Beating Butter: Denmark Imposes the World's First Fat Tax

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Although Danes have historically shown themselves willing to accept higher taxes that they deem beneficial to society, Puglisi doesn't believe this one fits that criteria. "The government says it wants to make people healthier, but it's talking with two tongues. It's just going to push more people to buy cheaper industrially produced products, rather than good food. It's insanely stupid."

Even medical professionals doubt the salutary effects of the law. "You can't predict the health effect of a food by looking at a single nutrient in it," says Dr. Arne Astrup, professor of human nutrition at the University of Copenhagen. "Take cheese, as an example. It's high in saturated fat, but it also contains calcium and protein that seem to change the fat's effect on the body. You would think that people who ate a lot of cheese would have higher risks of cardiovascular disease, but research has shown that's not the case."

With just under 10% of the population classified as obese, rates in Denmark are lower than Europe's 15% average, and fall significantly below the U.S.'s rate of 33.8%. Nevertheless, the average Danish lifespan of 79 years is lower than that of other Western European countries like Sweden (81.5 years), Spain (81.8 years) and France (80 years), a statistic that the departing center-right government (a center-left government took power on Oct. 3) hoped to improve with the tax.

However, Dr. Astrup says the tax ministry that proposed the measure is working with outdated data. "They based their decision on a report written in 2001," he says. "In 2001 all the available evidence suggested that we could achieve significant benefits by cutting saturated fats. But it turns out that a lot of that benefit came from cutting transfats, not saturated ones."

Many in Denmark believe the government was motivated more by financial concerns than health ones. Dr. Astrup is one of them. "This fat tax didn't evolve from proposals by the nutrition council," he says. "It was created wholly within the Tax Ministry because they were 1 billion krone ($180 million) short. They didn't do it to cut down on cardiovascular disease, they did it to close a budget gap."

If government estimates are correct (and the tax ministry itself admits that its predictions are rough), those 82 million kilos (180 million lbs) of taxable saturated fats should result in revenues of 1.3 billion krone ($233 million). Yet ministry advisor Christensen rejects the claim that the tax was motivated by the economic crisis and the government's need to generate new income. "Actually, the aim of this program of tax reform is to reduce taxes on labor, to reduce income tax," he says. "But the government has to find another source to make up the financing that it lost with those reductions. Instead of keeping income tax high, It decided to tax the unhealthy things."

Although public sentiment seems to be running against the tax, Christensen's reasoning has a fan in Sebastian Sejer, a 34-year-old graphic designer who lives outside of Copenhagen. "I know it's unpopular," Sejer says. "But I think it's a way to actually achieve something good while reducing the income tax. I work in advertising and I know that these small changes can make a difference in consumer behavior."

Research on countries that have imposed cigarette and soda taxes largely indicates that he's right: increased prices do lead to at least moderately reduced consumption. But are dairy-loving Danes ready to give up their wholefat milk and cheese? Sejer's own behavior raises some doubts. He went shopping over the weekend, and ended up buying the same butter he always does. "I know it's a contradiction. But it's not going to affect what I eat."

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