From The Economist print edition, July 30, 2009, titled Waist Banned was an article regarding taxation on junk food. The article was called, “Does a tax on junk food make sense?” This article argues the idea of imposing special taxes on goods and services that are considered to be “junk food’ or unhealthy food choices. The article explains that such a tax is also known as “Pigouvian” after Arthur Pigou, a 20th-century English economist. Environmental taxes are an obvious example of Pigouvian; but there is also a Pigouvian case for duties on cigarettes, alcohol and gambling at which all three have an adverse cause and effect to the consumer. Also, all three habits lead to higher medical costs. So basically, taxes levied to compensate society for some sort of negative behaviour are called Pigouvian taxesError! Reference source not found..The idea behind these types of taxes is to reduce consumer consumption, which in long would lower medical costs and encourage consumers to live healthier lives.
Congress is considering a tax on sugary food and beverages to help pay for the planned expansion of health-care coverage. Some analysts would like to see broader duties on junk food. On July 27th the Urban Institute, a think-tank in Washington, DC, proposed a 10% tax on “fattening food of little nutritional value” that, it claimed, would raise $500 billion over ten yearsError! Reference source not found..
The reason for this tax on fattening food is because about one-third of Americans are obese which rose from 15% in 1980 which result in higher medical costs due to obese people suffer from more medical issues and half of America’s obesity-related health costs land on