Democracy in America
WILL the world get fatter in 2013? I suspect so, not just in the developed world but in a lot of developing countries, too. The simple truth is that too many people eat too much and exercise too little. So what, given the apparent failure of a plethora of best-selling diet books to effect any lasting change, is the remedy for our misbehaviour?
The economists' answer is presumably to mess around with the laws of demand and supply (hence Mayor Michael Bloomberg's ploy in New York of banning those ludicrously oversized fizzy drinks) or to invoke the price-mechanism—i.e. make it more expensive to gorge yourself. This, you may remember, is what Denmark tried with a tax imposed last year of 16 kroner ($2.7) on every kilo of saturated fat in a food product. One result is that lots of Danes hopped across the border to buy butter, pastries and various bits of fat-filled junk from supermarkets in Germany, and the Danish food industry complained of the extra administrative costs of complying with the order. The second result is that last month the government in Copenhagen abandoned the tax, implicitly admitting it had failed to slim the country down (13% of Danes are reckoned to be obese, which nonetheless compares rather well with the 35% of Americans).
So is the idea of taxing fat and sugar—something being mulled over by politicians in several countries, including Israel, France and Britain—a non-starter? Maybe, but Cassandra was rather intrigued by a letter in this week's Economist reacting to an article on the Danish tax in an earlier issue. Cassandra reproduces it in full, proudly noting that though his girth has increased over the years, his BMI is 24.5…
SIR – Using taxes to encourage better diets and improve health outcomes is laudable. Denmark’s fat tax was fraught with many practical problems, but what you didn’t mention was that the tax was poorly targeted. A person with an active lifestyle, an athlete or manual worker for example, needs a high calorie intake. Denmark’s policy taxed the active athlete or manual worker more heavily than the couch potato.
A much better solution would be to tax outputs rather than inputs. Along with their income taxpayers should declare also their body mass index (BMI, or the weight in kilograms divided by the square of height in metres). Being overweight is defined as having a BMI in excess of 25; values above 30 indicate obesity. One’s income tax could be determined as a function of the deviation of BMI from some target value. For instance, those with a BMI of 25 or less would pay the standard rate of tax, whereas those who have a higher BMI would incur a tax surcharge. There could be multiple tax brackets to distinguish between those who are “just” overweight and those who are obese.
Taxpayers might feel tempted to lie about their weight. However, regular audits to check their BMI would be quite easy, more so than auditing undeclared income.