Sep 01

Here’s a proposal: why not institute a tax on fast food to discourage its consumption and offset the medical expenses of obesity, high cholesterol, heart disease, etc. in the same way we currently tax tobacco products?

Normally I believe LESS government is a good thing. We’re better off when we let the free market forces work uninhibited and keep the role of government to the most minimal scaffolding necessary to keep life civil. But as it stands now we already use taxation to deal with substances that have harmful effects on our bodies. We realized at some point that the tobacco companies were extracting massive wealth from the population and leaving behind polluted, illness-prone bodies, the cost of which was borne by the public. So we shifted some of that financial burden to them in the form of tobacco taxes, and in so doing, not only generated revenue to cope with the problem (cure) but also deterred consumption through higher prices (prevention).

If we determine that eating a Big Mac every day has similar health consequences to smoking a pack of cigarettes per day why would we not use economic incentives to address it?

So far the hurdles and objections I can fathom are:

  1. Aversion to more regulation: People don’t want government to tell them what to eat. It’s a personal choice. And agreed that it’s little odd to think about assigning this almost parental-type role to government.
  2. Aversion to more taxation: Most people don’t want more taxes of any kind.
  3. Different opinions on nutrition: The FDA got the food pyramid exactly upside down the first time around so it’s hard to see them getting a more complex program such as this right.
  4. Lobbying: MacDonald’s would be none too happy about this and they would surely put up a fight. The “healthy eating” lobby (if one exists) wields nowhere near the political power of the major fast food chains – it would be a tough battle to turn this into law.
  5. Socioeconomic bias: It could be easily argued that this tax would be paid disproportionately more by the lower class, the very ones who can’t afford it.

But if we could:
a) realize that we’re already using this exact strategy with tobacco.
b) recognize that we’re already bearing the costs of others’ poor eating choices through a Medicare deduction on every paycheck and funding a program that spends a good amount on illnesses caused by bad eating habits.
c) get a panel of independent nutritionists and economists to architect a plan that taxes based on saturated fat or some other measure of a food’s detrimental health effects.
d) slice through the lobbying issue by putting this up for a popular vote. Put the plan itself on a wiki for max transparency and solicit the collaborative input of many.
e) set up a program whereby food stamps count double on vegetables, fruits and other non-processed items so the lower class has an immediate healthy and affordable food option.

…that would be a step in the right direction. Tax revenues from the program would be split between educational campaigns on nutrition and paying down the single largest debt obligation we have, Medicare. You’d start to see menus at fast food restaurants naturally gravitate towards less-processed foods. Instead of letting large fast food chains get away with strip mining our nation’s largest natural resource (millions of people) while leaving behind diseased bodies for someone else to deal with, they would be forced to either start serving healthier foods or to bear the true costs of their business.

Would you vote for such a tax if it were on a ballot? If not, explain your rationale. How could it be modified to be more effective AND more palatable to voters?

16 Responses to “We tax cigarettes, why not fast food?”

  1. Maxim Porges says:

    I have a similarly-minded proposal, but it takes the government out of the picture for the most part. I’d like to see healthcare insurance go the route of car insurance, using the same free-market principles but putting the responsibility on the people and not the government.

    Start by reducing medical costs by making it possible for doctors to charge less for their services. Obvious solutions include malpractice tort reform; that bit will probably require the government to get engaged, but perhaps not at the federal level.

    Once doctors can charge less and operating costs are lower, insurance companies can charge less for their health insurance policies. At this point, my employer should increase my salary by some portion of the amount they used to pay for my health insurance. I’ll then take this money and will go shopping for health insurance on my own, just like I buy my car insurance.

    Insurance carriers will be forced to offer competitive pricing and innovative methods for cost reduction to win my business. This will include removing bureaucracy, simplifying billing practices, and implementing efficiencies in their own organizations (probably with technology). Likewise, doctors can innovate to offer affordable care, allowing them to better compete for my business and be innovators in cost reduction also using similar means. Dinosaurs who don’t want to change will go out of business; good riddance.

    With those changes in place, it’s now up to me to take care of myself. If I eat crappy food, smoke, and don’t exercise, my medical and health insurance costs will be higher, financially motivating me to change my behavior. If my behavior doesn’t change, eventually economic forces will leave me no choice but to change, or I will die and remove myself as a problem. If my behavior does change, the tobacco and unhealthy fast food companies will suffer as they lose my business; they will also either change their products or die. Once again, good riddance.

    This leaves open the issue of the uninsured. This is where the government would be involved once again, offering some solution that would probably need to be paid for by taxation or reduction in costs elsewhere. I think these are reasonable solutions to this problem.

    Obviously, I’m drastically oversimplifying what would be a long and difficult process, and a lot of things would have to happen in sequence with proper effect to make this work. To be honest, I don’t know of another solution that would enable the free market to solve our healthcare crisis, and I’m pretty sure based upon past experience that the government won’t be able to come up with a solution that doesn’t suck.

  2. Jeff says:

    Part of me agrees with you and can see how this might be beneficial, but like so many other government subsidies, taxes, laws, we have to first journey down the road of unintended consequences – a road not on the official government produces maps!

    1) New laws, taxes, etc generally tend to favor large existing corporations instead of small mom & pop businesses. Complying with the new regulations is easily handled by McDonald’s huge accounting dept, but the mom & pop hamburger stand already barely staying afloat cannot afford this, and shuts down. Mom & pop will now be eating at McDonalds.

    2) Who will decide what is healthy and what is now? What government panel has ever been “independent” and removed from politics? What precinct of heaven to propose to search to find these angels? Lawmakers will struggle to appoint those to the panel that will please their benefactors – those who are either too lax or too strict. We will end up with a loop-hole filled “compromise”.

    There is already a tax on poor eating habits – even higher health insurance costs, and an untimely death. Everyone is entitled to make their own personal choices, and those who favor gluttony over lifespan are rewarded (or “taxed”) accordingly.

    There is never a need to involve the government in people’s personal choices, so be careful what you wish for.

  3. JLR says:

    But then you would punish the people who just enjoy a big mac once in awhile. I think it’s a pretty silly idea. Smoking in general is just plain harmful. Having fast food once in awhile becuase you are under a deadline for work and too tired too cook shouldn’t be taxed.

    Next we’ll have to wrap everyone in nerf becuase we can;t guarantee they won’t hurt themselves walking around. Our society is way too interested in protecting everyone from themselves.

  4. Seth says:

    Valid points, but until there are alternatives it doesn’t make much sense. People are forced to choose unhealthy food options because they are cheaper and available. Until they offer tofu borgers and organic lentil burritos for .99 people are going to continue to eat the crap.

    Rather than tax everything, pass legislation which puts a cap and trade system on the max calories that items can have. For instance, there is a Heath bar shake at Baskin Robbins that is over 2300 calories! At the least there needs to be a Federal mandate to make them display the calorie counts on the menu . . .

  5. sean says:

    @Max – I like your plan better. Same net effect only the mechanism is capitalism vs. government taxation. It would probably be more efficient. The question is how do you get that flywheel spinning. Malpractice is definitely a major culprit behind inflated health insurance. You’d have to defang much of the legal threat of malpractice while keeping some kind of check & balance there to be sure it doesn’t swing from overly-litigated to overly-reckless.

    @Jeff – great points. I hear ya on the threat to small biz and the fact that the larger corporations can more easily absorb this new tax. It would deter Mom & Pop fast food joints from springing up and compel them to offer a more healthy menu. Re the question of “how do you define what constitutes fast food” – that’s another good one. That’s why I suggested yoking the tax to some type of metric like caloric content. I agree it’s a personal choice but unfortunately it’s one for which we all end up bearing the costs (my Medicare dedcution goes towards supporting the health costs for all those people that chose to eat Big Macs all their life). To your last point- we already involve the government in people’s personal choices. I fail to see how this is much different than the scenario with tobacco.

    @JLR – I’m sorry you think this is silly but I’m very serious in proposing it and I’m not the first. After googling around it looks like a couple different mayors have proposed this very thing in the past. I should make it clear that I’m not talking about taxing all takeout- I’m talking about taxing foods that are bad for you. The 2300 calorie shake that Seth mentioned should have a proportionately-higher tax associated with it while the teriyaki rice bowl takeout would not. I don’t care about protecting people from themselves- I’m just tired of paying for other people’s crappy eating habits. I like Max’s proposal of making this whole thing work more like car insurance.

    @Seth – I’m trying to figure out what the right economic instrument is to create the situation you’re describing. Burger and burrito joints will sell fatty food as long as it’s financially attractive. As soon as they can make more selling lentils and tofu, they will. The cap & trade idea is interesting- sounds similar to the proposed carbon tax. Bottomline: anything realigns the financial impact of bad eating so it falls more upon the people who are doing it is what I’m after. And I’m completely open to suggestions on better ways to do that. This fat tax idea was just what came to mind for me.


  6. Jeff says:

    @sean: Just because we made the mistake of involving the government in our lives in one respect does not mean that mistake should be expanded.

    As for the caloric content metric, even that can be cheated: for example, no calorie artificial sweeteners. So instead of getting all natural can sugars, you now get chemicals, and the fast food companies would jump on board to avoid the tax.

    @Seth – Do you really believe that the government can actually lower the price of anything simply by passing a law?

  7. sean says:

    @jeff – point well taken on the “two wrongs don’t make a right” idea of mimicking an existing flawed strategy.

    re: the metric used to define fast food- it’s definitely over-simplistic to think it could be based sheerly on calories, hence the proposal for a “panel of nutritionists” to figure out the right formulaic way of quantifying the detrimental quality of foods. something like ((sugars + calories)-(antioxidants + nutrients))/volume = FoodQualityScore

    The more I think about this, the more Max’s plan makes better sense. It’s way too complex a problem for a top-down strategy to work and it would open up too many loopholes to be exploited. Plus the extra burden on the small businesses alone is reason enough to scrap this idea in favor of a different approach. It was a fun thought experiment and got some interesting dialogue going but I’ll retract this proposal now and give my support towards a plan more along the lines of what Max proposed.


  8. Allen says:


    Seth, people are not forced to eat fast food. You need to hit the dictionary and look up the meaning of that word.

    The perception that people eat fast food because it’s cheap is wrong. Yes, there are some cheap items and sales. But as a whole it’s not less expensive than other options. For example, It’s less expensive for me to make myself a cup of coffee to take on the road and eat a bowl of Cheerios and a banana or toast and yogurt, and takes no more time, than for me to hit the road and stop at the McDonald’s drive thru. For $4, I can buy the entire box of Cheerios.

    The overall problem here though is the assumption that health and fast food have any sort of a direct connection. It’s a similar one we make between obesity and health. First show that fast food, each and ever time it’s consumed, causes any sort of a health issue, then let’s talk about what to do.

  9. […] buddy Sean Tierney recently posted on taxation for fast food. The topic touched on the health insurance debate presently taking place. […]

  10. This is great idea from one point of view, but very difficult to make it real. I think that the most important problem here is the definition of “fast food”. Is it every warm sandwich sold in a restaurant? Or every meal that you can get within 5 minutes from ordering? Or every sandwich that contains specified amount of calories? The definition is crucial in my opinion because this solution may affect people that are providing their own business with getting less and less clients. In times of economical crisis this solution could become the best way to bury the states under huge mass of debts. Unemployment would rise drastically, and that is a problem.

  11. Evan says:

    Hey Sean, thought provoking article. Although the information exchanged in the comments section has altered your take on the original premise, I think I’ll respond to it anyway. But before I start, let me recommend a good book on the history of capitalism in the US and the balance between the voice of citizens and corporate interests in Washington… “Supercapitolism” by Robert Reich. The author’s politics lean more liberal (having working under Bill Clinton) but he approaches the subject matter from a thoughtful plane of unbiased discovery. In my opinion anyway.

    As I understand it, low density high calorie food with copious amounts and salt, fat and sugar with little inclusion of vitamins or minerals are generally to be avoided in bulk. I think I read that somewhere. Yet lots of people still eat this food in mass. I suppose it’s easily attained, comforting, and pretty darn cheep. I can see the appeal and why it trumps the aforementioned rational on avoidance for the majority of Americans. I’m basing that statement on US obesity rates. So what does the civilized society at large do to stop the fattening of the red white and blue… If anything? Is there in fact added cost to Medicare for the treatment of illnesses linking to obesity? I’ve read studies that suggest that public health care is exercised more by conditions with low mortality rates that linger in the aging population like arthritis, mental health issues, osteoporosis, cancer and Type 2 diabetes. It’s rather cold to say but dying early of a heart attack costs a lot less than 30 years of pills and doctors appointments. Isn’t that the real problem, the people who’s lives are affected by those who treat their bodies poorly. Seems like a personal matter. Our government, representing the will of the people, could step in to lend a helping hand but I’m not sure a tax is the right demotivator. An interesting idea though. The commenters above have explained this better than I could. However, I do have another idea.

    Fast food places are in business to make as much money as they can. They don’t care what they serve, just if people eat it and their margins are large. In order to drive prices lower, satisfy the expectations of Wall Street as well as their shareholders, fast food companies need cheep labor and even cheaper materials. In the case of FF burger establishments, mass consumption is taking its toll on the environment in the form of deforestation of the Amazon River Basin. Bet you didn’t think I was going environmental here. Check out this site to get an idea of what’s happening… “Brazil’s rise to become the world’s largest exporter of beef has come at the expense of Earth’s biggest rain-forest.” Apparently close to 80 percent of the deforestation is due to cattle ranching. I won’t get into scientific detail here but forests like this are the lungs of the planet and the planet needs to breath to survive. If we cut down all the trees… you see where I’m going with this. A vast majority of Scientists have been warning us about this for decades.

    Ok, what to do. Personally, I’ve been writing my Congressman and recommending a little nighttime reading that sheds some light on the subject. But if we’re talking about taxes, we can levy a liability on corporations that import beef from ranches that promote deforestation. And hug a tree while you’re at it. Can’t hurt. I would actually just settle for a change in attitude towards protecting the environment instead of harming it in pursuit of the abundance of cheep consumable products.

  12. mirandarencontre says:

    So agree with you!!! And for those who eat fast food only once in a while, well, they can pay a little bit more…Good idea!

  13. will says:

    Ha; I agree with this, although it poses a slight threat to impoverished families.

    As disgusting as it is to consistently feed oneself on fast-food, it still can provide adequate nutrition, although it may be in relatively small doses.

    The concept of this may actually be promising (particularly to those who seek to enforce a healthier America). Yes, I stated “enforce”, not “build”. And no, I don’t advocate the idea that healthy living be crammed down our throats. I would like to see people take a better stance on their personal health, but it is not my job to make them do so. Ok…I’m a tad off-topic…

    If this tax were created, what programs would it subsidize?

  14. sean says:

    @will – I don’t know offhand which programs it would subsidize. They would likely be educational in nature and maybe they don’t even exist today. I don’t know if you read through the comment thread but I actually changed my position since writing the original post. The tax idea probably isn’t the right way to approach the problem. Max’s approach is more ideal. It’s worth reading his comment (first one).


  15. Megan Browne says:

    I also agree. There is nothing in the 1st amendment that says we have to obey this. If someone wants that privilage, they are open to anything they want. If people were to object to that, they can shove it.

  16. No! Eating a diet rich in these items already comes with well publicized downsides and adults should be allowed to weigh up these downsides and consume, or not, accordingly. If governments want to raise money then that's what TAX is for, it shouldn't be an instrument of social engineering.

    Make no mistake that the real purpose behind such proposals is the confiscation of more money from the population and not to make people healthy. If that were the true motivation then why not simply ban high sugar soft drinks etc? The answer is straightforward, such a ban would raise no revenue and proposals such as these are all about getting people's money and nothing to do with the public good.

Leave a Reply

preload preload preload