tag:blogger.com,1999:blog-20142791.post3996217475634039230..comments2024-03-11T07:41:19.149-04:00Comments on The Perfect Substitute: Questions: On Food Taxes to Fight Obesity?Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-20142791.post-7051991857305946452010-03-17T10:37:58.946-04:002010-03-17T10:37:58.946-04:00I am very skeptical of the "fat tax" for...I am very skeptical of the "fat tax" for several positive (objective) reasons. <br /><br />First, obesity is hardly a real (technological) externality. It is more likely a pecuniary externality, meaning the obese drive up the cost of health care and other services just like the SUV drivers drive up the cost of gasoline. That's simple demand and supply. <br /><br />However, if health care is delivered with very strong moral hazard tendencies, then the obese may not bear the full burden of their decisions and will create technological externalities.<br />Even if the above argument is true, it is not clear that taxing sodas or certain other types of fatty foods will prevent people from finding "fatter" alternatives. In fact, people might end up eating things that are even worse for your health, resulting in a myriad of other concerns.<br /><br />In summary, I think that the obese people bear most of the cost of their actions. Furthermore, knowing how badly the government implements taxes, I suspect there will be some serious unintended consequences if a "fat tax" actually makes it through.Pavel Yakovlevnoreply@blogger.com