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Brooks Wilson's Economics Blog: Germany and the Fat Tax

Sunday, July 25, 2010

Germany and the Fat Tax

As a libertarian, I believe that an important role of government is to protect and defend our liberty from private interests who through coercion would wrest our freedom from us.  Too often, those in government act as if they are the proctors of the unwashed masses who are to stupid to act in their own interest or purposely trying to ruin "well crafted" government programs.  (HT Drudge Report)  Hugh Higgins, an AOL contributor writes about efforts by German legislators to pass a tax on obesity in "Germany Weighs Tax on the Obese." 
Marco Wanderwitz, a conservative member of parliament for the German state of Saxony, said it is unfair and unsustainable for the taxpayer to carry the entire cost of treating obesity-related illnesses in the public health system.

"I think that it would be sensible if those who deliberately lead unhealthy lives would be held financially accountable for that," Wanderwitz said, according to Reuters.
Wanderwitz would create a backwards system that provides healthcare to all then capriciously limits care to lessen the cost burden to the state. the state is the master and state objectives supersede individual freedom.  To keep costs low, the government would tax one unhealthy behavior, weight. 

Obesity adds to an individual’s health risk, but what about eating too much salt, riding motorcycles, engaging in unprotected casual sex.  I could go on; exactly half of our activities are more medically costlier than average.  Higgins quotes Jurgen Wasem who makes just this point. 
Health economist Jurgen Wasem called for Germany to tackle the problem of fattening snacks in order to raise money and reduce obesity.

"One should, as with tobacco, tax the purchase of unhealthy consumer goods at a higher rate and partly maintain the health system," Wasem said, according to Germany's English-language newspaper The Local. "That applies to alcohol, chocolate or risky sporting equipment such as hang-gliders."
Wasem taxes get closer to a socially optimal solution if all citizens are homogenous, but they are not, and if one believes that the state has the responsibility to prod, prick and poke citizens to conform to state objectives.  Higgins continues
Walter Willett, a professor of nutrition at the Harvard School of Public Health, described the idea of a fat tax as "not humane." He told AOL News that lifestyle is not the only factor in obesity, with both genetics and urban environments playing major roles.

"It's not fair to tax somebody just for being obese," Willett said. "Most people who are obese would prefer not to be so."
Assuming that the average citizen knows as much about health risks as government regulators and more about their own risk characteristics, a market system of healthcare better prices all discernable risk.  The government, with the consent of its citizens could still maintain the flexibility of markets by establishing medical savings accounts backed up by a catastrophic insurance policy for all citizens.  While the freedom of individuals to spend their own earnings is violated, at least the violation would minimize the loss of freedom and the cost to the taxpayer. 


  1. Robert Jackson

    As Wasem said with tobacco individuals who chose to use tobacco have to do so at a higher tax rate, I feel this could be used in the consumption of foods in higher fat contents. A tax similar to this has already began to make landfall here in the US, through the soda tax. I believe the governments job is to keep it's peoples safe from harm, both external and self inflicted. I don't understand how people who smoke cigarettes are looked down upon because they are increasing their chances of lung caner, yet an obese person who gorges upon food at any chance is thought of in that they can't help it. If the government can cut back on obesity and make us healthier by all means it should go for it.

  2. Colleen Scott ECON 2301 87 88 89 2011SP1/2/11 8:19 AM

    I think an unhealthy food tax is unnecessary, or a fat tax. If we were charged for every single thing that could possibly hurt us to send us to the hospital or doctor, we might as well never leave home. We'd have to pay taxes on just driving, since that's one of the most dangerous forms of transportation. I smoke and drink and eat unhealthy foods and ride motorcycles ... however I also go to the gym and am not obese and my cholesterol and blood pressure are low, so does this entitle me to a tax discount or exemption? Why should I have to financially suffer at the grocery store when I want Oreos or ice cream and am not obese? There are too many variables to consider for the governmemt to go making policies like these. Putting a fat tax or unhealthy food tax is saying these people don't realize that fried chicken and chocolate aren't the best food choices compared to apples and oranges. Instead of focusing on taxing, how about we focus on where this all stems from and add Health classes to all school cirriculums, increase what PE instructors are required to do for students, etc. Childhood obesity is just as profound now, and education and early on focus to healthy choices and exercise can go a much longer way than simply punishing every citizen financially.

  3. My belief is the less government is in our daily lives the better. There are many people who love chocolate and are not fat. My belief is if a person wants to eat fattening food or to large portions they will. People still use tobacco today, even after the government has raised taxes on this product to make it very expensive to buy. People can beg an alcholoic or drug addict to give up their habit, but until the person is ready to make the change they wont. The same way with many people with weight issues ,until they are ready to make the change they wont, even if the government taxes certain foods. Where will the taxation stop? Who will decide what is healthy and what is not? The implications of the government taxing certain foods they deem unhealthy is frightening to me. I belive our constitution states that we should have a limited government.
    The government being involved in what we choose to eat is far from limited.

    Elizabeth Rainwater

  4. What is it with governments? Who do they think they're affecting with increasing the taxes? They will not change people's behaviors. The person that has to pay $4 for a candy bar will either do so (movie theater!) or they'll buy it online from someone that won't charge them so much! Have these people not been to flea markets?

    The best idea I have seen so far is POSITIVE incentive! Baylor has a program. If you complete their 6 week Weight Watchers program, you can save $10/month off your premiums up to $40. Now THAT'S a change for the better!

    Instead of beating people that are already down with a stick, why not offer a helping hand?


  5. As far as taxing goods that are deemed "unhealthy" and "fattening," I think that is unnecessary. People can get fat off of eating too much of anything. Also, taxing any good that adds to a "dangerous" lifestyle is also ridiculous. Partaking in dangerous activities such as hang-gliding can negatively effect your health in a single traumatic incident. Obesity is a long-term choice that affects a person's health chronically. The positive correlations drawn between obesity and increased heart disease, diabetes, etc include the ailments that are expensive and long term in terms of treatment. Inflicting a tax on those who choose to immerse themselves in such a lifestyle might be incentive enough to help motivate them to choose more tactful life choices. In the short-term, however, both the fat people and the insurance companies would be hurt by the fat tax, but in hopes for a better future, it could be a small price to pay for long-term health.