Shocker: Danes Learn Tax On Fat Doesn’t Work
The neo-prohibitionists don’t try to ban things as they try to tax them to death. But tax policy is static. Markets are dynamic. When the government institutes taxes, people react not by modifying their behavior in the way the government wants but rather by acting to avoid the tax by means both legal and illegal. Tax hikes on tobacco have created a black market for cigarettes (serviced, in some places, by violent gangs), and a tax hike on saturated fat in Denmark has resulted in Danes getting their delicious treats across the border.
Only one year after its implementation, the Danish government is planning to scrap the “fat tax.” The reason why: reports show that it simply doesn’t work.
Denmark is now likely to abolish the tax levied on saturated fats, as empirical evidence shows that its negative effects outweigh the benefits for the Danish Treasury. In particular, reports point to job losses in the food processing industry and Danes crossing the German border to buy cheaper products.
The proposals to scrap the fat tax have been included in the 2013 draft budget, which is currently under consideration by Parliament. Under current law, Denmark is applying a tax of DKK16 ($2.40) per kg of saturated fat on food items. This tax was introduced back in autumn 2011 to combat obesity and raise tax revenues.
Not only are these taxes an affront to the notion of individual liberty – the government shouldn’t be using the tax code to try and control our behavior – but they don’t actually work in terms of accomplishing the goals their proponents set out to accomplish.Tags: Asshats, denmark, nanny statism, prohibition