Our Fat Government:
Why Fat Taxes Are a Bad Idea

Fat taxers.  Think Rudy Ruiz, Mika Brzezinski from Morning Joe, and most latte liberals.  Talk to them for a moment, and they’ll try to convince you that a fat tax will transform Americans from 'triple-decker-McFat-with-cheese' eaters, to marathon-running, tofu-eating, soy-milk drinking health nuts. 

The basic fat tax idea is this: we levy a tax on fatty foods (burgers, french fries, ice cream etc.).  People buy less of them.  Then, we take the tax revenue, and spend it on wellness training.  By simultaneously raising the price of fatty foods and increasing wellness training, citizens become lean, mean, fat-burnin’ machines. 

Call me a skeptic, but I don’t buy it.

Why? Because I like burgers.  A lot.  Particularly with pastrami.  And no $.20 tax would stop me. 

In fact, I love them so much that I wouldn’t even notice a $.20 or $.30 tax.  Would you?  If I did, I would probably grumble, and then order the same triple-decker-pastrami-with-extra-cheese-large-fries-and-a-milkshake (and a Diet Coke) that I always do. 

In economics language, demand is more inelastic than that.  Of course, this problem is solved by making the tax bigger—like $4 or $5.  Americans might actually change their eating habits then.  But they’d also get real mad.

Some of us think that fighting the wrath of angry burger-munchin’ protesters (not to mention the ire of suppliers and their attendant lobbies) isn’t the wisest way to spend our political capital.

More importantly, if we eliminated burgers from the American diet, would people be healthier?  If we overcame the political obstacles, and were able to enforce a massive tax on fatty foods, would that really translate into regular exercise and other healthy habits? Doubtful. 

Philosophically speaking, there are many who don’t like fat taxes because it isn’t the purpose of government to save us from ourselves.  If people decide to eat too many hamburgers, or smoke, or make foolish decisions, many feel that it is their right to make bad decisions—so long as it doesn’t infringe on the rights of others.

All of this suggests that fat taxes would do little good, and maybe some bad.  But there is (pardon the pun) a bigger issue here.  The reason why conservatives don’t like fat taxes is because they feel like Americans aren’t the only ones that need to tighten the belt.

Cutting the fat is just as important for the government as it is for its citizens.  The federal government (leaving out state and local spending) is currently eating 28.1% of GDP per year—that’s up 51.6% from 10 years ago.  Meanwhile, taxes have been about stable—roughly 18% of GDP—for the better part of the last 50 years.  Compared to the past, we are overspending, not undertaxing.

It should be noted that the proponents of fat taxes aren’t talking about tax reform—they’re talking about tax expansion.  Sometimes people say that fat taxes are economically more efficient than other taxes—which is fine, but fat-taxers are talking about adding taxes, not substituting them.  Some of the people who encourage fat taxes do so because they want a better country; politicians are doing so because they need to finance their ridiculous spending projects, like bailouts, Fannie Mae, and the ‘repopulate-the-fluffy-bunny-initiative.’

Then there is the question of “how-to-not-get-fat-classes” or “wellness training.” With a staggering public debt, the last thing we need is one more good idea of how to spend taxpayer money.  The real lesson from ACORN is that the government isn’t good at running programs, monitoring expenditures, or maintaining control over taxpayer funds. 

The good news is that there are common sense ways to make people healthier that don’t grow government.  For instance, unhealthy food is much cheaper than healthy food due to wasteful subsidies to sugar and corn producers; government interference has made things worse, not better.  Eliminating these subsidies would save the country billions of dollars a year, would help struggling 3rd world economies (and their starving citizens) and would also end the market distortion that makes unhealthy food so much cheaper than healthy food. 

In the end, there’s no way to eat your way out of obesity.  And there is no way to tax your way into into a healthier country. 

Permalink | Email | Print | Tags: TAXES, Federal

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