This paper offers a modern comprehensive review of the impact of the Pigouvin taxes introduction on American society. Taxes levied on goods and services whose prices do not reflect the true cost of their consumption are known as Pigouvin. For instance, the environmental taxes are some of the obvious examples; these include cigarettes, gambling as well as alcohol.
Some economists are against the idea of junk food being the main cause of obesity. For example, they strongly believe that fat tax on junk food may not affect the behavior of people. Fast food has on the other hand become relatively cheaper hence people can afford buying them and as a result, most people who consume this kind of food tend to be fat and fatter. Conversely, there are some people who can eat junk food but with no seeming effect compared to those who can eat healthy but still be a bigger build. Therefore, many people eat junk food on a regular basis but are quite healthy because they keep a good, active lifestyle.
The idea of handling the issue of obesity through the tax system has on the other hand had some serious flaws. For instance, the big question is how much should be taxed from these foods And secondly, when tax is imposed, what will be the reaction of low-income earners.. If the Government of United States imposes a tax on food that is junk, then healthy foods will indicate a warning signal of lack. The government is still worried whether imposing the tax on junk food will affect the behavior of people .