Fat Tax

David Paterson has a big problem.  There are too many fat people where he lives and they are sending him broke.  But he has a solution and his solution marks him out as a pioneer.

David is the Governor of New York State and the problem is that the cost of providing even the limited free health care that he provides (called Medicaid) is blowing out as fast as the waistlines of his constituents.  Medicaid provides free health care to the very poorest of America’s citizens.  To qualify they essentially have to have less than $2,000 in assets, no income AND be a child, pregnant, elderly or disabled.

New York currently spends US$2,283 per person per year on Medicaid.  It’s not much by Australian standards, but it’s more than twice the US national average of US$1,026.  This coming year David expects to spend US$45.4 billion (with a B) on Medicaid.  This is a 51% increase in what was spent in 2000. 

A rapidly increasing part of the Medicaid bill is going towards the treatment of Type II Diabetes, heart disease and the other complications associated with obesity. Nearly a quarter of New Yorkers under the age of 18 is obese and almost half the Medicaid budget is spent on those children.  David’s solution is tax the cause of those diseases.  Here’s what his says:  

“To combat obesity, the budget proposes an additional 18 percent tax on non-diet soft drinks to discourage consumption of beverages that contribute to obesity, diabetes and heart disease, with all of the revenues to be dedicated to health care programs.”

Welcome to the future.  David’s solution to a runaway train is to attach lead weights to the caboose rather than turn off the engine.  It’s a solution first proposed by Dr Kelly Brownell,  director of The Rudd Center for Food Policy and Obesity at Yale in the early 1980s, but now a cash strapped government has finally gotten desperate enough to do it.

David is not alone in his need to do something about the cost of obesity, he is just the first to hit the panic button.  As more and more governments do the maths, you can expect the covers to come of those panic buttons quickly. 

If you doubt that we will ‘solve’ the problem this way here, you need look no further than the Queensland government’s ‘solution’ to the blowout in public dental costs caused by the consumption of sugar.  Did they ban sugar?  No, they mass medicated us with fluoride. 

Likewise, since David is obviously convinced that sugar is the problem, it might have been logical to consider banning it.  But in a move reminiscent of the ‘cure’ for smoking, he decided to tax it instead.

The interesting thing about David’s new tax is that he didn’t target fats.  I guess the sugar industry’s ‘research’ smokescreen about fat being bad and sugar being good ‘in moderation’ isn’t fooling those who have to pick up the tab for obesity.