Food food high in fat and refined sugar is one

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food – food high in fat and refined sugar – is one mechanism by which those health care costs can be reflected back on the person making the dietary choice, thereby creating an incentive to make better choices. In this respect, a tax on junk food should be viewed as a preventative health care measure. An important issue with respect to any new tax is the question of how the tax will impact different income groups. There is good evidence to suggest that lower income households tend to consume poorer quality food on average than higher income households. Some of this difference may be explained by differences in education levels, which are highly correlated with income. However, an equally important factor appears to be that lower income households consume lower quality diets because poor quality food is – on average – cheaper than higher quality food on a per calorie basis. Foods high in fat and refined sugar are calorie-dense, and tend to provide more calories per dollar than high quality foods like fruits and vegetables. Does this mean that a tax on junk food will likely affect lower income households more than higher income ones? Almost surely. However, this does not mean that lower income households will necessarily be made worse-off overall. The overall impact of a policy to tax junk food will depend on how government
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