It was reported in The Lancet last week that an international group of researchers are recommending that “junk food” should be taxed.

Watching a piece on the news last night on this issue it seemed that this proposal will follow what I see as the “usual pattern”.  Recent examples include: “transient guest” or bed tax, minimum price for alcohol, plastic bag levy, European transaction tax, bank levy, carbon tax and non-doms charge.

An organisation or government suggests a tax or charge.  The press report it.  A debate begins on whether the tax is to change behaviour or raise funds.  Often the proposer suggesting the tax is not sure or fails to make clear that the answer is both.  That often provides its opponents an easy line of attack.  In most cases no thought has been given to what rate the tax will be charged at or how and by whom it will be collected or even how much is likely to be raised.  Again if the proposers have not thought of this its opponents have an easy line of attack.

In some cases, such as when environmental taxes were being suggested, a cynical person might have concluded that the “change behaviour” argument was used by some backers when in fact they really just wanted the revenue.

Then the appropriate trade body argues that taxation is not the answer and some form of voluntary agreement will do just as well.  A trade body is used as individual companies do not want to be seen directly arguing about the matter in question.  If the proposal is by one government and affects a second government then a similar argument is likely to be used.

Then politics takes over!

A report from the BBC on taxing “junk food” can be found here and The Lancet here.