It’s sick to tax the food of the poor to subsidise the choices of the rich

cupcakesFairfax press has a story today that research is being commissioned by health activists to introduce a fat tax into Australia.

As my colleagues Alan Moran and Julie Novak have outlined in their studies on Soaking the Poor and Nanny state taxes: Soaking the poor in 2012  the cost of sin taxes disproportionately hits working Australians. Ordinarily these are the taxes that self-styled progressives hate. But what sin taxes show is that a commitment to progressive taxation is only skin deep until they find a cause they like or because they don’t think they know how to live their lives best.

According to the article:

A fat tax may be imposed on sugary drinks and junk foods if a panel of nutritionists, doctors and health economists has its way.

It’s still early days, but a process started at a Brisbane hotel on Wednesday could lead to in a new way to discourage foods that cause childhood obesity.

The biggest problems are sugar-sweetened beverages, processed meats, snack foods and some of the lower-quality formula-type products marketed for infants and toddlers, says the convener of the panel, Dr Tracy Comans.

Cooked food eaten away from the home is also a major concern.

Tax is one weapon. Another is subsidies, Dr Comans says.

These one-size-fits-all solutions always seem like a good idea in theory, but ultimately struggle in practice:

The first task of her group – the early childhood expert panel on nutrition and obesity prevention – was the “complex question” of defining junk food.

“First of all we wanted to identify the main culprits and then if it is feasible to tax them,” she said on Wednesday.

“The two areas where everyone felt it would be reasonable and practical to tax were sugary drinks and food away from home.”

Other methods were needed for snacks, as the panel decided it was too difficult to define “what is a good snack, what is a bad snack and what’s in-between”.

As I argue in today’s Courier Mail the idea of a fat tax is plain stupid. We already have one and it doesn’t work. The only way it will is if we tax people out of their choices:

Australia already has an effective fat tax. It is called the GST, under which processed foods have a 10 per cent tax added to their price, while fresh food does not.

Yet despite this tax operating for more than 11 years, it has done little to improve our health.

The Panel has a solution for that:

The panel felt subsidising healthy food would be a good option.

But such a proposal is crazy. Government simply cannot afford to subsidise healthier food, and certainly not to the point of making it significantly cheaper. And if they did it would be a double whammy. Data shows that it is people from lower socio-economic backgrounds that eat unhealthier food, not rich people. Subsidising healthy food would literally mean taxing the poor so the rich can eat cheaper. That isn’t a bizarre idea – it is sick – and it should be called out for being so.



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