Denmark's "Fat Tax" is Losing Support


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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.

AMA Supports Soda Tax, On One Condition

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While there is no silver bullet that will alone reverse the meteoric rise of obesity, there are many things we can do to fight this epidemic and improve the health of our nation.  Improved consumer education on the adverse health effects of excessive consumption of beverages containing added sweeteners should be a key part of any multifaceted campaign to combat obesity.

Where taxes are implemented on sugar-sweetened beverages, using revenue for anti-obesity programs and educational campaigns explaining the adverse effects of excessive consumption of these beverages will help to reduce the consumption of these caloric beverages and improve public health.

~ Dr. Alexander Ding, AMA board member

Its clear from this statement that the AMA is not fully embracing a soda tax.  The emphasis should be on educating the public about the health risks of chugging sugary soda day after day, and the benefits of replacing soda with water.

The AMA is saying that a soda tax may be effective as part of a comprehensive plan to reduce obesity in our nation, and it would not go very far on its own.  Also, if Dr. Ding’s statement is representative of the AMA’s position, the focus is not on whether or not a soda tax should be implemented, but what to do with the funds should that be the case.  Nobody believes that a soda tax would curb consumption to the point that we no longer have a problem with sugar and obesity.  The real value in a soda tax would be the projects and programs that could be funded if the money is spent responsibly.


The Soda Tax

It doesn’t rank all that high on our list of tax problems.  Maybe you don’t even know you’re paying it.  But at least 35 states already impose taxes on sugar-sweetened sodas.  Soda is believed to be one of the reasons we’re so fat here in the United States.

Tu can eat todos los donuts you quiero, pero tu better not wash it dowño con un 16oz beveragado!

~ Miguel Bloombito (via Twitter)

Until now, the American Medical Association (AMA) hasn’t taken any official position in the soda tax debate.  However, they are expected to put it to a vote this week at their annual meeting in Chicago.  Is there even any question which side they will take on the issue?  My mom never let me eat dessert before dinner, and I don’t think the AMA would pass up an opportunity to take a stand against soda.

If a soda tax is effective, it won’t be in its direct deterrence of soda drinkers.  At a rate of one or two cents per ounce, it would hardly make a difference to most soda addicts.  The effectiveness of a soda tax depends on how soda tax revenue is spent.  If the revenue is spent on programs aimed at curbing obesity, then it could make a significant difference.

One particular obesity program that I think makes sense involves improving access to good cold drinking water at schools and in public places.  Sometimes people are just thirsty and need something cold to drink.  If you put soda in front of them, they’ll drink it.  But if there’s water, they’ll drink that too.  Why is it that public water fountains (the kind typically found in schools and parks) usually produce either warm water or none at all.  And when they do work, the water pressure is normally so weak that you can get little more than a sip.  We should have the technology to build high-quality water fountains these days; ones that actually work.  And maybe a soda tax could help fund this sort of thing.