Question: Denmark recently instituted a fat tax which charges about
Denmark recently instituted a “ fat tax,” which charges about $ 3 per kilogram of saturated fat in food. One commentator criticized the tax as inefficient, because it taxes an input to health rather than a health outcome [ Sexton, 2011]. Assess this criticism. Your answer should consider both how the tax might lead people to substitute into other non- healthy foods, and the fact that some people exercise to stay healthy or are genetically inclined to be healthy despite their diet.
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