Thursday, February 03, 2005

Let's just tax fat people and be done with it.

This report (drawing from a WaPo story) says "legislatures in at least 25 states are currently debating more than 140 bills aimed at curbing obesity"... indirectly.
New state laws currently under consideration would ... attempt to tax the fat away.

According to the Post, six bills proposed by New York State Assemblyman Felix Ortiz (D) would slap hefty taxes on not only fatty foods, "but also modern icons of sedentary living -- movie tickets, video games and DVD rentals." Ortiz estimates his tax laws would haul in over $50 million a year, which New York could use to fund public exercise and nutrition programs.
Yes, I'm sure, just like NYS is using its tobacco settlement money to fund anti-smoking programs, the way it said it would. ;-)

Look, taxing fat in food to fight obesity is not only unfair to people who aren't fat and enjoy that food, but is also economically inefficient and costly for everybody.

I run 30 miles a week and bench press my weight regularly to keep my body mass index the same svelte 20 as it was in college days (believe it!) ... so why should I be deprived of, or have to pay double for, the occassional Monster Thickburger (much less a DVD rental!) when the urge comes on? Just because some lardbutt is stuck in front of the tube somewhere popping bon bons?

Depriving me of what I want, reducing employment at Hardee's, and cutting the local video shop's rental revenue from Stooges DVDs, is not going to get lardbutt up on his feet, away from the tube and off to Jenny Craig's. It's all a waste.

The most intelligent and accomplished guy quoted in the WaPo story comes closest to the truth...

"The word 'epidemic' doesn't even do this justice. It is one of the most profound medical crises we've had in generations," said Eric Topol, who as the chief of cardiology at the Cleveland Clinic treats the most serious obesity-related heart cases...

Topol said he would have every American weigh in at the post office on tax filing day each year. Slender taxpayers would receive a credit, while "the people ruining our health care economics would pay the standard tax," he said.

Close, but not quite right. You don't want to give a special tax subsidy for normal behavior (as opposed to especially good behavior) partly because by rewarding it as especially good behavior you promote what formerly was bad behavior to the new norm -- and also because these folks you are trying to reward, still a majority of the population, also bear most of the cost of the reduction in government services (or increase in budget deficits) that follows from the budget cutbacks due to the lost tax revenue. So what you give with one hand you largely take back with the other. (Putting all libertarian arguments aside for the moment.)

But the good doctor was almost there. There are few iron laws in economics, but one of them is: If you tax something you get less of it.

So if you don't want fat people, tax fat people. More precisely, tax the fat on their bodies. Don't tax fat everywhere you see it but on their bodies, if you want to get it off their bodies.

With this policy the people who are doing the wrong thing visibly pay the price for it, and what they pay might even pay for a small reward for the people doing the right thing. Justice.

Moreover, there actually now is an incentive for lardbutt to get himself up on his feet and off to Jenny Craig's -- he can put dollars in his pocket by doing so -- while I keep the few small pleasures remaining in my life, and Hardee's and the DVD shop maintain full employment. Efficiency!

So if one is serious about this, then the self-evidently logical and effective thing to do is increase everybody's tax bill by an increasing pecentage as their body fat percentage rises above a specified level. (Tax them for their children's excess body fat too.) And then have the states just get rid of all those other 140 pending laws.
Some insurance industry officials have suggested charging obese persons higher premiums...
Well, that's a reasonable small start. A sort of a tax. At least it places upon those whose behavior is creating the crisis a small part of its cost -- which is an incentive for them to change their behavior.
HHS Secretary Thompson, however, cautioned that doing so could run afoul of federal anti-discrimination laws.
Aye, there's the rub.

It is our government's official policy that when faced with "a profound medical crisis" caused by the behavior of a class of people who are "ruining our health care economics", it can lash out and penalize the behavior of everyone in sight -- from restauranteurs to DVD shop owners -- except those people whose behavior is actually causing the crisis. Because that would be "discriminatory".

How serious is that?

(The aforesaid moment has passed -- you may now resume considering libertarian arguments.)

PS: No, I don't really want to tax fat people. Because I don't want to use the tax code to achieve social objectives. (And because my body mass index isn't really 20 any more these days, either.)

But whenever politicians and social reformers of various stripes do propose using taxes to achieve social objectives by indirect means -- especially when they don't have the nerve to tackle the objectives directly -- these are the kinds of inefficiency costs and fairness issues we will all face. Don't let them fool you about that.