Taxing unhealthy food could take a bite out of the deficit.
RODALE NEWS, EMMAUS, PA—Two words that no one mentioned during the recent debt-ceiling debates were "sugar tax". Successfully beaten down by the food industry and angry citizens in every city where they were proposed, sugar and soda taxes don't seem to have much of a future in America. For Europeans, though, it's a whole other story.
On September 11th, Hungarians will have to start shelling out 10 Hungarian forint (or $0.05) for chips, sodas, chocolate bars, and other unhealthy foods now controlled by a "fat tax." Initially called the "hamburger tax," the extra Euros are being levied on any food that doesn't meet certain sugar, fat, and salt requirements.
Though Hungary's obesity rates are below those in the U.S.—about 20 percent compared with our 30 percent—the funds on the tax are expected to raise the equivalent of $100 million, enough to pay for state-funded health care for the nation's 10 million residents.
Hungary's move shadows that of Denmark, where a similar fat tax was levied earlier this year on products high in saturated fat. Obesity rates there are even lower than in Hungary, just 10 percent. According to FoodNavigator.com, who initially reported on Hungary's new fat tax, the Danish Chamber of Commerce opposed the move on the grounds that it could interfere with imports and revenues. But the Chamber also noted that the tax might come with unintended consequences, such as replacing saturated fat with additives that may or may not improve the health profile of a food item, not unlike the way saturated fats were demonized in the U.S. and then replaced with hydrogenated oils that are high in what we now know are dangerous, heart-damaging trans fats.