TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, July 31, 2009

Fat Tax to Finance Health Care Reform?

Forbes:  Fat Tax Could Be Panacea For Health Reform, by Brian Wingfield:

One of the ways President Barack Obama hopes to reduce soaring health care costs is through the promotion of overall wellness. There's a related idea cooking in Washington: a fat tax.

According to a study released Monday by experts at the Urban Institute and the University of Virginia [Reducing Obesity: Policy Strategies from the Tobacco Wars, by Carolyn L. Engelhard (Virginia), Arthur Garson, Jr. (Virginia) & Stan Dorn (Urban Institute)], a 10% excise or sales tax on fattening foods could raise $522 billion over the next 10 years. A 20% tax could raise $937 billion. Among its other uses (like paying down the deficit), that money could be used to defray the costs of health care reform or to curb the rise in obesity.

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A 10% excise tax on "fattening" foods could not be rationally administered. For example, a recent immigrant from Somalia who eats a Big Mac might, quite reasonably, not view the meal as "fattening."

Far better would be to put lines on Form 1040 by which taxpayers could report their height and weight. Based on that reported information, Congress could fashion tax rates that disfavor the obese. Coupled with this reform, the IRS could publish tables in the Form 1040 instructions that correlate height and weight in order to help taxpayers know what their marginal "fat tax" rate is.

Posted by: Anonymous | Jul 31, 2009 7:09:09 PM

Let’s face it, the idea of a fat tax is never going to work. The food-oholics will just switch to eating more healthy foods with lower taxes and still be just as fat if not more so then they were before. To advance the cause of the President Obama’s National Healthcare Plan we must progressively tax the clothing that the fatties ware, that should get their attention. The taxes must be progressive based on the size of their fat buts and their wallets. The larger the clothing size the higher the tax and the more expensive fashion clothing will likewise be taxed at a progressive rate. No more free rides for the Lane Bryant Plus Size porkers or the fat slobs at Casual Male; they can pay their fair share of President Obama’s National Healthcare Plan or go naked.

Peter Gurney
Knowlton Township, New Jersey

Posted by: Peter Gurney | Aug 1, 2009 12:29:33 PM

The idea of a fat fax is never going to work

Posted by: mdeals | Aug 3, 2009 4:33:36 AM

Peter Gurney, could we also institute a stupidity tax? One in which we tax individuals who think themselves intelligent while spelling "ware" instead of "wear" or writing "buts" as opposed to "butts"?

Although I don't believe the "Fat Tax" will realistically come to fruition, I must admit that to some extent I agree with it. But those who will suffer most at the hands of this tax are the individuals that have a lower social economic status and I think that something must done in lower income neighborhoods (where they can not afford more nutritious foods since it is more expensive).

Posted by: Tina | Aug 6, 2009 12:19:06 PM