One authority estimates that obesity contributes to the deaths of 100,000 Americans annually. A strategy for reducing the health risks of obesity is to impose a tax on high calorie junk foods such as soda, donuts, and potato chips. Maine, for example, imposed a 5.5 percent snack tax as a means of closing a budget gap, but that state’s adult obesity rate doubled during the 10 years the tax was in place. Two-thirds of the states already impose a tax (averaging 5.2 percent) on soft drinks, but for a 5-foot-10, 279-pound person, the average weight loss associated with the tax has been about 3 ounces.
a. What objections would you raise to increased taxes on junk food.
b. Would you support a significant tax, say, 25 percent, on junk food? Explain.
c. Would subsidies to lower the price of healthy food be a more effective strategy than taxes on unhealthy food? Explain.