It's Friday, must be time for a slightly off topic post. From Reuters:
A "fat tax" on salty, sugary and fatty foods could save thousands of lives each year, according to a study published on Thursday.
Researchers at Oxford University say that charging Value Added Tax (VAT) at 17.5 percent on foods deemed to be unhealthy would cut consumer demand and reduce the number of heart attacks and strokes.
Before I go on, I should probably mention that I've chosen to lose a few pounds recently--to prevent choosing to lose a lot of pounds later--and I'm a little cranky because of it.
Anyway, I have a question.
What is the goal of the tax? If the goal is to correct an externality, then I say go for it. I'm not sure what that externality is--I assume it has something to do increased health care costs for everyone--but if the proposed tax is designed to correct a market failure in some way, then I'll support it. But, if the tax is there to help people live longer, or just to save lives, then I'm opposed. Why? Because I'm heartless. Oh, and I think people should be able to choose to eat what they want as long as it doesn't impose a cost on others (back to that externality thing).
Whenever I read these health studies I always get the feeling that there is a hint of 'we know what's better for you than you do.'
I prefer instead to view it as a question of tradeoffs. If I am willing to sacrifice a few days of life at the end for the pleasure of eating a couple of KrispyKremes today--mmmmmm--why should I be taxed? There's no economic rationale for the tax in that case.
So which is it? Is this a correction of a market failure or blatant paternalism? It looks like the story is claiming both:
The purchase tax is already levied on a small number of products such as potato crisps, ice cream, confectionery and chocolate biscuits, but most food is exempt.
The move could save an estimated 3,200 lives in Britain each year, according to the study in the Journal of Epidemiology and Community Health.
"A well-designed and carefully-targeted fat tax could be a useful tool for reducing the burden of food-related disease," the study concluded.
Because that burden is placed on someone other than the person eating all the bad stuff--OK, I'll buy that.
The team from Oxford's Department of Public Health said higher taxes have already been imposed on cigarettes and alcohol to encourage healthy living.
Because we know what's better for you than you do. (It's probably worth mentioning that the two taxes mentioned--cigarettes and alcohol--have had little effect on consumption but have raised large amounts of revenue.)
But, at least the writer recognizes most of these issues in the end.
Any "fat tax" might be seen as an attack on personal freedom and would weigh more heavily on poorer families, the study warned.
A food tax would raise average weekly household bills by 4.6 percent or 67 pence per person.
Former Prime Minister Tony Blair has previously rejected the idea as an example of the "nanny state" that might push people away from healthy food.
The Food and Drink Federation has called the proposed tax patronizing and says it would hit low-income families hardest.
It suggests that people eat a balanced diet.
The British Heart Foundation said it does not support the tax.
"We believe the government should focus on ensuring healthy foods are financially and geographically accessible to everyone," it said.
And then leave me alone and let me eat what I want. Obviously my sense of humor is the first thing to go when I'm hungry.
