Could 'fat tax' hurt junk food industry?
Denmark recently became the first country to implement a tax on saturated fats, and other countries are likely to follow.
The country is the first to slap a tax on saturated fats. Now, residents will pay about 12 cents more for a bag of chips, 39 cents more for a small package of butter and 40 cents more for a hamburger, one Danish group calculated. Hungary also recently implemented a tax on soft drinks, pastries and salty snacks.
The movement could spread to other countries; Finland and Romania could soon follow suit. Governments around the world are desperate for cash, and the tax is one way to raise more money while appearing to take a stand on public health.
Would a "fat tax" fly in the United States? Check out the debate in the following video.
Post continues below video:
When does the trend start to become a concern for companies like McDonald's (MCD) and PepsiCo (PEP), which owns the Frito-Lay snack food line?
Right now, there doesn't seem cause for worry. In fact, one Denmark resident thinks people will buy more of those foods just to thumb their noses at the system. "Knowing the Danes, it could have the opposite effect," he told The Guardian. "Like naughty children, when they are told not to do something, they do it even more."
Advocates in the United Kingdom say a similar tax is needed. If the UK doesn't act, 70% of the British population will be obese or overweight by 2050, the spokesman for the National Obesity System told the Guardian. About 15% of Europeans are obese.
The obesity rate is about 33% in the United States and expected to reach 50% by 2030.
The real question is whether a fat tax is any sort of deterrent. Taxes generally don't get people to change their behavior, writes Stephen Gandel at Time. And a fat tax may unfairly punish the poor, since lower-income people usually eat fattier foods than rich people.
"Raise the tax on fatty foods, and you are only making the people who are most likely to need health care less able to afford it," Gandel writes. "And as a result, fat taxes can further increase the wealth gap in the country."
One study found that a 10% fat tax on dairy products only resulted in a 1% reduction in consumption. To really make a difference, the tax would have to be sky high.
| Tags: | europeKim PetersonMCDPEP |
hmm... I have a great idea. Lets increase tax on luxury goods. Per say... Imported Whiskey, not Jack Daniels. Imported Beers, not Coors. Imported Cheese. Brandname clothes. Stuff people can live without so that the only people who will be affected are rich people and stupid middle class who cannot save, so we are punishing stupid people and getting the rich to donate.
Honestly the rednecks in this country have it all wrong - instead of beating up on minorities or gay people who do them absolutely no harm, they ought to kidnap a few of these over-educated, under-brained, socialist policy wonks and drag them thru the mud behind a pickup truck . This country has thrown off the shackles of Puritanism before, and by golly we'll do it again.
Sounds like y'all think that the government cares about your health with this tax. It is just an effort to raise CA$H. They could care less about your health it is once again about grabbing more cash out of the working mans pocket.
It goes along with those Red Light cameras. They tout it as a safety concern and it is just an effort to fill their coffers in any way they can.
Politicians look out for big businesses and anyone else they will eventually get a kickback from. Has anyone seen a living wage being paid to any hard working people in the last 20 years?
MORE ON MSN MONEY
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
LATEST POSTS
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.
FIDELITY VIEWPOINTS
- How to sell covered calls - Fidelity Investments
- Savvy year-end tax moves to consider now - Fidelity Investments
- Seven ways to prepare for tax changes
- Five reasons an annual review is crucial - Fidelity Investments
- Take a look at mid caps now - Fidelity Investments
- State of the sector: Health care - Fidelity Investments
VIDEO ON MSN MONEY
ABOUT
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.

