A New Tax

I dislike taxes as much as anyone. I have a copy of Davey Crockett’s speech “Not Yours To Give” and I think it is true, albeit completely ignored since 1933.

But taxes are a fact of life, and some serve a correct and appropriate purpose. Taxes on gasoline to pay for highway repair make sense to me (if that’s all they were used for.) Few other taxes serve such a clear purpose. Frankly, I’m at a loss to think of another.

We cannot fix Medicare. Changing the eligibility age or increasing payroll deductions are pointless. As long as health care costs continue to increase in the double digits annually, Medicare will go broke. (More on that soon.)

I have a tax proposal that is targeted, encourages cost saving behavior (without expanding the nanny state,) and can be collected and spent with a minimum of bureaucracy.

It’s a fat tax.

Before you start yelling about discrimination, hear me out. Obesity is one of the largest cost drivers in our health care system. We are the fattest nation on earth, and getting fatter. The price in increased heart disease and diabetes alone is enormous.

It is easy to say “people should all go on a diet.” That fact is, as countries grow richer one of the first effects of new wealth is that people eat more. Even China is beginning to have an obesity problem. We are the richest country on this planet, and we have the biggest problem.

Despite this huge, looming public health issue, our free-market system continues to reward those who promote eating habits that are not only unhealthy, but in some cases life-threatening.

A national chain is currently promoting sugar-sweetened pancakes, drenched in strawberries preserved in red-dyed corn syrup, drizzled with sugar icing, and topped with powdered sugar. The promotion is designed to foster the impression that this is a seasonal offer because the strawberry crop is coming in, all though the fruit being used is about as “fresh” as Tutankhamen’s mummy.

A regional burger chain is advertising their newest sandwich. Three patties, four slices of cheese, SIX slices of bacon and a deep-fried onion ring.

So I can eat breakfast and lunch, ordering the “specially priced” promotional item in each restaurant, and have consumed on the order of four times my daily nutrition caloric requirement. I haven’t even gotten to dinner yet – traditionally Americans’ biggest meal of the day.

Do we really need to consume daily the dietary equivalent of what a Somali family of four gets in a week? Yet, it’s an acceptable business practice to spend millions convincing us that”s exactly what we should do. Government-sponsored health education doesn’t have a chance.

Here’s how my Fat Tax would work. You take a reasonable caloric level for decent health. Let’s say 1000 calories per meal. Any single menu item or price combo deal that exceeds that level would have to charge a penny per calorie for every calorie over. In the case of the burger above, that might make it a $17.00 menu item.

That’s it. No attempts to stop people from eating what they want. If you want to pay $17.00 for your bonzo burger go ahead. If you want avoid the tax by ordering three burgers with cheese, each one under the limit, go ahead. No penalty. You can eat all you want without ever paying a cent of tax. The restaurant just can’t encourage you to do it by making it the most attractive option.

We’d collect the tax through the same point-of-service systems that currently tally sales tax. You would exempt establishments that are too small to have a computerized register. Those are fewer and fewer, but let’s say less than 10 employees. If that makes hole in the wall joints hangouts for the orca-fat, so be it.

Finally, the money would go into the Medicare fund. No apportionment, no new bureaucracy. Just dump it in to spend on the rising health care bill of the obese.

Sounds fair to me.

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