Are taxes on fatty foods having their desired effects on health?

In October 2011 Denmark introduced a tax on saturated fat, which was part of wider tax reforms adopted one year earlier. These reforms were intended to cut the highest rates of income tax from 62.8% to 56.1%.1

All food sold in Denmark is uniformly VAT rated at 25%—probably the highest food tax in Europe. Some confectionery products and sugary drinks are also subjected to additional taxes mainly to generate revenue. In 2007 a disease prevention commission recommended the introduction of even higher taxes on alcohol, tobacco, and confectionery as well as a new tax on saturated fat. The aim was to improve public health and increase life expectancy in Denmark.

Other governments have implemented similar “health” taxes,2 and others continue to debate whether to do so. But can health outcomes be improved through taxing food, and how should the impact of such taxes be evaluated?

Taxing saturated fats is controversial partly because saturated fats are naturally present in many foods, and only consumption greater than 10% of total energy intake is considered unhealthy.3 The fat tax in Denmark amounts to an additional 3%, for example, on the price of minced beef, 14.6% on whipped cream, 13-16% on rapeseed and sunflower oils, and 30% …