Friday, May 11, 2007

America Needs a Fat Tax, part 2

Occasionally, Chris ads a witty comment to my blog, but on my America Needs a Fat Tax post, he pulled out the stops. My reply was so long that I wanted to repost it, but it made no sense without his comment:

Sorry it's taken me so long to respond; life has been pretty interesting lately! Anyway, here goes:
First, the costs of obesity to the health care system have been vastly overstated, largely by groups who support various social engineering schemes. Those costs that do exist could be cut by reducing the heroic end-of-life care that most Americans receive. The last couple of weeks of life are more expensive than all the years that came before.
Second, the reason that these health care costs may indirectly affect you as a taxpayer is precisely because of the social policy interventions that you're advocating, particularly blanket mandates for insurance coverage. If insurance companies were allowed to offer consumers actual choices, then these costs could be adequately priced in. For example, at my employer, there is a surcharge for health plan participants who are overweight.
Most importantly, due to inefficient tort laws, health care insurance is one of the largest components of the rise in health care costs over the last twenty years.
The infringement of personal liberty that you refer to is not due to people doing what they choose with their own bodies. The infringement comes from the state deciding that I should have to pay for their choices. Further coercion doesn't fix this just as two wrongs don't make a right.
To continue with the outcome-based portion of the argument, it's useful to remember that these kinds of social "fixes" only lead to more problems -- the Law of Unintended Consequences. A problem we're avoiding talking about now in the Social Security system (by the way -- WTF? -- "nobody ever complains" about the Social Security system? C'mon). A better analogy would have been the tobacco industry...
Another point to consider is that a fat tax would almost certainly amount to a regressive tax on the poor. The relatively wealthy people shopping at Trader Joe's probably wouldn't pay much at all, while the day laborers, truck drivers, and fast food workers themselves who eat fast food at lunch would pay the most. It seems a little callous to demand that the poorest and least educated people should pay an ignorance tax, but since the state does the same thing with tobacco I suppose it's not an entirely inconsistent position. At least the lottery they run gives you a choice to not play.
Anyway, leaving costs aside as you tried to do (but came right back to in the very next paragraph of your response), even if the outcome-based arguments were against me I would still be against your proposal. The government's job is not to maximize the public's health, but to maximize liberty.
I find it ironic that the person who was the subject of your original post is decidedly NOT obese, and hence not a part of the "problem", and yet she would be obligated to pay your fat tax for her indulgence along with the porkers you are targeting. How is this tax in any way fair to her or the other millions of people who don't eat too much?
If you want to "encourage" people to lead healthier lives, I can think of many non-coercive ways to do so. To demand it from them by using the force of the state is the very definition of the nanny state. It is right of you to recognize that fast food is bad for your body and, if eaten to excess, will make you fat; that is exercising your reason. And it is right that you rant about it on your blog and encourage others to see the truth you've discovered. That is exercising your liberty. But using the state to coerce virtue takes the exercise of reason and liberty away from those you're coercing, whether you want to make them eat better, follow the teachings of the Holy Book, or enslave them to build the Worker's Paradise. The point is that you are not persuading people or educating them or removing obstacles for them to change themselves. You are forcing them, with the power of the state, to follow your dictates instead of using their own reason. That's what I'm against.

As ever, Chris, you take this all to a whole new level. Awesome.

While I concede some of your points, allow me to rebut:

1) End of life measures are one size fits all—gastric bypass surgery is only for those who can't put a fork down. End of life measures have almost nothing to do with willpower: we all deserve a shot at getting a few more hours on the planet if we can. (The exception to end of life care is a liver transplant recipient who starts smoking again—they shouldn't get another liver transplant.) What people choose to do with their bodies should influence (to some degree) the level of care they receive. This is why overstating the costs of obesity-related illnesses is moot. And besides, my doctor wife would say the costs are substantial, basely simply on the patients she sees every day.

2) I would agree that the tort laws need reforming. Not big news, but significant.

3) I don't think I ever said my personal liberty was being infringed upon because of other people's choices, but because of the costs I must pay because of those choices. If you take money out of your own pocket, I don't really care. If you take money out of my pocket (when it can be avoided), that pisses me off.

As for unintended consequences, I know full well that a fat tax might substantially cripple the fast food market, at least temporarily, which would have a global economic impact. The problem is that until someone says different, fast food companies are primarily in business to make money, not to make Americans healthy, which is a fundamental flaw in the system, in my opinion. Of course, consumers should choose whatever they want—it is their choice, after all—but that approach has left America in the grips of an obesity epidemic. At some point, you have to ask yourself if it's a good thing to make PCP or heroin legal—allowing consumers total freedom of choice is not always a good idea and the government does have some responsibility to step in and nudge people in a certain direction, if only for their own good. Lest we forget, longer living taxpayers are longer paying taxpayers. Denmark, for example, has outlawed all trans-fats, and Danes undoubtedly live longer lives as a consequence.

I used the Social Security system as an example to show how the government can play a beneficial role in improving national welfare even though it means money forcibly taken out of one's paycheck, the closest allusion to "forcing preferences on people at the butt of a gun". However, nobody complains about social security because everyone admits it's in the best interests of the nation, just as (I think) a fat tax would be.

A fat tax would surely have many unintended consequences, but I'll gladly take that new set of problems over our current set of problems because what we're currently doing is no longer working.

4) I don't buy the "taxing the poor and ignorant" argument, and never will. People have to eat something and when revenues from a fax tax subsidize healthier foods, healthier eating habits will emerge. In an ideal world, fast food chains would instantly wise up and make healthier fast food. If day laborers have a choice between a Subway $4 turkey sandwich at and a McDonald's $5 Bacon Double All-Beef Cheeseburger, which lunch will these blue collar souls choose? They'll make better eating choices and live longer with fewer health problems—how is this a bad thing? And if Subway's non-fatty sandwich were also subsidized by fat tax revenue, then that $4 turkey sandwich will become $2, which nerfs the financial burden that "taxes" the poor and ignorant. Problem solved.

Perhaps unsurprisingly, I'm a strong supporter of California's cigarette tax. Normally, I'm not fond of the government legislating personal liberties, but the California's cigarette tax revenue subsidizes anti-smoking campaigns (are they still doing that? No idea.), which rests squarely within the government's mandate to safeguard the public from the health hazards of second-hand smoke. Higher prices for cigarettes means fewer smokers, which is an intrinsically good thing, in my opinion. Higher prices for fast food means fewer fast food eaters. As long as fast food is so unspeakably unhealthy, expensive fast food is also an intrinsically good thing.

As for the "government's responsibility is not to maximize health, but to maximize liberty", here we must agree to disagree. I've lived in France and though their economy sucks ass, nobody can afford to eat expensive fast food all the time. Europe leans more towards maximizing health over liberty and they live healthier lives because of it. It is time to emulate that model.

And yes, anyone who eats fast food is subject to paying the fat tax, porkers or not. You wouldn't offer first time smokers their first pack for free, would you? A fat tax would act as blanket fee discouraging recidivists and first-time users equally.

Finally, the crux of the argument: reason vs. coercion. While true that many non-coercive ways can encourage people to lead healthier lives, America is still in the middle of an obesity epidemic. When do we admit our current actions have not gotten results? Besides, what reasonable person would smoke two packs a day knowing that it would probably kill them by an ugly disease? What reasonable person would intentionally gain 300-500 pounds? Many people, while sometimes reasonable about their actions in a detached and abstract way, do not show reasonable behavior in their daily lives (myself included!). Quite the contrary, they might admit they know what they're doing is wrong, but have no palpable disincentive to stop. A fat tax is that clear barrier to bad habits because when you have to choose between paying rent and eating fast food 50 times a month @ $10/sitting, you start to reevaluate your lifestyle choices.

People are going to do what they want to do. A bill to charge a fat tax will probably never get passed because fast food lobbyists will browbeat any attempt to pass it, or not enough Americans will support it. And that is true choice—America will decide for itself whether or not they need a fat tax to help them "kick the habit". Until then, the undereducated and unmotivated will continue their self-destructive behaviors unchecked. If a nation of blimps with a crippled health care system is truly the result of freedom of choice, then I hope it get gastric bypass surgery within my lifetime.

To read all this, you'd think I'm a gung ho socialist, I bet. In many areas, like when France bullies Apple to change their iTunes business model, I feel market-driven decisions are infinitely better than government interference. However, laissez faire economics does have its limits when it comes to public health and freedom of choice does not extend to letting people ingest arsenic on a daily basis. We know, as we knew with nicotine, that fast food causes health problems... so why aren't we doing anything to stop it?

In the meantime, I enjoy hearing dissenting views if only because it gets people talking about the issue.

Thanks, Chris!

1 comment:

Christopher said...

Well my friend, if you explicitly advocate the failed French Socialist model, then there's not much left to argue about but the facts.

The problems we face as a society now are largely problems of abundance, so I suppose that in the end economic dynamism can speak for itself.

Allow me to clarify on #3. The reason the money is coming out of your pocket is because the taxation system is already coercive. The reason other people's choices affect you is because the costs have been socialized.

Another factual point I would disagree with you on is your statement that "Lest we forget, longer living taxpayers are longer paying taxpayers." The whole problem of demographic implosion that Europe faces is due to their aging population. The retirement system, like America's, was predicated on full working lives and just a few years of comfortable retirement at the very end. But nowadays, people are living in retirement for decades as a net drain on the system -- not as payers into it (the Japanese solution is an interesting one -- build robots! But it remains to be seen if this technological fix can work.)

Anyway, I heartily recommend you read by Virginia Postrel, which was a formative influence on my views relating to this subject.