many diet-related diseases whose incidence would be reduced by a tax on poor qualityfood.Our study also examined the impact of a dietary fat tax across income groups. Weassumed that savings on health care expenditures and government revenue associatedwith the tax would be used to finance government services that benefit all Canadiansmore-or-less equally. Under that scenario, we found that high income households benefitmost from the tax on fat but that all households – with the exception of the poorest twopercent – are net beneficiaries. The net loss to the very poorest households is a seriousconcern and measures would need to be taken to mitigate that effect. However, suchmeasures could be financed easily out of the tax revenue raised.Overall, the results from our study provide strong support for a tax on poor quality foods.There are of course some administrative costs associated with the implementation of sucha tax but the benefits of the tax will almost surely outweigh those costs by many orders ofmagnitude. On balance, the province is moving in the right direction in contemplating atax on junk food.Peter W. Kennedy is an Associate professor in the Department of Economics at theUniversity of Victoria. The fat-tax study can be accessed athttp://web.uvic.ca/~pkennedy/Research/dietary-incentives.pdf
This is the end of the preview.
access the rest of the document.