Tax on Fatty Foods: An Examination - Essay Example

Tax on Fatty Foods Denmark introduced a tax on fatty foods by applying a surcharge to foods with more than 2.3 percent saturated fats. Denmark levies tax on foods such as butter, milk, cheese, pizza, oils, and meat (ABC, 2011:1). The United States levies tax on foods such as chewing gum, candy, soft drinks, and potato-based foods. Some of the states in the US that have this tax include Arkansas and California, which taxes soft drinks at the rate of 2% and 7.25% respectively (Crawford et al, 2010:340). In October 2011, the Prime Minister of England revealed that his government was looking at introducing fat tax to tame the high incidences of obesity (Guardian, 2011). Cameron pointed out that he had fears over high costs and reduced life expectancy of the current generation. In the light of alarming numbers of diabetes in America, Cameron warned the country that it should consider the negative impacts of diabetes menace (Guardian, 2011). Hungary also passed fat tax in July 2011. This new tax in Hungary stipulated that the citizens of Hungary spend 0.05 US dollars on fatty foods. This is a move to cut the expenses of health care in Hungary (Buczynski, 2011). The report by European Public Health Alliance of 2011 (EPHA) revealed that in every two people one of them is overweight. The report also showed that out of four people, one had obesity. Further, the report pointed out that chronic non-communicable disease such as diabetes type 2, cardiovascular disease, and cancers are associable with fatty foods. These diseases contribute to about 86% of all deaths in the European Region of the World Health Organization (EPHA, 2011:3). These diseases have attracted the attention of major organizations such World Health Organization and UNICEF. In December 2003, the World Health Organization suggested that nations should consider taxing food high in fat, sugar, and salt. This is to encourage people to make healthier food choices. The WHO report revealed that several countries use fiscal measures to promote availability of and access to certain foods. Other countries use taxes to decrease or increase consumption of foods. Others utilise subsidies and public funds to promote access among poor communities to sporting and recreational activities (White, 2006:6). Food taxation capitalises on the fact that people do not buy the most costly foods. This alludes that price intervention can produce meaningful changes in the patterns of food consumption and a reduction in diet-related diseases. In the light of this, England has proposed to introduce tax on fatty foods. This paper will discuss the arguments for and against new tax on fatty foods. The paper first addresses the arguments that support tax on food and later it will tackle the arguments against this proposal. The proposal for taxation on fatty foods is well founded. The goal of these taxes is to influence behaviour of people to meet public health goals of in England. Through this taxation, England seeks to improve the health of its citizens. There is scientific connection that fatty foods contribute to development of non-communicable diseases such as cancer, diabetes 2, obesity, and coronary diseases. The rate of these diseases increases with consumption of fatty foods. WHO reports that overweight and obesity contribute to over 2.5 million deaths each year. The report predicts that this trend will double in the year 2020 (White, 2006:6). The same report indicates that deaths from non-communicable diseases occur in both developing and developed countries. It is, therefore, prudent for the government of England to propose to introduce taxation on fatty foods. This will prevent a large population from consuming these foods because the prices will be very high. It is evident that the fatty foods are generally cheap as compared to the natural foods. The low of these foods has made a large population in England to afford these foods on daily basis. Over-consumption of these foods results in development of health complication, which is very costly to treat. Tax on foods in England will save its citizens from high expenditure on the hospital bills to cater for diet-related complication. This, therefore, means that the citizens will channel their money in more meaningful and productive ways rather than to cater for hospitalisation costs. Citizens of England will have a health life and, therefore, they can participate in building the economy rather than making unnecessary journey to seek medical attention from health facilities. The cost of treating non-communicable diseases is very high. Some of medical procedures such as surgery require many funds, which the citizens may not have. This risks the lives of the affected by putting them in a precarious situation. Some of the complications, such as cardiovascular disease, need swift attention otherwise the patients can succumb to death within a shortest timeframe (Leicester & Windmeijer, 2010:7). This, therefore, means that prevention of such kind of diseases through taxation is a sure way to avoid unnecessary losses of money and individuals. This alludes that taxation on fatty food is justifiable. It has the capability to battle the non-communicable diseases. Second, the introduction of taxation on fatty foods is a sensible way to create awareness of the masses. Many people in England and the world at large do not have knowledge about the danger of foods that contain unsaturated fats. Although some people may claim that it is out of ignorance, it may be because people do not have any information of the dangers of fatty foods. The populace is not aware of the problems that might arise from consumption of particular foods. With taxation in place, the population of England will be able to identify non-taxed foods and the fatty taxed foods. Taxation on fatty foods will make people to have enough knowledge. With this knowledge of the consequences of fatty foods, the people will make the right decisions on whether to purchase the highly sold fatty foods. This means that taxation will deter consumption of unhealthy foods and citizens will make sound decision on whether to purchase the foods or not (Chern, & Rickertsen, 2003:238). Taxation on fatty foods is socially valuable because it will improve the health outcomes of England population. In addition, taxation will deter individuals from trading off risky dietary behaviour. Moreover, individuals might favour taxation as an aid to their self-control of purchasing fatty foods. This will greatly improve their health. Third, taxation of fatty foods promises to yield well promoting a health living by changing the trends of advertisements. Most of the manufacturers of fatty foods capitalise on advertisements to attract their customers. These advertisements do not focus on the audiences and some of them capture the attention of children. Introduction of taxation on fatty foods will ensure that the media do not run such kind of advertisements; rather; they concentrate on natural foods. This will have a positive impact in inculcating a culture that promotes health living. People will be reluctant to purchase fatty foods. Lastly, the proposed taxation on fatty foods will encourage people to consume enough of natural foods. These include fruits and vegetables, which are health to consumers. The move will promote both young and old generation in England to develop a habit of eating the natural foods which have high nutritional values. Children may replicate this behaviour of health diet in the lives in future. The move by the government to subsidise the prices of the low-fat foods is well founded. Although the new taxation on fatty foods may present a solution to the most of health problems in England, this may not be a panacea to health problems. The move may be a theoretical one, rather than actual and operational one (FAO, 2004:168). To start with, the issues that the government and health advisors advance on the non-communicable diseases are understandable. However, matters regarding to the economic effectiveness and operational efficiency of reducing the diseases through tax on fatty foods are unclear. The success of taxation on fatty foods depends solemnly on the response of consumers of these foods to price changes that the policy seeks to put in place. There is a general connection between the consumer responsiveness on demand with respect to income levels. This implies that affluent consumers are likely to react less to a tax on fatty foods than the destitute. The tax on fatty foods may bring only a small reduction in demand, which provides small contributions to reduction of consumption on fatty foods. This, in turn, means the efforts of the government of England to fight obesity will be in futility. This means that the rich consumers will continue to purchase the fatty rich foods despite the inflated price. The taxation of fatty foods may direct the consumers to consume its subsidies in large amounts. In this case, tax on fatty foods may help consumers to take in single foods, which contain high-energy contents. However, the impacts on overall energy consumption are likely to be dismal. For instance, in case with the taxation on animal fats, the population may turn into consumption of vegetable oils and fats (IFS & Mirrlees, 2011:135). This action increases the percentage of calorie intake and thereby risks the consumer’s health. Third, taxation of foods may present a problem in addressing excess calorie consumption. This is because in practice the imposition of the tax may be on foods items rather than on nutrients. This could be a futile and unyielding exercise because a food item contains many nutritional components. For instance, the taxation may compel the manufacturing to concentrate on reducing the fatty contents on foods and jeopardising other nutritional components such as proteins. This affects consumers who require such protein greatly. This means that the move by the government of England to levy taxes on foods may exacerbate other health problems (IFS & Mirrlees, 2011:130). Lastly, the fat tax may be a regressive one. This is because taxation on fatty foods may force the low-income households to spend a lot of their total budget on foods. This will interfere with the freedom of individuals to choose the kind of food of their prevalence. This is because introducing a surcharge on fatty foods, will limit the range of foodstuffs the consumers can purchase. Consumers who require fats in their diets will not be able to acquire such food items. Therefore, taxation on fatty foods may comprise the health of individuals. In addition, low purchases of inflated foods will have negative impacts on the manufacturing sector. It, therefore, implies that manufactures will generate low profit margins on fatty foods. This move will prompt the manufacturers to reduce the volumes of production of the fatty food products. The overall effect of this reduction is a pinch in the economy of England. The country will lose revenues that come from the production of fatty foods stuffs (Paterson, 2007:45). It is apparent from the essay that there are arguments to both object and support the proposed new taxation on fatty foods. The government of England should weigh both positive and negative impacts of the taxation policy on the economy and its contribution to improvement of health. The government of England must justify on how this intervention will improve the health of the citizens based on the diet. The new tax on food will be unnecessary if it does not yield results on the fight against diabetes in England. Second, the government should structure the taxation on fatty foods carefully. This is necessary to avoid increasing prices of fatty foods by a larger margin. Third, there must be a substantial indication that the new prices on fatty foods will yield the desired changes in the lifestyles and diet of the consumers. The government should consult widely with different stakeholders in health and economic sectors for the tax on fatty foods to bring long lasting solutions on obesity and non-communicable menace. Bibliography ABC, 2011. Denmark Introduces ‘Fat Tax’ on Foods High in Saturated Fat. [Online] Available from: http://abcnews.go.com/blogs/health/2011/10/02/denmark-introduces-fat-tax-on-foods-high-in-saturated-fat/ [Accessed 11 May 2012]. 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