- A fat tax is a tax or surcharge that is placed upon fattening food, beverages or on overweight individuals.
- An example of a fat tax is Pigovian taxation, a fat tax that aims to discourage unhealthy diets and offset the economic costs of obesity.
- A fat tax aims to decrease the consumption of foods that are linked to obesity. A related idea is to tax foods that are linked to increased risk of coronary heart disease. Numerous studies suggest that as the price of a food decreases, individuals get fatter.
- To implement a fat tax, it is necessary to specify which food and beverage products will be targeted. This must be done with care, because a carelessly chosen food tax can have surprising and perverse effects. For instance, consumption patterns suggest that taxing saturated fat would induce consumers to increase their salt intake, thereby putting themselves at greater risk for cardiovascular death.
- Since the poor spend a greater proportion of their income on food, a fat tax might be regressive.
- Kerala is the first state in India to introduce a “fat tax” on burgers, pizzas, doughnuts and tacos served in branded restaurants.