Obesity and Taxation

Stephen Kershnar
Learn to Love the Obese
Dunkirk-Fredonia Observer
December 1, 2009

Our society is considering a tax on fat-causing food and, perhaps, even on fat people. Daniel Engber writing in www.slate.com summarizes some of the recent movement on this issue. 80% of the states in the U.S. currently tax junk food or soda. In an interview in Men’s Health, President Obama was sympathetic to a federal soda tax. The New York Times and New England Journal of Medicine have recently called for a significant tax on soda. The former calls for a staggering $1.28 per gallon tax in New York. Other writers go further. In the New York Times, David Leonhardt writes sympathetically on the idea of discrimination against the obese. Writing in the Huffington Post, John Ridley calls for a tax on the obese.

The idea behind the soak-the-fat-people campaign is that they are imposing costs on the rest of us. According to New York Times writer Michael Pollan, the U.S. spends $147 billion to treat obesity. 30% of the increase in health-care spending over the past ten years comes from obesity and that it now amounts to roughly a tenth of all health-care spending. According to Ridley, this results in a cost of $1,250 per American household, mostly in taxes and insurance premiums. Obese people shoulder some of these costs. According to a Center for Disease Control study, in 2006 obese people spent 42% more than normal-weight people on medical costs.

Before the U.S. decides to slam fat people, it is worth noting that they already pay a significant price for their weight. Piling on taxes that are aimed directly and indirectly at them adds salt to their wounds.

Consider the economic price they pay. According to a recent paper in the Yale University’s Rudd Center for Food Policy & Obesity, one study found that obese white women (64 lbs. overweight or two standard deviations) suffer a 9% decrease in wages. This is equivalent to the difference of 1.5 years or education or three years of work experience. A second study found that severely obese white women suffer a decrease in wages of 24% when compared to their normal-weight counterparts. Severely obese black women suffered a 14.6% decrease and severely obese white and black men suffered 19.6% and 3.5% respectively.

Consider the social price they pay. According to Engber, obese women are half as likely to attend college as their peers and 20% less likely to get married. Because marriage helps to eliminate poverty, this makes obese women more likely to be poor. Writing in www.slate.com, Steven Landsburg points out that ugly women tend to attract husbands who have less educational achievement and earnings potential than do other women. If ugliness correlates with obesity, and this is not clear, then even when they do get married their choices are worse. Epidemiologist Peter Muennig reports that obese persons report being badly stigmatized. He reports that when one group of formerly obese persons was asked to choose between blindness and obesity, 89% chose blindness. He notes discrimination against them is rampant. There is evidence that parents discriminate against their obese children, doctors against their obese patients, and husbands against their obese wives.

Consider the health price they pay. Engber, citing Muennig, points out the obese are up to twice as likely to die as a normal-weight person. Also, obese women are seven times more likely to suffer significant illness or death and are especially vulnerable to clinical depression.

As a society, the U.S. not only has laws banning discrimination against minorities and women, but also has laws favoring them. Affirmative action laws often result in their being given preferential treatment even when they are less qualified than their competitors. In contrast to women and minorities, fat people get little protection. Only a few cities (for example, San Francisco and Santa Cruz, CA, and Washington, D.C.) and only one state (Michigan) prohibit weight-discrimination. The American Disabilities Act doesn’t protect them because being obese is rarely a disability from a physiological cause.

One response is that being obese is a choice and that being a minority or woman is not. The problem is that genetics plays a significant role in determining someone’s weight. One study in the American Journal of Clinical Nutrition found that weight (specifically, body-mass index) is 77% heritable. This is a little misleading, however, because this measures weight relative to same-generation peers and thus includes some environmental factors. Still, it does indicate that weight is significantly heritable and the magnitude of this effect lessens the degree to which someone’s weight is under his control.

A second response is that obese people are discriminated against because consumers, daters, and spouse-seekers prefer thinner people and society should not try to counteract the preferences of a free people. There is evidence for the former claim. Economist Steven Landsburg points out that beautiful people are more likely to be found in occupations where consumer preference plays a larger role, specifically, retail sales, waitressing, etc. However, the same might be true with regard to consumers and race or gender and if consumer preference does not warrant discrimination against women and minorities than neither does it do so for fat people.

What’s more, Engber and epidemiologist Muennig argue that anti-obesity campaigns increase anti-fat bias and that this bias exacerbates the health and discrimination problems obese people face. If this is correct, then the various taxes and insurance and employment penalties will cause fat people increased discrimination, isolation, illness, and death.

On the other hand, subsidizing something produces more of it, taxing it less. If the U.S. subsidizes food production (see the many agricultural subsidies) or prevents employers and insurers from shifting the costs of fat people onto them, then it subsidizes obesity. This will produce more obesity and spread its costs.

The obese already shoulder significant burdens. Piling on seems mean-spirited. On the other hand, failing to tax them in conjunction with other policies (for example, agricultural subsidies) threatens to subsidize obesity, thereby increasing the problem. Balancing these costs and benefits is a Herculean task. A free society doesn’t concern itself with whom employers hire, what people pay for insurance, and what attitudes people have toward their neighbors. However, because we are well on our way to socialized medicine (nearly half of health spending is done by the government) and have become a country of busybodies, the Herculean task is exactly what we’ll need to do.