The Fat Tax: Dare I say I Told Them So?

I am flat out preparing for departure on my Myanmar trip tomorrow but I could not let this news item pass unnoticed:

Denmark to scrap world's first fat tax

"The fat tax and the extension of the chocolate tax - the so-called sugar tax - has been criticised for increasing prices for consumers, increasing companies' administrative costs and putting Danish jobs at risk," the Danish tax ministry said in a statement.

"At the same time it is believed that the fat tax has, to a lesser extent, contributed to Danes travelling across the border to make purchases.

"Against this background, the government and the (far-left) Red Green Party have agreed to abolish the fat tax and cancel the planned sugar tax."

I wrote earlier on this subject: Taxes For Our Own Good, concluding that I believe that the suggestions to tax foods for public health reasons are misguided at best and may be counter-productive at worst. Not only do such taxes not work, especially when they choose the wrong foods to tax, they can become expensive liabilities for the businesses forced to become tax collectors on the government's behalf adding accounting and red tape costs. As Danish businesses were quick to report:

Businesses call fat tax a failure on all fronts

Levy costs millions of kroner and has not resulted in consumers making healthier choices, say food producers. Finance minister Bjarne Corydon (Socialdemokraterne) is not opposed to trimming the fat tax, but the lost revenue will have to be made up

Denmark's surcharge on the fat content of foods has cost businesses 200 million kroner since it was implemented last October, according to Dansk Erhverv, a business advocacy group. The tax has been expensive,” chamber spokesperson Lotte Engbæk Larsen told Jyllands-Posten newspaper. “Businesses have had to absorb the costs of administration, set up new IT systems and explain it all to customers and suppliers.”

Larsen said that the red tape was the only thing to come from the levy, since it did not encourage customers to pick less fatty food.

“There have been absolutely no health benefits gained from this tax,” said Ole Linnet Juul, of DI Fødevarer, a food industry advocacy group.

Yes, I will say I told them so. Food taxes are not the way to improve public health. Hopefully the social engineers promoting these taxes in other parts of the world, including my own country, will heed the lessons of this failed Danish experiment.

Cheers, Alan, T2, Australia

Everything in Moderation - Except Laughter