They Said What?

Home » Obesity » Johnson & Johnson Proposes a “Fat Tax” on Businesses

Johnson & Johnson Proposes a “Fat Tax” on Businesses

Do you know whether heartburn pills are safe for long-term use?

This J&J/Goetzel/Vitality proposal is a Fat Tax, pure and simple.  If they are right about shareholders caring how many overweight people a company employs (and they aren’t), it is a tax on overweight employees, each one costing the company a slight amount of its market value.  If they are wrong, this represents a pure transfer of wealth from corporate America and their employees to companies like Johnson & Johnson and Vitality.

Read the full posting here.   Comment and share it.



By the way, these wellness people don’t understand math any more than they understand wellness.  One of their premises for the Fat Tax is that over 14 years, companies with wellness programs outperformed the market. Besides failing to use sector indexes as benchmarks, they don’t understand the way compounding works. Suppose the average market performance is set to 0%. If all your stocks perform at a market level, your return will be 0%. However, if half of them increase 10% a year and the other half decrease 10% a year, you’ll be way ahead of the averages because each year the 10% increases are applied to an increasingly larger figure, and the 10% decreases are applied to an increasing smaller figure.  And if you look at their portfolio, it’s disproportionately weighted to the healthcare sector, which boomed over the period, and the financial services sector, which dramatically contracted.  Towards the end of the period, the performance of Citigroup etc. didn’t matter any more.

This is true even if you set the market performance to a figure other than 0%.  It’s just clearer this way.





  1. Gerbs says:

    This is as bad as it gets. Pure arrogance, greed, etc. by big companies. Their mistake is this is going to piss off other big companies, not just employees. Oh and my company’s wellness program s__ks too. I assume they all do?


    • whynobodybelievesthenumbers says:

      Thanks. Not all programs “s__k.” Healthways is focused now on well-being, which is not like this at all. It’s doing wellness for employees instead of to them. US Preventive Medicine has gotten excellent results too. At some point I’ll do a posting on programs that work. Those two will be in it.


  2. Tom Emerick says:

    This is one of the goofiest things I’ve heard of lately. If I owned J&J stock, I’d sell it.


In the immortal words of the great philosopher Pat Benatar, hit me with your best shot.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: