Murphy: The Most Un-FAIRR Tax

With taxes front and center as a political controversy this year, it’s ironic that one report from a single organization in Great Britain has sparked a global wave of media coverage, all suggesting in a variety of doomsday headlines that a “meat tax” imposed by national governments is imminent and inevitable.

The group is called FAIRR, the Farm Animal Investment Risk and Return, and this investor group, which is dedicated to “putting factory farming on the agenda” must be taken somewhat seriously, since news agencies have reported that its members control some $4 trillion in capital.

According to FAIRR’s new analysis just released, meat will soon follow the same route as tobacco, carbon emissions and sugar: towards imposition of a “sin tax,” a levy on harmful products to reduce their consumption. The report made a big deal of the fact that meat taxes have been discussed in Germany, Denmark and Sweden, and that China in 2016 officially reduced its recommended national meat consumption by 45%.

“If policymakers are to cover the true cost of human epidemics like obesity, diabetes and cancer, and livestock epidemics like avian flu, while also tackling the twin challenges of climate change and antibiotic resistance, then a shift from subsidization to taxation of the meat industry looks inevitable,” Jeremy Coller, the founder of FAIRR and the chief investment officer at the private equity firm Coller Capital, told The Guardian newspaper. “Far-sighted investors should plan ahead for this day.”

By the way, The Guardian’s headline on that story was “Meat tax ‘inevitable’ to beat climate and health crises.”

Other news outlets followed suit:

The Independent: “Sin taxes on meat to fight climate change and protect human health, according to analysts”

Fortune magazine: “Move over, taxes on carbon and sugar: the global levy that may be next is meat”

Bloomberg: “Taxes on Meat Could Join Carbon and Sugar to Help Limit Emissions”

The report rolls out all of the talking points that the most rabid anti-industry activists relentlessly promote: livestock cause 15% of all greenhouse gas emissions, raising animals is the leading cause of rainforest destruction and processed meat is carcinogenic and causes heart disease.

There’s even a veiled reference to the assumption that the emergence of the developing world’s national economies is, in fact, a negative development. As the report noted, higher income levels mean that more people consume meat, and (allegedly) that’s bad.

Poking Holes in the Report
There are three gigantic problems with the FAIRR report.

First, not a word about the reality of replacing the caloric value of animal foods with plant-based sources. At the same time that “industrial farming” is viciously denigrated across the spectrum of advocacy, virtually all anti-meat industry proponents simply assume that current levels of agricultural productivity — based on industrial farming — can be exponentially increased without environmental consequences.

Even if the new alt-meat technologies under development manage to cheaply produce food products without involving livestock, the energy and substrates (nutrients) needed to fuel such systems, if they can be scaled up to feed another two billion people by mid-century, are hardly ecologically neutral.

Second, there are vast amounts of grassland acreage in dozens of food-producing countries around the world that cannot be effectively farmed to produce row crops but can support properly managed animal husbandry. If there is truly a global consensus about the urgency of ramping up food production to feed nine billion humans, that agricultural sector ought to be treated exactly opposite of FAIRR’s proposal: subsidization, not taxation.

Finally, the concept of a sin tax isn’t about reducing consumption, it’s about raising revenue.

Taxes on liquor and tobacco, for example, are reliably predicted and folded into state budget projections under the guise of paying for healthcare and related costs incurred by citizens who use (and abuse) those products. But those taxes, like virtually all other taxes, go into the state’s general budget, not into specific funds dedicated to specific budget areas, like healthcare, that are ostensibly impacted by consumption of those “sinful” products.

As numerous epidemiological studies have unintentionally demonstrated, the causes of such lifestyle diseases as cancer, diabetes and heart disease are multifaceted. Yes, a lifetime of heavy smoking or alcohol consumption greatly increases one’s risk of developing lung cancer or cirrhosis of the liver. But there are always complicating factors — diet and exercise chief among them — that determine people’s clinical outcomes. Otherwise, everyone who smokes cigarettes or drinks a lot of liquor would succumb to those diseases, and that’s clearly not the case.

And let’s not forget that consumption taxes, like a sales tax, are the most regressive form of taxation in existence.

If those FAIRR investors and their $4 trillion in capital truly cared about people, not profits, they’d be opposed to a meat tax, which would drive up the grocery bills for the people least able to afford it, not sitting in their corner offices smugly predicting that such a tax is inevitable.

Editor’s Note: The opinions in this commentary are those of Dan Murphy, a veteran journalist and commentator.