I was sad to learn that the Danish government is second guessing the “fat tax” that just made it on the books last October. They are finding that Danes are crossing the border for tax relief. They are crossing into neighboring countries (Germany, Holland, or Sweden) to make their high-fat food purchases, which is causing serious financial harm to Danish businesses. I guess this means the Danes won’t be taxing foods with high sugar content either as they had planned to do previously. They had such high hopes only a year ago.
The issue of whether or not “sin taxes” produce the desired effect is a hot one; experts do not agree. Denmark certainly would have been an interesting test case. But repealing the fat tax after only one year isn’t going to tell us anything definitive. I won’t lie, it was also kind of nice that we were able to observe how this might have played out from a distance (without subjecting ourselves to such an awful tax). The tax attorneys at our firm are united in our steadfast opposition to any tax that would make junk food more expensive.
