Public Policy Forum Blog

The fat tax made possible

As state and local governments try to diversify their revenue sources, sin taxes and user fees become more politically palatable. Now the UK has developed a tool that could make possible the ultimate sin tax for cheese-loving Wisconsin: the "fat tax."

The tool arose in order to enforce a new ban on advertisements for junk food during children's TV programing. Britain's Office of Communications (like our FCC) asked scientists to develop a food rating scale that defines what is or isn't junk food. The scale seems simple enough--add points for each beneficial nutrient in a food and subtract points for things like sodium, saturated fat, and sugar. The scale goes from -9 (dried lentils) to 28 (cheesecake); anything above 4 is in the junk food category and cannot be promoted on TV during certain programs or times.

With this simple, objective definition of junk food now available, some of the scientists who developed the rating scale argue that utilizing it to merely ban certain advertising isn't ambitious enough. They join some in the US advocating a fat tax that would make junk food more costly.

Any sin tax is regressive, affecting low income purchasers more than higher income buyers. The proponents' answer to that concern is to advocate using the fat tax revenue to increase the purchasing power of those low income consumers, making healthy foods easier to afford. But what is the justification for such a tax in the first place? It is similar to the argument for a tobacco tax: the high cost of health care.

Obesity accounts for 6 percent to 10 percent of U.S. health care spending, compared with 2 percent to 3.5 percent in other Western countries. The burden of obesity-related medical costs falls disproportionately on public health care in the U.S., draining resources from public programs like Medicare and Medicaid. Obesity accounted for 27 percent of the growth in real U.S. health care spending between 1987 and 2001.
The Trust for America's Health estimates that obesity costs each Wisconsin resident an average of $272 per year in health care fees. In addition, in our state 24.8% of all adults qualify as obese, ranking Wisconsin 22nd in fat among the states. Meanwhile, the same group ranks Wisconsin last for state spending on public health, with only $9.23 spent per capita in 05-06, compared to the national average of $31.00 per capita.

While a fat tax isn't on the radar screen in Wisconsin at this time, our declining revenue in the face of increasing costs, especially health care costs, may lead to desperate and drastic attempts to find new revenue sources. Until then, stock up on chips and candy.
Anneliese Dickman