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THE TAX LAW AS DIET SCOLD

April 22, 2005

fatman.jpgA paper presented at UCLA yesterday discussed the use of food excise taxes to fight obesity. Commenting on the paper, UCLA prof Victor Fleisher has a specific suggestion:

Here's what I propose: an excise tax on High Fructose Corn Syrup. It's in all kinds of junk food, and hardly ever in healthy food. It causes diabetes. There's a close substitute, of course, sugar. But it's more expensive to process food with sugar, so the prices of really bad HFCS foods will rise a bit. Obese people will, at the margins, choose healthier foods. And healthy people who crave sweets can still indulge, just only with the real sugar at a slightly higher cost.

WHAT ARE TAXES FOR?

While the Tax Update is all for slimmer, more attractive people, we demur. From our perspective, there is one critical purpose for a tax system - to fund government. When you try to use taxes for something else - like making fat people thin - you erode the efficiency of the tax law in raising revenue by diverting resources to other things. You have to identify what "high fructose" is, or what foods are bad, and how to deal with a thousand other issues besides "what do I owe?"

From a more practical perspective, it is unlikely that any realistic tax on food will solve this problem. People will just, well, absorb it.

Hat tip: TaxProf blog.

UPDATE: Victor Fleisher responds, and we continue the conversation.

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Comments

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I agree that we need to cut the fat out of the budget!

Oh, sorry, my bad....This is about excercising an excize on our XL-size.

Actually, it's really not that funny. We've been warned that the health-nannies may have started with smoking, but their next target appears to be Big Macs and Snicker's.

I'm all for healthier lifestyles, but whatever happened to personal responsibility?

Or as one wise blogger said, "if you aren't responsible for what you stick in your own mouth, what are you responsible for?"

This is why I like some form of a flat tax. The social engineering that is attempted in the tax code is ridiculous. I think our founding fathers would go banannas if they could see our government now.

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