I assume that you have already read this, but I thought others may be interested in this paper that address the flaws behind a fat tax and other "internality" problems. See Against the New Paternalism: Internalities and the Economics of Self [http://www.cato.org/pub_display.php?pub_id=5531]. Like the paper suggests, adding a fat tax ignores the fact that people may have already negotiated the cost of increased weight amongst their present and future selves and therefore a tax would decrease overall utility and not increase it.

I am surprised that neither Becker nor Posner considered a “sin tax” such as a tax on unhealthy fats as a source of government revenue to be compared to other methods of collecting government revenue. While I strongly object to paternalistic government behavior as it so often gets it wrong relative to individual decision making (one just needs to remember the old FDA food pyramid), I generally support pigovian and paternalistic taxes if the revenue collected from them replaces taxes that are clearly less efficient methods of government revenue collection such as the corporate income tax.

The real question to me is whether there is “clear and convincing” evidence that the taxed behavior is actually a negative externality or if there is “evidence beyond a reasonable doubt” that the taxed activity is unhealthy, and if the revenue collected could be used to lower or eliminate a more inefficient tax. I require the higher burdens of proof in order to balance the tendency of government officials to excessively micromanage in order to appease special interests. Otherwise flat taxes on general behavior such as overall consumption are preferable to me.

Perhaps there should be a 'fat' tax on enders dealing in subprime instruments, interest only home loans, or ARMs. This junk has caused a deleterious 'inflationary fat' whose harm will soon become apparent to the national and global economy.
Who really wins or loses with excessively easy lending terms
or excessively low interest rates?

In the late 1920's buying on credit became widespread. Automobiles,
radios, washing machines - all became available to the American wage
earner - on credit. And they consumed.... and consumed in bolus mass.
On the stock exchange ten percent margin was available for
speculators. Borrowing became rampant. Stock valuation become
overvalued and assets relatively over consumed. The population of
consumers in need of a radio, washing machine, automobile, et. al.,
was rapidly depleted. Ongoing consumption at the median
credit-dependent bolus rate was impossible. Inventories accumulated
and workers were laid off, with the resulting inability to pay for
their own assets acquired on credit. The assets were then repossessed
increasing the already over supply. The deflationary macroeconomic
negative feedback system proceeded in a necessary and mechanistic
fashion.

Lenders were left with repossessed assets whose worth was less than
purchase value - with a falling population of potential consumers.
With less product demand factory owners with capital debt for
machinery and buildings were unable to maintain payments. Stock on ten
percent margin became more than just worthless, it became a liability,
as obligations to pay the entire purchase amount remained even as the
stock valuation decreased by 25, then 50, then 75 percent. As the
macroeconomic system unwound into a deflationary collapse in 1932; the
debtor of last resort, a debtor whose balance sheet was quite good,
became also the employer of last resort. And so as the US GDP
collapsed by 40-45 percent, the US government began its work projects
program creating some of the public infrastructure that still serves
its citizen to this day.

Fast forward three generations. The marvels of the late 1920's were
replaced by the computer, its software, and the new information age of
the nineties. Over borrowing and over investment in this arena left
warehouses full of enough fiberopic cable for a generation and an 80
percent collapse of the NASDAQ over the exact same time frame as the
DJIA top to bottom period from 29 to 32. 'Replaying 1929' - US's, not
the United States', but Urban Survival's insightful recognition of
what was transpiring, i.e., 1858's second subfractal's Groundhog's Day
to 1929 was an instant attractor to the website for all who
qualitatively, and for fractalists, quantitatively, appreciated the
nature of cyclical events.

1932 was not 2002. The internet collapse, while wiping out more than 6
trillion dollars of paper value, had little effect on the GDP. Times
were different. A strange set of world circumstances existed in 2000.
Emerged was both a single superpower with an unparalleled military and
nuclear arsenal and a rapidly evolving, highly capable and rising
manufacturing giant with a massive population willing to work 60-80
hours a week at 1/10-1/20th the cost of the superpower's worker. Even
with oceanic transportation of goods, the American consumer reaped the
benefits of these low cost items. American industry could not compete
and jumped in, closing their own manuafacturing plants, and began
marketing and enhancing the distribution system of foreign made
goods.

At the same time the Federal Reserve and Financial Big Business
synergistically created the last 'great' American industry. This
powerful industry increased the money supply faster than at any other
time in US history. That industry could be labelled 'US Lending
Unlimited.' In the 21st century, that industry has shoehorned the
average American citizen into the role of debtor of last resort. The
citizen-wage earner has been enticed into a speculative housing asset
bubble greater in proportion and magnitude than any prior historical
bubbles.

The new lending parameters have made initial house ownership less
expensive on a monthly basis than rental. They have divorced the
value of homes from traditional savings and wages. The new rules have
artificially inflated the purchase price of homes. Wages have not
proportionally increased, leaving the interest and principle debt to
wage ratio and long term debt burden significantly higher. Equity from
that 'artificially' inflated price has been extracted in record
amounts by home owners who have gone on a consumption spending spree,
bolus consuming items in a two-three years that might otherwise have
been consumed over a decade. Home values soared eventually pricing out
the entry population. Building continued and oversupply resulted.

Now to this mix comes higher property taxes, higher insurance rates
especially in eastern and southern coastal states, and a large
population of readjusting ARM's with higher monthly payments. The
inflationary true debt burden and costs become too many straws for
the camel's back. The oversupply of washing machines and automobiles
in 1929 and fiberoptic cable in 2000 now resonates with the incipient
cateclysm in the over supplied housing market in 2006. The money made
by the builders which was no longer being invested in the housing
markets found its way into the equity market, the last game in town -
for one last blow-off. The composite Wilshire nominally is still 1100
billion or so below its March 2000 value and using housing prices as
dollar-denominated purchasing power is valued at perhaps 60 percent of
its March 2000 worth.

Meanwhile there is very little the US can exchange with its Eastern
'trading' partners except its paper currency and a promise to pay
interest on that paper. This strange symbiotic relationship has
provided 'the glut of world dollar savings' that has serviced the US
federal debt and maintained low interest rates. The US dollar, because
of America's superpower stature, continues and will continue to have
value in its purchasing ability of dollar-denominated oil. As
commodity assets, equity assets, and real estate assets deflate, the
value of the dollar will increase in its purchasing power. Friday's
breakout of the dollar is occurring as an expected coupled event with
the collapsing US housing market and incipient uS equity collapse.

So who wins when credit is so unregulated and made so easy that not to
borrow is to lose money? Who wins when real ongoing inflation creates
a disincentive to saving? As the economy collapses; and folks are
unable to repay their loans; and lenders acquire assets that cannot be
sold; and the world becomes a much more dangerous place - the answer
becomes apparent: no one.

Gary Lammert

I'm going to go non-Libertarian here, but I've always advocated municipalities using collection of "sin" taxes for health-related relief only--not general budget balance. (California does this to some degree with their tobacco tax.)

If leveraging a behavior modification tax is the ultimate goal, shouldn't the tax proceeds be used to pay for healthy food subsidies (seed money for organic stores in low income neighborhoods?), etc.? I realize that example may be the worst one for a die-hard group of economists, but behavior modification relies upon things like this.

Additionally, one of the most enormous direct expenses--and rising--related to obesity for folks on Medicaid (aside from co-morbidities), is bariatric surgeries and complications. Could these be directly linked in some way to the tax? I think if tax payers saw a direct link to the dollars and problem there would be a bigger investment in discouraging healthier behaviors. Why don't we see direct advertising like we do with tobacco and drugs (ala, "this is your brain on drugs")?

With all of that said, I don't even support this fat/food tax--ultimately the net gain is unsubstantial and regressive. HSAs are even worse--they draw healthy people from the general risk pool, making health insurance more costly and unattainable for the people who really need it (sick and poor--not necessarily people who make bad health decisions); this will put more people on public assistance or without insurance. Furthermore, HSAs still expose people to a substantial amount of risk and cost, they just cushion the catastrophic costs. These are not an answer to rising health care costs.

Why not place a sin tax against fat-induced health care expenses? Obesity itself isn't really a problem to the rest of us, but it does become one when lipo-suctions and triple stomach staples are needed.

It's great that sugars were also blamed. Has anyone checked an Oreo nutrional factsheet lately? A cookie has as much calories as a thick slice of bread!

Note that it is not at all clear how high the externalities of eating junk food are- or if they are even positive! Certainly, in the short run, people who harm their health by eating fatty foods may increase the cost to taxpayers. However, these people may also die younger, thus subtracting whole years that they would be collecting social security and medicare.

Put this way, suppose the average cost of supporting someone through a terminal illness is I, and the cost of supporting someone through a year of health is (on average) H.

If a health person lives an average N years their cost is N*H + I

If one decreases one's lifespan by Y years, their cost is instead (N-Y)*H + I

These calculations are rather chilling, and I personally would still support government taxatioin of unhealthy foods, but we should be clear on the reasons.

"Sometimes I wonder whether much of the public outcry over the gain in weight of teenagers and adults stems mainly from the revulsion that many educated people experience when seeing very fat people. Surely, though, this should hardly be the ground for interventionist policies!"

Perhaps Prof. Becker is correct and my desire to to see measures adopted that will keep Americans from becoming more and more grossly obese is discriminatory and racist.

However, I think he underestimates the degree to which our society is affected by this epidemic of morbid obesity.

The contrast between the body habitus of the typical European and American could not be more striking. After traveling in Europe, one immediately sees the extent of the problem upon entering an American airport. A large fraction of the American populace is not just obese, but grossly and morbidly so. Many are grotesquely obese, inhabiting huge deformed bodies for which every movement a challenge. Such miserable people are physically challenged every day in thousands of ways. Is this really the direction we want our
society to be going? If the problem is largely caused by technological advances on the part of the food industry in advertising and food science that makes their product almost addictive, government regulation is surely the only remedy.

Several years ago, I was at a Waffle House in Tampa. Two seats away was a man who quickly at a waffle, and washed it down with a tall coca-cola. The waitress told me it was his morning routine. This was Pete Sampras, the number one tennis player in the world. Perhaps his physical activity made him impervious to the effects of such daily meals.

With that said, I would love to see a couple things encouraged by the government.

I. Encourage the use of public and mass transit over car use. There is more daily movement with this lifestyle. I'm definitely a few pounds lighter as a result of my switch (despite the more frequent visits to the street corner coffee/latte shops) and feel a little more energetic. Perhaps the latter is due to the Becker/Posner blog.

II. If influencing food choice is the goal, this may be better accomplished this by encouraging the development of co-op grocers, in low income areas. My infrequent trips to low-income areas give me the impression they don't have much choice as consumers - only big corporate sugar/transfat/fiberless foods. Although, co-ops may cost them more, a significant number may decide to pay for this anyway.

III. No incentives for Super Walmart and other big-boxes that sell a great deal of junk food at low prices. First, they don't need the incentives. Second, the public costs of these incentives and support services for their employees may outweigh the benefit of the few jobs they provide.

IV. Build more tennis courts to better prepare for whatever McDonalds and Waffle House serves.

If foods high in fat and sugar, do, in fact, lead to higher heatlh costs related mainly to obesity, heart disease, and diabetes, then I believe imposing taxes on these goods is appropriate. I would prefer to see the price of all goods and services reflect the full social cost of producing and consuming them. Substantial taxes on cigarettes, alcohol, gasoline and other products that cause significant pollution are appropriate for the same reasons. I think the economy works best when resources are allocated as efficiently as possible. To approach that goal, I think we need to attempt to make sure that goods and services are priced to reflect their full social cost. Even if we go too far and levy taxes that push the final price of these products above full social cost, the excess revenue that accrues to the government sector can allow us to reduce other taxes that cause more economic harm.

Is there a way to directly incentivize excercise? Say, a subsidy for running shoes? Or by somehow proving that you're not sedentary?

it's not just 'educated' people who can't stand the sight of obesity. it's everyone.

Dear Prof. Becker:

I very much enjoyed reading your thoughtful analysis of the pros and cons of imposing a sin tax on fatty foods. I just wish to make two additional points:

1. Justin's point about obese people dying younger (an important point that has also been made in connection with tobacco). That is, while it is true that obese people on average have greater health problems than non-obese people, nevertheless obese people (like smokers) may actually impose less costs to society at the margin since they die younger.

2. Though I perfectly understand your argument about a higher price leading to a reduction in the consumption of fatty foods, Adam Smith famously argued that the opposite is true with respect to certain products (such as wine). If I recall my reading of The Wealth of Nations correctly, Smith argued that when wine was cheap and easily available, people actually drank less than when it was taxed heavily and difficult to procure. Perhaps Smith was just wrong, but I have always been struck by this argument because, though counter-intuitive, it seems to explain the different patterns of behavior towards drinking we see in America and Europe.

Regarding physical activity as a source of weight gain, the urban planning literature has asked if this might be partly due to how cities are designed. (If so, the corrective tax might be in the form of land use plans or development incentives.) That is, do people drive more (or, as children, are driven more) or simply walk less as a consequence of low-density suburban development that isn't particularly bike- or walking-friendly. Put another way, does sprawl make one fat?

In statistical language, as recently put by Matt Kahn's environmental economics blog, is the outcome of heavier people in the suburbs explained by selection (due to sorting) or treatment (caused by sprawl), or both?

There are massive quantities of research on this lately, almost all reporting that sprawl is somewhat to blame. But a 2005 NRC report finds the evidence to be quite indeterminate. One problem is that most research is cross-sectional, comparing the features of individuals (or averages of individuals) and their circumstances at any one point in time. These data are often aggregate (e.g., county-level), which is problematic, or from new household surveys of particular places, which are harder to generalize from.

To test for sorting, it would be better to track people over time and place. A new paper by economists Jean Eid, Henry Overman, Diego Puga and Matthew Turner, "Fat City: Obesity and Urban Sprawl in the United States," uses panel person-specific data from the National Longitudinal Survey of Youth. They find, "no evidence that urban sprawl causes obesity. We show that previous findings of a positive relationship most likely reflect a failure to properly control for the fact the individuals who are more likely to be obese choose to live in more sprawling neighborhoods. Our results indicate that current interest in changing the built environment to counter the rise in obesity is misguided." This is far from the last word on the issue, though.

Paco,

I doubt whether putting up the price of junk food would cause it to become more popular.

In my part of the world (Sydney, Australia) there is an interesting experiment going on that may shed light on this very question.

A Krispy Kreme donut franchise recently started operating here with, so far, a dozen stores. I went past one the other day which was selling plain donuts for $2 each. Our local hot bread shop sells plain donuts for 65c each.

Null hypothesis: availability of higher priced donuts will not increase donut consumption.

Predicted outcome: The Krispy Kreme franchise will either go broke or drop its prices to be more competitive.

I work with the National Association of Margarine Manufacturers so I’m well informed on this subject. Have you looked at a margarine label lately? You won’t find any soft or liquid margarine that contain trans fat, and trans fat levels of stick margarines have been greatly reduced. Margarine manufacturers continue to be the leaders in the food industry in removing trans fats from products, and they continue to innovate the market by adding healthy, functional ingredients such as antioxidants, omega fatty acids, and fat-soluble vitamins to products.

The margarine industry has made such an impact in providing healthy product that in 2005, when the Dietary Guidelines for Americans and the MyPyramid food guidance system was issued, liquid oils, and soft, trans fat-free margarine spreads were classified by the Dietary Guidelines Advisory Committee Report as helping to meet the essential fatty acids and Vitamin E needs of consumers.

To learn more about the benefits of margarine products, check out these links: http://www.margarine.org, http://www.cfsan.fda.gov/~dms/transfat.html#choice1 and http://margarine.org/pdf/inthenews_092906-nytimes.pdf

I'll keep this short.

Becker is right that pleasure counts, but there is no reason the state shouldn't prevent wife beaters from getting sadistic pleasure out of beating their wives. Becker admits that we're talking about teens who lack mature judgment, but leaves out that these teens are being raised without a stay-at home parent who monitors their nutrition, like the mothers of yesteryear used to do.

Much of the pleasure these teens are experiencing is a result of leisure. If the kids were sedentary because they were studying, perhaps Becker would have a stronger argument, but the kids are lazing about. They should be exercising more, have better diets, and study more.

Lastly, we need both carrots and sticks. We certainly should subsidize fruits and vegetables, but we also should penalize those who eat fatty foods. The tax can fund the subsidy. We should also mandate exercise in school and condition federal tuition aid on health. If you haven't the discipline to get in shape, there's no reason other taxpayers should pay for your education. We save you costs if you save us costs.

Becker seems to have ignored that fat people are free-riders.

Hmm... and I always thought it was an energy balance equation between caloric intake and caloric expenditure. In the past Americans had lower caloric intake and greater expenditures, yet that also resulted in poor health. Now it's the opposite, but the end result is the same, poor health.

Perhaps we all should be trained in the importance of diet, nutrition and exercise at an early age and continually indoctrinated in it until it becomes second nature. But probably an impossiblity, due the profit motive inherent in food production these days. We really can't afford to pull the pop machines and snack machines out of the schools and the like. It would cut into the paybacks the school boards get from the producers and I won't even mention the disaster the school lunch programs have become.

We really can't afford to pull the pop machines and snack machines out of the schools and the like.

We can't afford to divert into solar, wind, biodiesel or so forth either because it will upset the oil companies...What poppycock!

Margerine-yuck

Why do people consume food that is high in suger, saturated fat, and loaded with preservatives? Because it's easy!

Yes, I do derive pleasure from consuming a big mac, but I realize far greater pleasure sitting down for a home-cooked meal with my family. Unfortunately, after working 10 hours, picking up the kids from childcare and commuting home, the last thing I want to do is spend another 30 minutes preparing dinner. I would rather consume precious leisure time playing with my children than cooking alone in the kitchen. Fast food is my alternative and the trade-off is poorer nutritional content. So the decision is time vs. nutrition.

I suppose the time factor could be mitigated by eating fresh raw foods such as fruits and many vegetables... but doing so requires a stocked refrigerator and increased frequency of grocery store runs (to ensure fresh produce.) So when my options are grocery store vs. drive-thru, once again I face the time vs. nutrition decision.

Grocery stores recognize this issue and are now offering more "ready-to-cook" and prepared meal options. Per serving prices on these meals are competitive with fast food, but you still have to get out of your car, unbuckle the car seats, wait in line, etc. So the convenience factor remains an issue.

Surely there is a market solution to this problem. Imagine the increase in government size to develop and monitor a fat tax! Imagine the questions- Would a tax cover fast food only? What about restaurant food? Would a tax apply to specific entrees only, or all food on a restaurant's menu? Would a tax apply to grocery products? Red Meat? What about peanuts or olive oil? Avocado? Would a tax apply to organic foods high in fat?

Compliance would be a nightmare! As a society are we willing to pay for both the tax and the compliance costs? Alcohol and tobacco could serve as a guide for compliance costs...but it's pretty easy to determine whether a product includes alcohol or tobacco. Much harder to determine whether to tax an avocado. Do you tax a fresh avocado, or only if it's been turned into guacamole and eaten with tortilla chips? I can't even begin to imagine the nuances.

To MikeM,

You suggest/predict that Krispy Kreme donuts will either:

1) Go out of business due to its overpriced donuts, or

2) Decrease its price to compete with the mom-and-pops that sell donuts for 65 cents.

I can answer you with one word: STARBUCKS.

Before Starbucks, people purchased coffee for one dollar. Nowadays, people in mass, delightfully give an arm and leg for grande coffee with a 10 cent splash of vanilla.

STARBUCKS...

Interesting point, G-t-lily.

Australia has a long tradition of good coffee shops started by Italian immigrants in the 15 years after WWII. After arriving in Australia 6 years ago, Starbucks has managed to establish 50 shops. It is not exactly taking Australia by storm.

Gloria Jean is an Australian owned coffee shop franchise with similar shop ambiance to Starbucks but price-point closer to a good espresso bar (around $A2.50 for a long black or flat white). Gloria Jean has less focus on the exotic confectionary that Starbucks crams into some of its cups. By 2001 it had 285 stores in Australia (probably twice that now) and operates in 20 countries.

Starbucks may have been a success in the US because before them Americans did not know what decent coffee was like.

There are shops in Australia that make pretty good donuts too.

"Sometimes I wonder whether much of the public outcry over the gain in weight of teenagers and adults stems mainly from the revulsion that many educated people experience when seeing very fat people. Surely, though, this should hardly be the ground for interventionist policies!"

Uncharacteristically flippant from the learned Professor! One can see many an externality from obesity, which is becoming frighteningly prevalent in the US and other developed countries: increased healthcare costs and decreased labour productivity for a start, though I guess you could be callous and say that shorter life expectancy will lead to lower costs of pensions and old age care.

Slapping a fat tax on certain foods may not be so effective in that obese people will probably be willing to spend more if necessary anyway, eat larger amounts of less fattening food and so on.

Interesting to see acknowledged that there is obvious pleasure derived from consumption of junk food. Funny how the same never comes up when discussing drugs: how much pleasure the users derive. Banning something because it is harmful even though people enjoy it would compel the banning of kissing, for example, since aside from giving pleasure all it does is spread disease.

Perhaps the answer is for health insurance costs to reflect (as I'm sure in many instances they do) the standard of health of the insured; that would provide an incentive to change one's entire lifestyle rather than search for less heavily taxed junk food alternatives. And, of course, better education about health should be a priority, together with better food provided to schools and other state institutions. For a vivid demonstration of the benefits of such a programme, UK readers should refer to Jamie Oliver's work with British schools, and US readers should watch the alarming film "Supersize Me" - in particular the scences in schools and corrective facilities.

The fat tax might be another example of how one government intervention leads to another. The government partly pays for health care. So then someone says "tax fatty foods" to keep taxpayer costs down. There would be no argument like that if the government were not funding health care to begin with. Then we may need more bureaucracy to make sure the fat tax is being paid. Then what about illegal sales of fatty foods, like the sale of illegal cigarettes. We need more law enforcement for this. So the government keeps growing. Or people just might bake more cakes and cookies at home. Then fat consumption does not change but we have a deadweight loss since people have less time for other things.

Isn't there already a "fat tax"? Fatter people have fewer marital choices, fat women marry poorer guys, they are the butt of cruel jokes, they can't do fun active stuff, or enjoy it as much, and so on. Why would we assume that a tax would do a better job of deterring obesity? Perhaps someone could quantify the current fat tax and compare it to the proposed government fat tax to see the relative size.
I say there is a cost to even making such proposals, especially by Nobel Prize winners - it gives an implicit okay to other brainiacs thinking up good ways to improve their neighbors' behavior. I think the world has had enough experience with such good ideas and the suffering they have led to.

Dear Dr. Becker-

The irreverent comedy South Park took up the issue of online gaming's negative health effects in its season premier. I recommend that you enlist one of your research assistants to track down, via BitTorrent, the episode entitled, "Make Love, Not Warcraft."

Knowing several young men who suffer from World of Warcraft "addictions," I have no idea what additional costs might dissuade these gamers from spending hours in front of the computer. It is more than likely that my friend B****** knows that he is out of shape and lacking female companionship because he plays World of Warcraft for hours, but he seems quite content to forgo health and sex to play this silly online game. It's enough to make me throw my hands up and declare, "De gustibus non est disputandum!"

Why don't we just tax fat people?

I am only slightly joking. It does seem like the rational thing to do, given the rationale. The thin people who drink soda aren't the problem. It's the fat people who do.

It seems like this "fat tax" should be taken care of through insurance. It would make sense for insurance companies to charge them more for health care, whether they get it through a government agency or not.

Additionally, I think much more could be done with advertising, public awareness campaigns and pressure on companies to give healthy choices.

There is one last issue:

There just isn't access in the ghettos to the same healthy food that the rest of America has. Ofttimes, corner stores similar to 7-11 are the only options for people in extremely poor neighborhoods. Try finding something healthy to eat there. For instance, there has never been a full service grocery store in South Central Los Angeles. This is quite common in poor neighborhoods.

I don't have an issue with charging people for their choices, but in these cases, it's not much of a choice.

What an image, Becker and Posner pointing bony fingers at the obese masses - just like the ghost of Christmas future in the Dickens story. In robes and everything, except Becker and Posner are a bit more verbose.

The Russians have tried to tax vodka with mixed results. (High taxes cut some consumption but hard to maintain system.) However Russian male life expentancy is now 58. LA Times did a nice three part piece on population trends in Russia recently. They paint a very bleak picture.

I don't look forward to chasing donut "moonbakers". Of course, as moonshiners gave birth to NASCAR so moonbakers can give birth to racing donut trucks.

I don't know how far Becker and Posner want to go with this stuff. How about a tax on people with bad genes who reproduce? Require all couples to have genetic screening and if they have children without the screening, they must pay a tax. In addition, if they are considered at risk for defective children, they must pay a tax if they go ahead and give birth. Lets get the defectives out of the general population. Or at least tax them.

Aren't these less then healthy, or at least unattractive, offspring a burden on the healthy attractive members of society?

Chloe suggests taxing fat people. Fat people are people who pig out.

So, would this be a "pig out" tax or a Pigou tax?

In my previous post I do not want to imply that Becker or Posner want genetic screening.

I meant to say that Becker and Posner could push the fat tax advocates to see how far they want to go.

So when I wrote > I meant if it is a good idea to tax fat why not ask if these advocates want to tax genitically defective people.

I am scared of people like the NIH Scientist who wrote " …large fraction of the American populace is not just obese, but grossly and morbidly so. Many are grotesquely obese, inhabiting huge deformed bodies … If the problem is largely caused by technological advances on the part of the food industry in advertising and food science that makes their product almost addictive, government regulation is surely the only remedy."

The government should tax people, especially scientists, who do sloppy thinking!

Some Fat Lady: Imagine the increase in government size to develop and monitor a fat tax! Imagine the questions- Would a tax cover fast food only? What about restaurant food? Would a tax apply to specific entrees only, or all food on a restaurant's menu? Would a tax apply to grocery products? Red Meat? What about peanuts or olive oil? Avocado? Would a tax apply to organic foods high in fat? Compliance would be a nightmare! As a society are we willing to pay for both the tax and the compliance costs?

Uh, not really. Our tax code is complex, so taxpayers hire H&R block. The incidence of the compliance falls on H&R block, which makes a profit. Restaurants will just hire tax attorneys and so forth. Is that a net increase in costs? Maybe not. The subsidy for grocers and wholesalers of fresh produce can trickle down to restaurants in the form of cheaper prices for produce.

The opponents of the fat tax, it seems, are just making up invalid smokescreen excuses, probably because they are fat free-riders themselves.

The time v. nutrition "dilemma" could be better rephrased as "selling out your kids' health and increasing public health costs because you don't like to shop responsibly and lack the basic skill of cooking". Of course, free-riding is rational. But as Social Security beneficiaries free-riding off the labor of their grandkids should know, it is immoral.

W wants to use the tax code for social engineering.

I prefer a simple tax code that is used to generate necessary revenues. All too quickly a tax code based on rewarding good and punishing bad becomes a tax code for helping good friends and punishing the other guys friends.

I can play with an academic debate on a fat tax but the reality is it would quickly morph, in Congress, into a way to subsidize those powerful enough to organize and punish those who lack the resources to fight back.

As George Stigler might have argued on this topic, bad legislation almost always began with good intentions.

I wonder how feasible it would be to collect a fat tax (x per mg) at the manufacturer level, and just let them build it into the price charged to restaurants, wholesalers and retailers.

I would like to extend an invitation to you to join in on a collective blogging section of our upcoming winter issue of Reconstruction. The issue is the “Theories/Practices of Blogging.” In addition to the special section of posts on blogging there will be about a dozen essays on blogging.

The deadline is October 27th.

Our intent in this section of the issue will be to collect a wide range of bloggers and link up to their statements in regards to why they blog (something many of us are asked) and any statement they have on the theories/practices of blogging.

If you already have a post on this you can feel free to use it, or, if you are interested, you can submit a new one.

We will link to each statement from the issue at our site, with the intent of creating a hyperlinked list of statements on blogging that can serve as an introduction to blogging (or an expansion of knowledge for those already blogging).

If you are interested please contact me at mdbento @ gmail.com

W wants to use the tax code for social engineering.

No, I don't want to pay for your health costs, fat ass. I'm a right-leaning libertarian, you idiot.

I wonder how feasible it would be to collect a fat tax (x per mg) at the manufacturer level

It would be very easy.

To W, I must be a left leaning libertarian because I do believe in offering mental health services to those who so clearly are in need, regardless of ability to pay.

The world is a much better place when those who need help, seek it. And if they refuse to seek help, I hope they find a cave without electricity to vent their hatred at all the evil people that fill their otherwise empty heads.

BTW what kind of upside down libertarian demands that the government force the donuts from our lips.

W says that the government imposes on him a health care system that he does not like so he has the right to impose his views of good and bad on others. That is a libertarian view? The W definition of libertarian - Rule by the spitefully deranged.

You don't need to respond here W, just put on your little tin foil hat and send me a message.

W says that the government imposes on him a health care system that he does not like so he has the right to impose his views of good and bad on others.

That's a strange synthesis of a mischaracterization of two independent arguments I made.

True enough, imposing externalities on others, e.g., your kids, can be immoral ("Let's raid Johnny's college fund to pay for meth.") But my assertion that externalities should be internalized is not based on sectarian morality nor is sectarian morality the justification for limiting government action to efficient provision of public goods.

I never said "the government imposes on me" anything. "The government" to you -- the real nutbag -- is apparently a deity with its own freedom of action. In reality "the government" simply consists of the mass desires of the people limited by generally accepted considerations of fairness. My problem is not with some deity that you believe in called "the government" but with the other people in this society who are shifting their health care costs onto me. It is not a "government" imposition -- it's an imposition by fat people.

It is true that if "the government" had lesser power over health care or taxation, fat people wouldn't be able to shift their health care costs on to me. But it is also true that "the government" is currently constituted the way it is. Instead of denying reality, I am responding to it and articulating an argument for a change from the status quo that will improve my lot. If you had read my argument, you would see I am not arguing for bigger "government" in the least -- my proposal is at least offsetting.

I fail to see how protecting my bedroom safe from the theiving intent of the fat (a tyrannical majority if ever there were one) somehow conflicts with the notion that the state has a basic duty to protect its citizens, i.e., the Nightwatchman State. http://en.wikipedia.org/wiki/Night_watchman_state

I'll also note that "Libertarian Paternalism" -- apparently -- does exist, and that left-libertarianism is a coherent philosophy.

Libertarian Paternalism: http://uchicagolaw.typepad.com/faculty/2006/10/sunstein_podcas.html

Left-Libertarianism: http://en.wikipedia.org/wiki/Left-libertarianism

A book on left-libertarianism: http://www.amazon.com/Libertarianism-without-Inequality-Michael-Otsuka/dp/0199280185/sr=1-1/qid=1160972894/ref=sr_1_1/102-7693810-2105745?ie=UTF8&s=books

Apparently, you flunked Libertarianism 101.

W says that the government imposes on him a health care system that he does not like so he has the right to impose his views of good and bad on others.

That's a strange synthesis of a mischaracterization of two independent arguments I made.

True enough, imposing externalities on others, e.g., your kids, can be immoral ("Let's raid Johnny's college fund to pay for meth.") But my assertion that externalities should be internalized is not based on sectarian morality nor is sectarian morality the justification for limiting government action to efficient provision of public goods.

I never said "the government imposes on me" anything. "The government" to you -- the real nutbag -- is apparently a deity with its own freedom of action. In reality "the government" simply consists of the mass desires of the people limited by generally accepted considerations of fairness. My problem is not with some deity that you believe in called "the government" but with the other people in this society who are shifting their health care costs onto me. It is not a "government" imposition -- it's an imposition by fat people.

It is true that if "the government" had lesser power over health care or taxation, fat people wouldn't be able to shift their health care costs on to me. But it is also true that "the government" is currently constituted the way it is. Instead of denying reality, I am responding to it and articulating an argument for a change from the status quo that will improve my lot. If you had read my argument, you would see I am not arguing for bigger "government" in the least -- my proposal is at least offsetting.

I fail to see how protecting my bedroom safe from the theiving intent of the fat (a tyrannical majority if ever there were one) somehow conflicts with the notion that the state has a basic duty to protect its citizens, i.e., the Nightwatchman State. http://en.wikipedia.org/wiki/Night_watchman_state

I'll also note that "Libertarian Paternalism" -- apparently -- does exist, and that left-libertarianism is a coherent philosophy.

Libertarian Paternalism: http://uchicagolaw.typepad.com/faculty/2006/10/sunstein_podcas.html

Left-Libertarianism: http://en.wikipedia.org/wiki/Left-libertarianism

A book on left-libertarianism: http://www.amazon.com/Libertarianism-without-Inequality-Michael-Otsuka/dp/0199280185/sr=1-1/qid=1160972894/ref=sr_1_1/102-7693810-2105745?ie=UTF8&s=books

Apparently, you flunked Libertarianism 101.

W says that the government imposes on him a health care system that he does not like so he has the right to impose his views of good and bad on others.

That's a strange synthesis of a mischaracterization of two independent arguments I made.

True enough, imposing externalities on others, e.g., your kids, can be immoral ("Let's raid Johnny's college fund to pay for meth.") But my assertion that externalities should be internalized is not based on sectarian morality nor is sectarian morality the justification for limiting government action to efficient provision of public goods.

I never said "the government imposes on me" anything. "The government" to you is apparently a deity with its own freedom of action. In reality "the government" simply consists of the mass desires of the people limited by generally accepted considerations of fairness. My problem is not with some deity that you believe in called "the government" but with the other people in this society who are shifting their health care costs onto me. It is not a "government" imposition -- it's an imposition by fat people.

It is true that if "the government" had lesser power over health care or taxation, fat people wouldn't be able to shift their health care costs on to me. But it is also true that "the government" is currently constituted the way it is. Instead of denying reality, I am responding to it and articulating an argument for a change from the status quo that will improve my lot. If you had read my argument, you would see I am not arguing for bigger "government" in the least -- my proposal is at least offsetting.

I fail to see how protecting my bedroom safe from the theiving intent of the fat (a tyrannical majority if ever there were one) somehow conflicts with the notion that the state has a basic duty to protect its citizens, i.e., the Nightwatchman State. http://en.wikipedia.org/wiki/Night_watchman_state

I'll also note that "Libertarian Paternalism" -- apparently -- does exist, and that left-libertarianism is a coherent philosophy.

Libertarian Paternalism: http://uchicagolaw.typepad.com/faculty/2006/10/sunstein_podcas.html

Left-Libertarianism: http://en.wikipedia.org/wiki/Left-libertarianism

A book on left-libertarianism: http://www.amazon.com/Libertarianism-without-Inequality-Michael-Otsuka/dp/0199280185/sr=1-1/qid=1160972894/ref=sr_1_1/102-7693810-2105745?ie=UTF8&s=books

Apparently, you flunked Libertarianism 101.

You mention iPods twice as a "bad" that should be taxed, however I use my iPod mainly for exercise, and I must say, it has encouraged me to exercise for longer durations. Therefore this is a technology different than video games, TV, or the internet that require sitting down. If anything, there probably has to be a subsidy for iPods because it allows you to listen to music on the go, either that means simply walking or exercising. Same applies for the older Sony Walkman's, as the word itself suggests.

It seems to me that a simple story of 1-period supply and demand is not an adequate one when describing America's decision to expand its waistline.

How then, should we think about this choice?

Persons deviate from consuming the optimally healthy diet in order to gain felicity in the current period, and, because of this contemporary choice, incur a series of health related costs in the future. A person's decision to overeat, then, is like shorting a "health bond." Americans will opt to eat poorly until the utility they receive in the current period from eating marginally less healthy equalls the present value of the marginal loss of utility that they will receive in the future due to medical and other costs.

So while the current utility (and the inputs into that function such as food prices and search costs) that a person recieves from eating poorly must be taken into account, there are two other factors that must likewise be held in consideration:

1) The function that transforms poor eating today into future costs due to poor health.
Factors affecting this function include such things as be genetic dispostion and exercise rates--Wilson's PhD thesis points to this last factor.

2) The rate at which we discount these future health problems and their associated costs.
Factors such as the funding source of health care, social emphasis on appearance and interest rate will all affect this rate.

From personal annecdotal experience, Wilson's PhD arguement seems to be the most plausible explanation as a cause for America's expaning waistline. However, I am puzzled by the fact the this increase in sedentary entertainment modes and work environments has affected American and Europe an populations in different manners. Upon arriving in Europe for several months this past winter, it was obvious that these populations, equally affected by the technological and junk food revolutions, were much trimmer than the one I was used to seeing about in Chicago. I am curious as to how these other factors addressed here, but not in Wilson's PhD thesis or the above article on the notion of a Fat-Tax affect this contrast.

While W is quivering under his sheets fearing that a fat person will enter his bedroom and steal something, I don't want to know what, he wants to grant the government the power to tax the contents of my cupboard. I consider the contents of my refrigerator, my business. If I stock it with cake or carrots, that is my right.

I can claim that I think sex outside of marriage is bad and I think sexually transmitted diseases are self-inflicted diseases that the public should not treat. Public health is only affected to the degree that people refuse to take steps to protect themselves. Let AIDS victims die in the gutter with the dogs and the fat people. They should all take responsibility for their actions and not impose costs on others.

And W can then tax them for excess use of the gutters.

W seems to have some notion that he can write the perfect fat tax, that will clearly obtain his goal, skinny people, without any distortions once the enforcement of the laws is turned over to government agencies. That is somewhere over the rainbow thinking.

But if you want to tax fats and you don't think private interest will fight back to affect the legislation, you must be in a cave. I can only guess at what enforcement measures you might take against inner city kids selling home made fat laden muffins on street corners.

Schools should be required to provide healthy foods and offer exercise to students. I wish inner cities were safer places for children to play outside. I wish suburbs were friendlier to walkers. I wish, I wish, I wish.

But what if I said that the biggest reason for the increase in obesity was smaller families. Larger families have less to spend on food per child and larger families have siblings who engage in healthy physical activity with each other.

Let people make their own choices and keep the tax code simple.

"These important changes in the health delivery system would give individuals much greater incentive then [sic] they have at present..."

It's comforting to know that we are all human.

Dan C: Let people make their own choices and keep the tax code simple.

Taxing fat is keeping the tax code simple and is letting people make their own choices. The question is whether I should have to bear the costs of your choices. The libertarian answer is no.

I consider the contents of my refrigerator, my business. If I stock it with cake or carrots, that is my right.

Sure, if you pay for it yourself.

I can claim that I think sex outside of marriage is bad and I think sexually transmitted diseases are self-inflicted diseases that the public should not treat.

Except this, unlike efficiency concerns, is not a public reason. Are you really claiming that economics cannot be a public reason? You are a profoundly ignorant fellow, even for a left-libertarian.

First, medical studies have shown that thin does not equal healthy. While obese people are at risk for many problems being thin is not the best answer. Active people tend to be thin but the improved health outcomes are more related to the active lifestyle then the weight. If you want to live a long healthy life then be active and be blessed with good genes. However, remember that many bad things are just random and not a punishment for being bad.

The treatment of disease, and a public response, is an efficiency issue. We have limited resources so how much should we spend on a disease that is self-inflicted - obesity or a sexual transmitted disease?

I am sure that some fat people may not want to pay for the treatment of the sexual diseases of sexually active thin people. i.e. public funding of drug research etc. Why should I ignore their plea and grant your rant?

You seem to want to eliminate obesity but prefer to ignore the cost of sexually transmitted diseases. Why? Who knows? Who cares? Perhaps some libertarians aspire to a thin hedonistic lifestyle.

You don't like fat people and consider them a burden on you. You blame fat people for being fat, so you want to empower the government to make them thin. I missed that part in Mills writings. One can only wonder what you would do to drug users?

Still, I feel like I am arguing with a sixteen year old. Your tax can be simple, a tax on Big Macs, and have little real impact on the general population. Or your tax can go after all sources of fat, in which case it becomes a major legislative headache as various interest groups play the game. For example, infants require high fat milk, will you tax the milk of an infant or do you start carving exceptions? What do you think elected officials of dairy states will say? Please get real.

Professor Becker and Judge Posner seem to disagree with you on this topic, so I will remain blissfully ignorant of how your mind defines libertarian. Emphasis on the blissful.

Dan C: You don't like fat people and consider them a burden on you. You blame fat people for being fat, so you want to empower the government to make them thin. I missed that part in Mills writings. One can only wonder what you would do to drug users?

The problem with arguing with straw-men is that they don't exist. The issue is not blame or badness (though, apparently, you would love to argue with a religious zealot who is an anorexic BMI Nazi). I'm not fighting for the rights of "thin people" -- whatever that means.

The issue is who has to pay for Person X's lifestyle choices. The best answer is Person X, not Person Y or Person Z. I do not care whether Person X injects himself with heroin, so long as he does not inflict any harm on anyone else. But people who free-ride on the public health system and drive up other people's taxes so they can eat steaks until their heart explodes are, in fact, inflicting harm on others. Even John Stuart Mill recognized that increasing taxes means decreasing liberty.

"You seem to want to eliminate obesity but prefer to ignore the cost of sexually transmitted diseases."

That's silly. I took your raising of STDs as a sad attempt to mock the idea of there being a non-deontological, or public, reason for taxing fat. Because there is a non-religious and non-sectarian basis for taxing fat, your STD example is no longer worth discussing. A discussion on STDs would be a different thread.

An analog to your position is this: serial drunk-drivers shouldn't have to pay higher insurance premiums than anyone else, because everyone benefits from public roads and accidents are random events.

Which, of course, is silly.

Oh, and your craven appeals to public choice theory do not work. Fat people like blaming food companies for their situation and being fat is unpopular. There is an overwhelming majority, including fat people who see themselves as victims, that would love to tap into punishing food companies. (That isn't a justification of the proposal, just a rebuttal to the notion that it couldn't be realized without being consumed by special-interest bickering). An analogy to your argument is that gun control legislation could never be passed. Of course, that's false: Plenty of people hate guns, hate gun companies, and blame them for most crime, regardless of the evidence.

Perhaps anti fat advocates can follow the Danish model. Trans fats are by law, with criminal sanctions, limited to 2% of a product. It may not have led to better health outcomes, but at least this model has the benefit of being simple.

http://www.breitbart.com/news/2006/10/16/D8KQ0HF84.html

Or the anti fat advocates can look at the Disney model and just let the free market respond to changing tastes.

http://news.yahoo.com/s/nm/20061016/hl_nm/media_disney_food_dc_3

Dan C finally admits he hadn't researched the issue before he posted about it.