Sugary Sodas and Fat Taxes — Is the Pocketbook the Way to Attack Waistlines?

images-75Australia is considering instituting a so-called “fat tax.”  What it means is that products deemed to be overly contributing to the nation’s rising level of obesity will be taxed heavier than other products.  The concept is both to discourage people from purchasing and consuming the offending products and also to offset the costs to society of obesity.  It’s not a new concept; France has already done this, and we all know about the New York City debacle with the supersize sugary sodas.  So, Common Sense Conspiracy wants to pose the question:  is the pocketbook the way to attack waistlines?  Is this strategy going to work?

The obvious problem, at first glance, is how the law determines what products the “fat tax” applies to.  For example, Mayor Bloomberg’s assault on Coke and Pepsi as soldiers on the front line of the obesity epidemic may or may not be true, but it certainly probably hurt these companies’ feelings.  It’s a little different than cigarettes and alcohol; no one really feels sorry for Phillip Morris because everyone has the negative connotation associated with the tobacco industry.  Taxing their products is seen as punitive more than anything, but few people equate Coca Cola and Pepsi as even being in the same category.  After all, their products are a part of American culture that most certainly can be enjoyed without being taken to excess.  It is pretty well documented that smoking in any capacity is harmful to your health.  There is no healthy way to smoke.  So, your first problem is the industries that will be affected.  But, if you do trust the government wherever you are to isolate those products that deserve to be given the “fat tax” monicker, then there are other questions?

images-76First of all, does it matter?  How many people actually quit smoking because of the cost of cigarettes?  Our guess is that a lot of people entertained the notion of giving it up that might have never done so because of the prohibitive cost.  So, it was a victory in that sense.  However, will the Australian government make the “fat tax” so steep that it causes that same kind of feeling in other industries.  Cigarettes didn’t rise a few cents; the price of cigarettes skyrocketed overnight.  To do it right, it has to have life-changing implications.  Will Australia raise the taxes enough that vegetable oil suddenly costs the equivalent of $10+ for the average citizen?  There’s another problem too.  Cigarettes are the kind of good that can be discouraged without an effective substitute.  But people still have to eat.  So, does it then follow that the government will find a way to make healthier alternatives cheaper to give consumers an appropriate, affordable healthy equivalent?  Will they have to pay double to get vegetable oil while 100% extra virgin olive oil, heralded as the healthy alternative for this style of cooking, is at the usually economical price of its counterpart?  It’s more complicated than just discouraging the use of a product; if healthy products are overly expensive, and then the non-healthy counterparts are raised, all we’ve really done is make it more expensive for everyone.  And then, the likely result is that people either buy less of that good altogether, or just pick the one they would normally get anyway, as there is no real cost benefit from picking one over another.

There is another concept we at Common Sense Conspiracy want to address.  The American society especially tends to think that punishment is always the effective deterrent to any negative action.  Has anyone ever considered looking at it from the opposite perspective?  Instead of penalizing people for eating foods the government deems to be worse for the obesity epidemic, why not reward people that choose differently?  Instead of raising taxes on unhealthy items, why not provide a tax incentive for consumers and industries that create healthier alternatives?  Why does it always have to be about punishment?

Think about it.  The obesity epidemic stems from a society that has to do less physical labor and has food readily available at every turn.  People like to eat things that give them pleasure.  That is the world we live in.  There is no hunting and gathering, no necessity-stylized living.  People eat things that make them happy.  So, a society that looks at things from that reward-based perspective is probably not going to respond to punitive tactics as well as it might if there was a more positive outlook to be had from it.

exercise-busy-schedule 1Once again, cigarettes are the best example of the phenomenon we are trying to describe.  The extra taxes are not just to punish the tobacco industry; it is actually a punishment to smoker’s themselves.  The idea is to discourage them, but there is also a punishment mentality.  If you are dumb enough to keep right on smoking in the face of all this adversity, then you deserve to have to pay more to do it.  After all, you are most likely going to cost society in general more money in the long run because of your self-destructive habit.  Obesity is the same way.  It will cost more money to society in the long run, and for most people, it is a self-destructive habit.  But unlike smoking, there isn’t a social taboo associated with obesity.  We have a more victim mentality on that.  So, is the “fat tax” more of a punishment?  And what about people that use the products appropriately?  Why does the skinny, healthy fellow get punished by having to pay more for the products because others are packing on the pounds?

It’s complicated, and the most likely result is that it will raise tons of money for the government while doing little to actually fight the problem.

After all, Common Sense Conspiracy takes the stance that fixing the obesity epidemic will not be accomplished on the food side; doing something to promote physical activity is much more effective.  Instead of worrying about taxing fatty foods, why doesn’t the government provide some incentives for the people to go the gym, have enough time in their private lives to exercise, and so on and so forth.  There is more than one way to attack this issue, but only the way they are doing it will raise money for the government.

Guess which way will be tried first?

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