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Friday, October 7, 2011

Taxing the FAT?

There has been a whole lot of talk about people who are overweight paying more for seats on airplanes and health insurance in an effort to help cover expenses that can increase as a result of an individual being overweight or obese. The argument has been that those who cost more, should pay and pay more.

According to the Centers for Disease Control, the medial care costs of obesity in the United States is about $147 billion, yes, billion with a ‘B’.

Rather than directly tax the overweight for being larger, Denmark has taken steps to prevent the increase in weight before it is a problem and to help reduce the weight of the country by implementing a “Fat Tax”.

The first steps toward fat prevention using legal and economic pressure in Denmark were taken in 2004, when the Danish government made it illegal for foods to contain more than 2% trans-fat. This was followed up in 2010 with a tax on all sugary junk food.

The new fat tax, implemented Friday, affects all foods, including milk, cheese and butter. This means customers will be paying about $3 more per kilogram of saturated fats in a product.

There has been talk in the US about increased fees for insurance based on weight, higher costs for flights and other measures that could help off-set increased costs based on health risks and weight. There has even been some action taken in this direction. For example in 2008 the state of Alabama increased insurance rates for over 37,000 state employees determined to be unfit.

What are your thoughts?

Is it better to try to prevent a population from becoming overweight as Denmark is doing, or to increase costs based on weight, or do simply nothing?

Should those who cost more pay more?

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