March 17, 1997
If the citizens of the United States were actually saddled with all the various taxes proposed by the Clinton administration (and there have been quite a few) the tax code could become all muddled and confusing. We wouldn’t want that. So, I am hereby proposing a Fat Tax to replace the mishmash of taxes that have been run up the flagpole lately only to find no one saluting. By taxing the fat content of foods my Fat Tax combines all the virtues of a V.A.T. and the BTU tax and has implications for National Health Care as well.
One of the problems with the V.A.T. is that people tend to call it the “VAT Tax” which is redundant. You see, V.A.T. stands for Value Added Tax. So saying “VAT Tax” is like saying “Value Added Tax Tax” which is silly (not unlike “ATM machine”). So right off the bat the Fat Tax is easier to talk about without sounding like a moron because it really is a tax on fat, not an acronym for something.
Like a BTU tax, a Fat Tax would be a tax on energy. A BTU (British Thermal Unit) is, after all, a unit of heat. And a single BTU is equal to 742 calories. So if you thought that the BTU tax would be a great revenue raiser, well, multiply that by 742. A Fat Tax could be a gold mine!
Like the V.A.T. the Fat Tax is a hidden or “stealth” tax. The V.A.T., if we had one, would be “built into” everything you could buy. Nothing on your receipt would reveal its existence. Everything would just mysteriously cost more. The Fat Tax too would be paid by other people – General Mills, General Foods and a colonel or two — and passed on in the cost of the goods to the store. Nothing would reveal its presence so people would not be likely to complain about it. And if they did complain, it would be about those “price-gouging, exploitive corporations,” not the government.
A Fat Tax would be pretty much recession proof too. After all, everybody has to eat. Compare that to the income tax. If the country falls on hard times, income tax revenues drop and Congressmen have to cut back on their junkets.
Lots of people dodge the income tax by not having enough income to tax. What happens when folks have a bad year or lose their jobs and have no income? They get out of paying income taxes, that’s what! Does that sound fair? No, Siree. But five will get you ten these tax dodgers are eating. Probably every day too. That means they’d be paying the Fat Tax.
But people still have to eat even if they lose their jobs. It doesn’t matter whether they choose to cash in their savings bonds or sponge off their better-off relatives, they will still be buying food and that means paying the Fat Tax. So government doesn’t have to reduce its level of mischief making just because you’ve had an off year. So the tax base is broadened considerably by employing the Fat Tax.
One of the stated virtues of the V.A.T. is that, since everything would cost more, people would be more careful in choosing what to spend their money on. (That’s right, higher taxes will make us spend our money more wisely.) With everything, including the essentials, costing more, we’d all have less “disposable” income. (Disposable income is the money left over after paying for the things you can’t do without. Like taxes.)
Now we come to the best part, a bit of serendipity. Since foods with more fat content will cost more under a Fat Tax, the really fatty, unhealthful foods will increase in price more than food that’s Good For You. If the Fat Tax rate is high enough, people will start buying healthier foods. Then with people eating right, health care costs will go down. This will free up government money which would be better used for the National Endowment for Goofy Professors and pork-barrel projects in powerful senators’ home states.
A few caveats are in order. Some food industry companies, unscrupulous meat packers, for instance, will try to reduce the taxes they pay by cutting off more of the fat before they package the meat for sale. This would negatively impact revenues. The Fat Tax implementing regulations will have to ensure that all the fat in a cow, for instance, is taxed whether it’s packaged and sold or not. All beef should be taxed as if the fat were homogeneously distributed throughout a cow. Lean ground beef should bear just as much of the tax burden as regular ground beef otherwise people would eat the lean stuff just to avoid paying their fair share of taxes.
Also, not only fat itself should be taxed but also potential or “imputed” fat. The human body is a miraculous thing that can turn pretty much anything into fat. This means pretty much all carbohydrates would have to be taxed as well. And sugar. Sugar is just fat waiting to happen.
In fact we probably ought to apply the Fat Tax to everything made with sugar substitutes too. Tax it at the rate it would have been taxed at if it actually had real sugar in it. After all, if history has taught us anything, it’s that if you leave a loophole in your tax code, people will find it.