Skip to main content

Can sugar tax help Mexico's obesity epidemic?

By David Frum, CNN Contributor
November 4, 2013 -- Updated 1342 GMT (2142 HKT)
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
September 22, 2014 -- Updated 1259 GMT (2059 HKT)
You could be forgiven for thinking no one cares -- or even should care, right now -- about climate change, writes CNN's John Sutter. But you'd be mistaken.
September 21, 2014 -- Updated 2132 GMT (0532 HKT)
David Gergen says the White House's war against ISIS is getting off to a rough start and needs to be set right
September 22, 2014 -- Updated 1300 GMT (2100 HKT)
John Sutter boarded a leaky oyster boat in Connecticut with a captain who can't swim as he set off to get world leaders to act on climate change
September 22, 2014 -- Updated 1917 GMT (0317 HKT)
Ruben Navarrette says making rude use of the Mexican flag on Mexican independence day in a concert in Mexico was extremely tasteless, but not an international incident.
September 22, 2014 -- Updated 1359 GMT (2159 HKT)
Michael Dunn is going to stand trial again after a jury was unable to reach a verdict; Mark O'Mara hopes for a fair trial.
September 22, 2014 -- Updated 2315 GMT (0715 HKT)
Is ballet dying? CNN spoke with Isabella Boylston, a principal dancer at the American Ballet Theatre, about the future of the art form.
September 19, 2014 -- Updated 2147 GMT (0547 HKT)
Sally Kohn says it's time we take climate change as seriously as we do warfare in the Middle East
September 22, 2014 -- Updated 1927 GMT (0327 HKT)
Laurence Steinberg says the high obesity rate among young children is worrisome for a host of reasons
September 19, 2014 -- Updated 1302 GMT (2102 HKT)
Dean Obeidallah says an Oklahoma state representative's hateful remarks were rightfully condemned by religious leaders..
September 19, 2014 -- Updated 1922 GMT (0322 HKT)
No matter how much planning has gone into U.S. military plans to counter the Islamic State in Iraq and Syria, the Arab public isn't convinced that anything will change, says Geneive Abdo
September 19, 2014 -- Updated 1544 GMT (2344 HKT)
President Obama's strategy for destroying ISIS seems to depend on a volley of air strikes. That won't be enough, says Haider Mullick.
September 19, 2014 -- Updated 1303 GMT (2103 HKT)
Paul Begala says Hillary Clinton has plenty of good reasons not to jump into the 2016 race now
September 19, 2014 -- Updated 1501 GMT (2301 HKT)
Scotland decided to trust its 16-year-olds to vote in the biggest question in its history. Americans, in contrast, don't even trust theirs to help pick the county sheriff. Who's right?
September 19, 2014 -- Updated 0157 GMT (0957 HKT)
Ruben Navarrette says spanking is an acceptable form of disciplining a child, as long as you follow the rules.
September 19, 2014 -- Updated 1547 GMT (2347 HKT)
Frida Ghitis says the foiled Australian plot shows ISIS is working diligently to taunt the U.S. and its allies.
September 19, 2014 -- Updated 1958 GMT (0358 HKT)
Young U.S. voters by and large just do not see the midterm elections offering legitimate choices because, in their eyes, Congress has proven to be largely ineffectual, and worse uncaring, argues John Della Volpe
September 19, 2014 -- Updated 0158 GMT (0958 HKT)
Steven Holmes says spanking, a practice that is ingrained in our culture, accomplishes nothing positive and causes harm.
September 18, 2014 -- Updated 1831 GMT (0231 HKT)
Sally Kohn says America tried "Cowboy Adventurism" as a foreign policy strategy; it failed. So why try it again?
September 18, 2014 -- Updated 1427 GMT (2227 HKT)
Van Jones says the video of John Crawford III, who was shot by a police officer in Walmart, should be released.
September 18, 2014 -- Updated 1448 GMT (2248 HKT)
NASA will need to embrace new entrants and promote a lot more competition in future, argues Newt Gingrich.
September 16, 2014 -- Updated 2315 GMT (0715 HKT)
If U.S. wants to see real change in Iraq and Syria, it will have to empower moderate forces, says Fouad Siniora.
September 18, 2014 -- Updated 0034 GMT (0834 HKT)
Mark O'Mara says there are basic rules to follow when interacting with law enforcement: respect their authority.
September 16, 2014 -- Updated 1305 GMT (2105 HKT)
LZ Granderson says Congress has rebuked the NFL on domestic violence issue, but why not a federal judge?
September 16, 2014 -- Updated 1149 GMT (1949 HKT)
Mel Robbins says the only person you can legally hit in the United States is a child. That's wrong.
September 15, 2014 -- Updated 1723 GMT (0123 HKT)
Eric Liu says seeing many friends fight so hard for same-sex marriage rights made him appreciate marriage.
ADVERTISEMENT