and after 5yrs. The null comparison was the general public results for obese patients with no intervention.
They found that none of the approaches had a statistically significant impact. This is disappointing in terms of reducing public obesity, but clearly indicates that the many different promising ideas are not actually effective. This is not that different from drug trials, where about 90% of promising drugs with initial anecdotal support prove to be ineffective in general use.
Carbohydrates have a better lobby than fats. Also Iowa punches out of its weight class due to the primary.