Denmark Enacts “Fat Tax”

On October 1, Denmark introduced the world’s first “fat tax.”  The tax is aimed at foods that contain saturated fat such as butter, milk, cheese, meat, and oil.  The tax kicks in once the saturated fat content of the food exceeds 2.3%, at the rate of 16 kroner per kilogram ($1.29 per pound). Ole Linnet Juul, the food director at Denmark’s Confederation of Industries stated that the tax would add about 12 cents to a bag of chips, 39 cents to a package of butter, and 40 cents to a package of hamburger meat.

This new tax joins the other health-minded legislation already in place in Denmark.  Trans fats have been all but banned since 2003, with the legal limit placed at 2% per food item.  Also, a so-called “sin tax”, introduced in 2010, charges extra for sugary foods, such as soda, chocolate, and candy.

Surprisingly, the tax wasn’t implemented to try to curb obesity.  Denmark’s obesity rate is actually 2-5% lower than the rest of Europe.  Instead, the Danish government has stated that their main goal with the tax is to raise the life expectancy of their population.  The current age is 78 and they are looking to increase it to 81 over the next decade.

Other countries such as Finland and Romania are watching how the situation unfolds before they decide if they too, want to enact similar legislation.  Belgian senator, Louis Ide said, “Obviously we have to do something about our living habits, yet a fat tax will not do the trick. A tax does not change unhealthy eating patterns, it only fills the treasury.”  Danish citizen, Alisa Clausen seemed to have similar misgivings.  “In theory this is good – it makes unhealthy items expensive so that we do not consume as much.  But the fat tax and other sin taxes have a “Big Brother feeling. We should not be punished by taxes on items the government decides we should not use.”

Is Denmark becoming a nanny state?  Will this new tax actually make people healthier?  Should the United States consider enacting similar legislation?

One comment

  1. Personally, I am torn on the notion of a fat-tax. While I agree with the underlying policy with this specific tax, I have reservations with respect to politically motivated taxes in general. I guess it is the intrinsic American in me that causes me to hesitate when I see a government attempting to effectively punish behaviors by means of taxation, regardless of whether I agree with such behaviors.

    I have to admit that I believe there are certain situations where I believe in use of taxation to direct behaviors. For instance, I happen agree with the implementation of the Stockholm Congestion Tax given the state of road congestion in Stockholm, Sweden, and the potential environmental concerns. Nevertheless, there are many situations in which I believe governments are overstepping their authority in attempting to direct behaviors by means of taxation (I will not get into these on this blog, but if you would like to discuss, feel free to e-mail).

    Ultimately, if I hear a government is attempting to implement a new tax with the intention of affecting behavior, no matter the situation, my ears will stand up.

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