Good riddance to bad tax ideas that leave a bitter aftertaste



Can you imagine if Georgia placed a special tax on pecan pie? That’s what public health activists did in Denmark when they placed a tax on danishes, the country’s famous pastries.


THE TAX WAS so despised and so unsuccessful that according to a report in The Economist, it caused up to 48 percent of Danes to shop for groceries outside the country. German shopkeepers, not Danish waistlines, proved to be the winners. Denmark reacted to these and other unintended but predictable consequences by repealing the tax last month.

Consumers who didn’t run for the border to avoid higher prices on butter, cheese, meat and other dishes often switched to lower-quality, but still fatty, products. Taxing a nutrient also proved overly complicated and led to some healthier alternatives such as olive oil getting hit with a tax while sugary products were left untouched.

But the brethren of activists behind the Danish “fat tax” are looking to import these food controls to the United States, most recently via failed soda-tax ballot measures in two California cities. And they’re finding allies among politicians desperate for any excuse – in this case, waist sizes – to rake in new revenue.

But the Danish failure reminds us that governments can’t force people to change their tastes just by passing a law. People who want fatty foods or non-diet soft drinks will find ways to get them in spite of any tax.

For all the wailing about sweet drinks causing obesity, they only provide 7 percent of our daily calories, and people can continue drinking calories in spite of any tax. After all, orange juice and milk have at least as many calories as soda. If Danes were willing to leave the country to dodge the fat tax, there’s nothing stopping shoppers from switching from the soda aisle to orange juice or from buying in bulk.


THAT’S JUST one problem with using these so-called “nudge” taxes to change lifestyle choices: People don’t necessarily respond the way that politicians hope they will. Indeed, if the goal is improving the public’s health, taxing particular items can lead to perverse results.

Researchers from Cornell University conducted an experiment on a soda tax and found that people subject to the tax bought more beer than they did before the tax. You can try as you might to make a man drink water, but he might have other ideas.

Effective obesity-fighting policy does not come from using government power to stigmatize particular products and make our decisions for us. Cities and states that try food taxes will not enrich their citizens’ health but rather neighboring jurisdictions’ shopkeepers. Americans might not be able to shop for sodas in Mexico, but crossing state lines to spite paternalist policies is a longstanding tradition.


THE UNITED States taxing apple pie is just what public health activists – who see food as nothing more than delivery systems for fat, salt, and sugar – want. But if progressive California is any indication, their agenda won’t be moving forward as long as the people have their say. And if bureaucratic cram-downs enforce that agenda against popular will, the only winners will be in bordering cities and states.


(The writer is the Senior Research Analyst at the Center for Consumer Freedom, a nonprofit coalition supported by restaurants, food companies and consumers to promote personal responsibility and protect consumer choices.)