Fat Tax Essay
Imposing a fat tax on saturated fat, junk foods, sodas, etc. would be best because of many health and money related issues that it could possibly solve. A fat tax could help control many health problems the United States is facing today by giving some incentive to buy healthier foods. Taxing these certain foods may help control the way people eat and in turn change lifestyles to much healthier ones than there are now. The healthier lifestyles would help lower the amount of money spent on health care, in turn saving money.
The tax, along with saving the United States money, would also produce large revenue helping to boost the economy and pull out of the debt crisis. Many other countries have begun taxing fatty foods and have produced very nice revenue because of the levies. The tax might pose some problems at first, but in the long run will prevail and produce great gains for the country. In order for a tax to work, it will have to be done correctly. A very organized operation, in which the correct fatty foods would be taxed in order to target certain items which create health problems, would be a start.
The United States as a whole is becoming a very unhealthy society because of how Americans eat. Fast food restaurants are part of the main cause because of their affordability and accessibility. It is so easy for people to skip cooking healthy foods and just stop off at McDonalds to grab a quick burger. “The United States obesity rate has reached up to 34% according to the United States Center for Disease Control and Prevention” (Salahi 1). A fat tax could possibly slow the consumption of these fatty foods and fast foods, which in turn would reduce the obesity numbers.
Obesity is not all that these fatty foods are causing; there is also heart disease, diabetes, and many others, all of which come about because of behavior. Imposing a tax on the fatty foods that cause these diseases could change the behavior of the consumers (Vijayaraghavan 1). An example of behavior change is gasoline prices, the higher gas prices have changed the types of vehicles being made. If a tax was levied on junk foods, sodas, etc. , there should also be a price drop in fruits, water, and healthier foods, which would push the consumer to buy the healthy foods.
If consumers would begin to purchase these healthier foods, the death rate of around 300,000 people per year will drop (Chouinard 22). Studies have shown that the healthier the person, the more productive he/she usually is because of an active lifestyle. The fat tax, if effective, could possibly produce a healthier, happier, and more productive society as a whole. If the country becomes much healthier as a whole, then a lot of government spending would begin depleting causing huge gains in Medicare and Medicaid where costs have doubled in the past ten years.
The government could then use that money to put towards other areas needing improvement in health-care. Although taxing certain foods would create large revenue for the nation, as well as decreasing the enormous bills for health care, which citizens are taxed for anyway. “The Congressional Budget Office predicts, with a three cent tax, a fat tax could produce twenty-four billion dollars within four years” (Salahi 1). That type of revenue could pose great possibilities for both state and federal government funding for other areas needing improvement.
Seventeen states in the United States already have certain taxes on junk food which produces somewhere around one billion extra revenue dollars annually. If the United States would impose these taxes nation-wide, that would be an extra fifty billion dollars of revenue to a broken economy and could help the debt crisis immensely (Drinkard 1). As well as producing a large revenue for the country, if effective with obesity, a fat tax would also drop our health-care expenses which are somewhere around one hundred billion dollars per year.
The amount of money saved on health-care, combined with the revenue generated by tax dollars, the United States could possibly earn three-hundred billion dollars over a four year period (Salahi 2). The money produced by the taxes would create great opportunities on both state and federal levels. The debt crisis that the United States is facing would begin to deplete and could create new organizations regulating this fat tax in which new jobs would be created. In 1917 the United States imposed a tax similar to this fat tax on sweets and sodas as part of a plan to help pay for involvement of World War I.
At that time, the taxes seemed to appear during times of need when money was needed to produce, and it worked. The United States is in a debt crisis, and if the country would impose these taxes on fatty foods it would produce much needed revenue to help pull the country out of debt (Drinkard 4). Many European countries such as France, Denmark and Hungary have already begun instituting a tax on unhealthy food to boast a healthy society and produce revenue. Denmark has setup its fat tax by the percentage of saturated fat in each item. The tax is around three dollars per two and a half pounds of saturated fat.
Denmark’s plan was to impose the tax in order to increase the life expectancy average of its citizens by trying to force people to eat healthier (Jaslow). They are trying to force the citizens to avoid the saturated fat because of heart disease and cancer that it can cause. Romania was planning to start a tax on fatty foods that was more complex and was said to raise around seven-hundred million Euros a year. The plan was pushed aside though because of already high and steadily rising food prices. Hungary believes their fat tax will be most effective on peoples buying habits because of its citizen’s low salaries.
The people will have to choose the cheaper, healthier foods in order to survive with the amount of money they make. Hungary also plans to levy a 25% extra tax on fatty foods and drinks, and if passed, it will be the first in the world (Cain 2-3). The United States also has had its own versions of this fat tax before on sodas and candy in the early 1900’s, but most only lasted a short while each time they were instituted. In Denmark their plan to tax the saturated fat in order to make people live healthier has backfired on them, and obesity rate has actually increased (Dietriffic 3).
Although there are many reasons a fat tax would really help the United States, there are still some grey areas and problems it would pose. First, the government would be controlling how people make some of their decisions. The higher taxes pose a problem for certain companies which produce these fatty foods causing them to slow production which would result in more and more job losses. This country already has too high of an unemployment rate to put itself in a position in which that rate will grow any higher.
The debt crisis in the United States is a big problem for the tax as well as unemployment, because now an already struggling society is being taxed. The United States has instituted a tax similar to this before in 1932 and expected to raise around twelve million dollars, but it was overturned after two years because of lack of revenue production and was very unpopular (Drinkard 4). Such a tax would still be unpopular today with people who do not have an obesity problem. They would be taxed trying to solve a problem that has nothing to do with them, and targeting strictly obese people would be immoral.
The tax could possibly backfire as well, and the obesity rate would continue to grow larger as people just spent more money on food. There was a study done on smoking bans in bars that showed the drunken driving fatalities increased because people drove further to bars in order to be able to smoke, and that is an example of what might happen with the fat tax. In other words, the fat tax could be passed, and then not necessarily work and just fade out like in the past or could have the opposite effect like it has had on Denmark.
There is no actual way to change the eating habits of people; they can only be given incentive to try to change (Montopoli 2). The problem with the tax at this time is taxing people who are already struggling to make ends meet. With the unemployment rate being so high, it is going to be really hard to pass a tax to increase prices on food even more than they already are because humans must eat to live. In a case where the tax causes people not to be able to pay for the high cost of food, then people then the government ends up spending more with food stamps.
This result would then make the gains of the fat tax ineffective because the revenue produced would keep up with the government spending caused by the high cost of food. A manufacture’s tax would erase the problem of over taxing citizens, but then could cause the companies to either increase their prices or go under, and turn would create greater unemployment. A fat tax should be imposed in order to first off help with our debt crisis. The revenue that this tax could produce for the United States government could make great gains in the right direction.
It could create new jobs in the Government to regulate how this tax is accessed. The health gain that could be possible because of the fat tax would be huge for the country. If the country were able to stop the consumption of these fatty foods and drop the obesity rate, it would help drop government spending in turn also helping with the debt. The obesity rate drops and the production climbs according to health studies. If our production is increased in all areas, that will also help with greater revenue gains (Drinkard 7). To have a healthy society as a whole, would make the country a better place to live in
and would boost spirits to a society that is down and out due to a very slow economy. If health-care could move away from studies on obesity and heart disease caused by unhealthy eating habits, then Americans could focus more on different diseases such as cancer. In order for this fat tax to work, it must be setup correctly with much research from others who have imposed similar taxes thus far. If certain foods deemed unhealthy are taxed in order to boast healthy eating habits, then the foods that are healthy need to be subsided that way it really puts some incentive in eating healthy.
It is too easy to just stop by a fast food restaurant and grab a quick burger and fries although it is one of the unhealthiest things to do. There must be something extra, subsides on healthy food, in order to change the way people are going to eat. Cigarettes are a good example of how taxing fatty foods would not work; just because you tax something and raise the price is not going to prevent people from buying it. The extra subsides on healthy food give the extra edge for people to buy them which in turn will then create the healthy eating habits (Salahi 1).
The most important part of the tax at this time is the amount of revenue it will produce, and the United States needs it desperately. If the revenue is produced according to plan, then it has served its purpose over a four year period and will begin to help with the health issues on its own eventually. It is a serious issue in the United States and needs to be addressed, but it will be a long process to get to that point. The possibilities posed by the fat tax are wonderful and would help the United States greatly.