Petty Socialism Compells Governments to Introduce the “Fat Tax”

Wednesday, October 13, 2010
By Paul Martin

By: J M Finegold Catalan
Market Oracle
Oct 13, 2010

Rising healthcare costs and continuing recession-related fiscal problems have impelled numerous world governments to introduce a “fat tax.”[1] Support for a similar policy is growing in the United States, which according to leading intellectuals suffers from a collective “weight problem.”[2]

Fast-rising weights and a general deterioration of health have increased the volume of weight-related medical issues. The implications for countries burdened with socialized medicine (including the United States, which suffers from a government-restricted insurance market that provides limited federal healthcare in the form of Medicare and monetary aid to the poor) consist in an increased monetary burden for society as a whole.

Fixed low costs to the consumer, whether free (universal healthcare ) or relatively cheap (limited welfare, like that of the United States), have caused a predictable increase in quantity demanded.[3] While the consumer directly pays a below-market price for the service, the true cost is hidden since the rest of it is subsidized by the government. Therefore, the rising costs that come with a rise in quantity demanded are simply deferred to taxpayers. David Leonhardt, writing for the New York Times, puts it simply,

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