Skip to main content

Can sugar tax help Mexico's obesity epidemic?

By David Frum, CNN Contributor
updated 8:42 AM EST, Mon November 4, 2013
Mexican leaders are worried about their country's eating habits as Mexico faces growing obesity and diabetes problems.
Mexican leaders are worried about their country's eating habits as Mexico faces growing obesity and diabetes problems.
STORY HIGHLIGHTS
  • David Frum: Mexican Senate passed junk food tax and is mulling a tax on sugary soda
  • He says tax on junk foods is part of Mexican president's fiscal reform
  • Frum says such a tax failed in Denmark, but Mexico's problem is worse and worth try anyway
  • Frum: Problem raises issue of whether illegal immigrants to U.S. are really fleeing starvation

Editor's note: David Frum, a CNN contributor, is a contributing editor at The Daily Beast. He is the author of eight books, including a new novel, "Patriots," and a post-election e-book, "Why Romney Lost." Frum was a special assistant to President George W. Bush from 2001 to 2002.

(CNN) -- The Mexican Senate has just passed, 72-2, an 8% tax on candy, chips and other high-calorie foods. It continues to debate a special additional tax of about 8 cents per liter on sugary soda.

You can understand why Mexican leaders are worried about their nation's eating habits. Mexicans consume more sugary soft drinks per person than any other people on earth. Mexico suffers the highest incidence of diabetes among the 34 countries in the Organization for Economic Cooperation and Development. Mexicans are more likely to be obese even than Americans, the next runner-up.

Taxes on junk foods constitute just a part of a vast fiscal reform proposed by Mexico's new president, Enrique Peña Nieto. The overall plan aims to rationalize tax collections, curtail tax evasion and shift Mexico away from dependence on oil revenues. That's all a topic for another day.

David Frum
David Frum

The question for today is: Will fat taxes work?

There's reason for pessimism. In 2011, Denmark became the first country to impose a tax on fatty foods. Less than a year later, it became the first country to abolish the tax.

In the words of the Danish tax ministry: "The fat tax and the extension of the chocolate tax, the so-called sugar tax, has been criticized for increasing prices for consumers, increasing companies' administrative costs and putting Danish jobs at risk. At the same time it is believed that the fat tax has, to a lesser extent, contributed to Danes traveling across the border to make purchases."

Economists doubt that the moderate tax increases imposed in Denmark or proposed for Mexico will suffice to alter behavior. Adjusting for inflation, soda prices have declined by nearly 40% in the last three decades, and soda consumption was already disturbingly high in 1980.

To counteract such a price drop would require very large tax increases. But high soda taxes would likely encourage smuggling, tax evasion and other efforts to game the system.

It might work better to pay people to eat better, rather than tax them for making unhealthy choices.

Britain's Daily Telegraph reported in 2012 on a study at Northwestern University in which participants were offered cash if they ate more fruits and vegetables and exercised more.

Researchers were surprised to see that the participants kept up their new good habits even after the payments stopped, according the study's lead author, Bonnie Spring.

"We thought they'd do it while we were paying them, but the minute we stopped they'd go back to their bad habits. But they continued to maintain a large improvement in their health behaviors."

Mexicans applaud Obama immigration plans
College junior applies for legal status

The Mexican fat-tax experiment isn't bolstered by payouts of pesos. But it's probably still worth a try, and for three reasons:

First, the Danish failure is not dispositive. Denmark is a small place with a lively tradition of cross-border shopping. From Copenhagen, it is an easy 35-minute drive to Malmo, Sweden's third-largest city. Southern Denmark conveniently adjoins shopping in northern Germany. Mexico's population is concentrated in and around the capital city, far from any border.

Second, while incentives may work better than penalties in controlled experiments, it seems administratively unfeasible to operate such schemes on any large scale. It's one thing to weigh and pay 204 people, a very different thing to weigh and pay millions of them.

Finally Mexico's obesity problem is much worse than Denmark's -- and trending fast in the wrong direction. Even marginal improvements are worth pursuing there. In particular, simply reducing Mexican soda consumption could yield substantial benefits. When things are bad enough, policymakers have more reason to say: "What the heck, it's worth a try."

There's one last thing that needs to be said about Mexico's emerging experiment with fat taxes. When Americans talk about immigration from Mexico, there exists a tendency to speak of Mexico as a nation of desperate poverty, a kind of Somalia on the Caribbean, from which people naturally wish to flee by any means possible.

In fact, by any global standard, Mexico is a reasonably successful country. Mexico is not especially poor: Gross domestic product per capita is well above the global median. Within the Americas, Mexico is poorer than Chile and Argentina, but richer than Brazil and oil-producing Venezuela. Mexico's election system is fairer, more impartial and more reliable than that of the United States. Mexico is a country of free speech and free exercise of religion. It scores poorly on international rankings of social mobility. But so does the United States, and the indications are that Mexicans who migrate to the United States face particularly poor opportunities here.

There is one respect, however, in which Mexico has historically done poorly: providing enough work for all its people. Mexico's economy is slowed by a wasteful and expensive public sector and by rules biased toward monopoly and oligopoly in the private sector. Mexican elites have historically preferred to address their employment problems by encouraging the discontented to migrate northward.

Almost one in 10 of people born in Mexico now live in the United States, mostly illegally. This migration has helped Mexico avoid reckoning with its domestic problems, by the simple device of transferring the people disadvantaged by those problems to another jurisdiction.

Very understandably, Mexicans want jobs and higher wages. Aware that powerful interest groups in the United States have paralyzed the enforcement of immigration laws, many ambitious Mexicans have ignored U.S. law to seek those jobs and higher wages north of the border. That migration has had real costs for Americans, however. And when it is suggested that those who migrated illegally be pressed to return home, immigration advocates respond with horror: How can any decent person propose such a thing? Return these destitute people home to starve?

But as the Mexican Senate acknowledges, Mexicans are not fleeing starvation. Just the opposite. Americans should pay Mexico the respect of acknowledging its success and advances -- and expect in return that Mexican authorities will respect American law and cooperate in its enforcement.

Follow us @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of David Frum.

ADVERTISEMENT
Part of complete coverage on
updated 10:25 AM EDT, Tue September 30, 2014
The Occupy Central movement has already achieved much by bringing greater attention to Hong Kong's struggle for democracy, writes William Piekos.
updated 10:13 AM EDT, Tue September 30, 2014
As Prime Minister Narendra Modi visits America, Madeleine Albright says a world roiled by conflict needs these two great democracies to commit to moving their partnership forward
updated 10:04 AM EDT, Tue September 30, 2014
John Sutter: Lake Providence, Louisiana, is the parish seat of the "most unequal place in America." And until somewhat recently, the poor side of town was invisible on Google Street View.
updated 9:11 AM EDT, Mon September 29, 2014
Julian Zelizer says in the run up to the 2016 election the party faces divisions on its approach to the U.S.'s place in the world
updated 10:19 AM EDT, Mon September 29, 2014
Ruben Navarrette says Common Core supporters can't devise a new set of standards and then fail to effectively sell it.
updated 9:29 AM EDT, Tue September 30, 2014
Earlier this month, Kenyans commemorated the heinous attack on the Westgate Mall in Nairobi.
updated 4:57 PM EDT, Mon September 29, 2014
David Wheeler says Colorado students are right to protest curriculum changes that downplays civil disobedience.
updated 9:58 PM EDT, Fri September 26, 2014
Sally Kohn says when people click on hacked celebrity photos or ISIS videos, they are encouraging the bad guys.
updated 7:55 AM EDT, Fri September 26, 2014
Loren Bunche says she walked by a homeless man every day and felt bad about it -- until one day she paused to get to know him
updated 9:32 AM EDT, Tue September 30, 2014
ISIS grabs headlines on social media, but hateful speech is no match for moderate voices, says Nadia Oweidat.
updated 8:33 AM EDT, Mon September 29, 2014
A new report counts jihadists fighting globally. The verdict? The threat isn't that big, says Peter Bergen.
updated 5:37 PM EDT, Tue September 23, 2014
Ebola could become the biggest humanitarian disaster in a generation, writes former British Prime Minister Tony Blair
updated 12:58 PM EDT, Fri September 26, 2014
ISIS has shocked the world. But will releasing videos of executions backfire? Four experts give their take.
updated 10:39 AM EDT, Fri September 26, 2014
Eric Holder kicked off his stormy tenure as attorney general with a challenge to the public that set tone for six turbulent years as top law-enforcement officer.
updated 9:09 AM EDT, Fri September 26, 2014
LZ Granderson says Obama was elected as a war-ending change agent, not a leader who would leave behind for his successor new engagement in Iraq and Syria. Is he as disappointed as the rest of us?
updated 5:10 AM EDT, Wed September 24, 2014
Gayle Lemmon says the question now is how to translate all the high-profile feminizing into real gains for women
updated 3:00 PM EDT, Thu September 25, 2014
John Sutter says the right is often stereotyped on climate change. But with 97% of climate scientists say humans are causing global warming, we all have to get together on this.
updated 8:57 AM EDT, Thu September 25, 2014
Andrew Liepman and Philip Mudd: When we declare that we will defeat ISIS, what do we exactly mean?
updated 4:40 PM EDT, Fri September 26, 2014
Thailand sex trafficking
Human trafficking is a multibillion dollar global industry. To beat it, we need to change mindsets, Cindy McCain says.
updated 6:42 PM EDT, Fri September 26, 2014
The leaders of the GOP conferences say a Republican-led Senate could help solve America's problems.
updated 10:01 AM EDT, Thu September 25, 2014
Nicholas Syrett says Wesleyan University's decision to make fraternities admit women will help curb rape culture.
updated 9:02 AM EDT, Thu September 25, 2014
Mike Downey says New Yorkers may be overdoing it, but baseball will really miss Derek Jeter
updated 8:32 AM EDT, Mon September 29, 2014
Quick: Which U.S. president has authorized wars of various kinds in seven Muslim countries?
updated 2:17 PM EDT, Wed September 24, 2014
Women's issues should be considered front and center when assessing a society's path, says Zainab Salbi
updated 2:05 PM EDT, Tue September 23, 2014
A catastrophe not making headlines like Ebola and ISIS: the astounding rate of child poverty in the world's richest country.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT