Question #6: When Spoons are Not Spoons in the Kitchen

In an effort to reduce the incidence of obesity in America, some municipalities have attempted to place taxes on unhealthy foods and others have attempted to place subsidies on healthy foods. The empirical evidence on how successful these programs have been at reducing obesity has been weak at best.

Think about why these kinds of taxes and subsidies might not work. Explain a mechanism for why a sales tax on all food, including healthy foods, is more likely to produce the desired obesity reductions and produce less dead weight loss in the process than a program that specifically targets types of foods.