Sunday, August 02, 2009

Taxing the Wrong Stuff

I am amused by the idea of taxing junk food as reported by The Economist. Here is the logic of its supporters: junk food causes obesity. Obesity causes diseases. In state-sponsored health care system, the cost of curing these diseases has also to be shared by non-obese taxpayers. Thus, as the existing junk food consumption doesn't reflect true social cost, tax on junk-food shall be imposed.

This is nonsense. The Economist itself says that:
More important, junk food is not itself the source of the externality—the medical costs that arise from obesity. Unlike smoking, or excessive gambling and drinking, eating junk food does not directly impair the well-being of anyone else. And because obesity is determined by lack of exercise as well as calorie intake, its ultimate relationship with health costs is more tenuous than that of, say, smoking. It is possible to eat a lot of fatty food, exercise frequently and not generate any externalities. A more direct, though controversial, approach would simply be to tax people on the basis of their weight.
Double Whopper, anyone?


  1. Wow this tax will have a big impact for me, sir..hehe

    But, may there are some quiet logical reason for this tax. Dr Phil Edwards (London School of Hygiene and Tropical Medicine) said people who had obesity release more carbondioxide (from his/her fat) and it related to global warming. see complete article. It will be interesting because this is a good evidence how obesity have an negative externality.
    So, may the tax proposer choose wrong reason for junk food tax.

    O ya saya harap pak rizal mau berkunjung ke blog saya dan memberu komen thx..

  2. Assalamu'alaikum...
    Nuwun sewoe,
    Menapa punika pak rizal saking semarang??

    Menawi leres kulo bingah sanget kepanggih malih kaliyan pajenengan...

    kulo taksih kemutan nalika panjenengan wonten ing jl. arjuna...

    Mbok bilih kula klentu nyuwun sagunging pangaksami.

    Pls have a contact me if you feel that you are the right person what I meant on :


  3. eko, mas, alamat emailku ning nduwur sisih tengen.

  4. RT@rizal (jadi kyk twitter): "Unlike smoking, or excessive gambling and drinking, eating junk food does not directly impair the well-being of anyone else".

    Masak sih Pak it doesn’t directly impair the well-being of anyone else? How about children born from obese mothers, they surely are exposed to greater health-risk (diabetes, obesity). Moreover, there is a tendency towards hostility in people who overconsume junkfood (you must have seen Supersize Me?), thus they have quite a direct impact to society.

    Here in the down under, you can observe how junkfood play a big role in poor people’s diet (Unlike in Indonesia and some other countries where BigMac is considered almost a luxury). A friend of mine is doing a doctorate thesis in statistics, tentang whether it’s poverty or lack of exercise that causes obesity in Australia. His founding was: poverty. Murahnya Maccas (McDonalds)encourages the poor to eat Value Meals 3 times a day. Insane how almost everytime you visit a junkfood outlet you’ll see poor families (lengkap), lining up, eating in or taking out. I’m scared for those kids, yang akan tumbuh dengan nutrisi ngga seimbang (they should make a research on the causal relationship between overconsumption of junkfood-tendency of becoming serial killer).

    So I think taxing junkfood makes perfect sense di negara2 maju, where junkfood=cheapfood.

    As to taxing menurut body-weight…that’s just direct-crazy pak ;)