Will Fat Tax Come To United States?

Will Fat Tax Come To United States?

Now that Denmark has imposed a "fat tax" on foods such as butter and oil as a way to curb unhealthy eating habits experts in the United States wonder if a similar fax tax will come to this country to help raise money and serve to discourage people from eating fatty foods which can lead to heart disease and death.

Ole Linnet Juul, food director at Denmark's Confederation of Industries, says the tax will increase the price of a burger by around $0.15 and raise the price of a small package of butter by around $0.40.

The tax was approved by large majority in a parliament in March as a move to help increase the average life expectancy of Danes.

Denmark, like some other European countries, already has higher fees on sugar, chocolates and soft drinks, but Linnet Juul says he believes the Nordic country is the first in the world to tax fatty foods.

Hungary's Hamburger Law

In September, Hungary introduced a new tax popularly known as the "Hamburger Law," but that only involves higher taxes on soft drinks, pastries, salty snacks and food flavorings.

The outgoing conservative Danish government planned the fat tax as part of a goal to increase the average life expectancy of Danes, currently below the OECD average at 79 years, by three years over the next 10 years.

"Higher fees on sugar, fat and tobacco is an important step on the way toward a higher average life expectancy in Denmark," health minister Jakob Axel Nielsen said when he introduced the idea in 2009, because "saturated fats can cause cardiovascular disease and cancer."

Complex Fat Tax

Linnet Juul says the tax mechanism is very complex, involving tax rates on the percentage of fat used in making a product rather than the percentage that is in the end-product.

As such, only the arrangements of how companies should handle the tax payments could cost Danish businesses about $28 million in the first year, he said.

Linnet Juul's organization is pressuring lawmakers to simplify the tax, but said he is unsure what will happen when the new, center-left government takes office.