In Defence of the Fat Tax
Taxes are bad, but sometimes they are not
14 Jul, 2016
IN AN IDEAL world, death would not be certain and taxes would be either direct or indirect. Definitely, there would be no service tax, an arbitrary extortion tactic that the Indian Government hit upon many years ago and continues to deploy with abandon. However, we neither live in an ideal world nor an ideal country. This is the way things are, and should thus be the starting point for any meditation on the ‘fat tax’ imposed by Kerala’s new government in its maiden budget.
Junk food—including pizza, burgers and donuts—sold in Kerala by branded restaurants would invite a 14.5 per cent tax, which is pretty hefty by any standard. The state’s finance minister says that the motive is not really to make money but to improve the food habits of Malayalees. The other reason might, of course, be the CPM wanting to show that it is committed to multinational bashing, given that US brands like McDonald’s, Domino’s and Dunkin’ Donuts are the ones getting their knuckles rapped by this policy. Indian communists with no clear ideology left to hang on to must satisfy themselves with such small assaults on capitalism.
But, even if such underhand motivations were true, it is still a good tax. And if, as is being promised by the Kerala government, the next salvo in this battle is a similar tax on carbonated soft drinks, then it is all the more welcome.
The reasons are as follows:
• Punitive taxation has been used with great enthusiasm against alcoholics and cigarette smokers by every government in this country. This is because they recognise that such vices are difficult to ban, and therefore, for the right to sin against oneself, one must pay the state.
• Admittedly, it is a convoluted piece of logic that doesn’t make too much sense, but it does give huge revenues to the government while it feels good about making society better.
• Are burgers as dangerous as cigarettes and whisky? Not really. But diet has a direct correlation with the explosion of lifestyle diseases in the last few decades and junk food and soft drinks are right at the top of foods that are thought to be the cause of this.
• It is also true that the fat tax is unfair and non-egalitarian. Poor people will not be able to afford junk food as the tax makes it more expensive, while the rich can. But who says good eating habits should only be inculcated among the rich? And when the poor inevitably make the transition to the middle-class, the lesson will hopefully stay learnt.
• By this tax, the government sends a message that it is not cool to eat junk food. A quarter of a century ago, it was cool to smoke cigarettes and Rajinikanth made a career out of spinning them in numerous ways. But he announced a few years back that he won’t smoke on-screen because it encouraged his fans. Governments had started taxing cigarettes into orbit many years before him. They were right. People still smoke cigarettes, but it not cool to do so in public places. When Rajinikanth stops eating burgers in films, we will know the fat tax has won.
About The Author
Madhavankutty Pillai has no specialisations whatsoever. He is among the last of the generalists. And also Open chief of bureau, Mumbai
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