Time for a fat tax?

Abstract

My contact in Karachi offered to show me around the city. He was a TV producer, middle class, well educated, in his early 30s. I looked forward to a tour of a mosque, a museum, the beach. Instead, he took me to Park Towers, the city's premier shopping mall, boasting a string of fast food restaurants—the aspirational destination for the city's elite. I tried not to let my disappointment show. It was a Sunday and the mall was thronged with well-to-do families—their children clutching boxes of chips and cans of cola—on a weekend outing to this chrome and glass monument to consumerism. My guide wanted to show me that his home town could match mine for sophistication any day. Like tobacco, which wreaked its havoc in the west before seizing hold of the developing world, the fast food industry is marching rapidly out of the USA and Europe towards global domination. Junk food bars are pushing out traditional restaurants, changing dietary habits, and leading to an epidemic of obesity, heart disease, and diabetes. By 2025, diabetes is projected to double with 370 million people affected—maiming and blinding on an unprecedented scale. Is it time to take a leaf out of tobacco's book and bring in a fat tax? In the UK, the idea of imposing extra VAT on burgers, chips, and sweets was floated by Downing Street in 2004. It was vetoed by the then Chancellor of the Exchequer, now Prime Minister, Gordon Brown, on the grounds that it would disproportionately fall on the poor. In the USA, soft drinks are now recognised as one of the main drivers of the obesity epidemic and last year New York State Governor David Paterson proposed a tax on them in his state budget. That proposal too fell this year in the face of opposition from New Yorkers. But other US cities already levy taxes on soft drinks and snack foods that raise a total of US$500 million a year. Swingeing tobacco taxes have made smoking a minority pastime. We should tackle junk food in the same way. The argument that a fat (or soft drink) tax would be regressive ignores the fact that the ill health caused by obesity (as by tobacco) falls disproportionately on the poor. They have the most to gain from cutting consumption. A fat tax would achieve more than a fistful of public health campaigns and would help shore up health-care budgets decimated by the financial crisis. It awaits a government with the moral courage to drive it through.