DiLab-Ziba

Make the Effort!

Chilean congresist proposes to raise taxes on Junk Food

Leave a comment

Nowadays Chilean parliament lives an intense debate on a revolutionary fiscal reform, which will take in an additional 3% of the chilean GDP and that will be used to reform the education system and many other government project. On Monday, 2 deputies gave to the Chilean minister of finance a project to be included in the fiscal reform bill, which includes a raise on taxes applied to food with high levels of sugar, salt and fat up to 30%. This number obeys the recommendation of the WHO and other countries with high obesity levels have implemented it already.

 

Accordingly with the consumer theory, a person who is willing to buy a good will do it until the price of the offer is equal the value he gets from the product, so in theory the raise of the price of the kind of product with high sugar and salt will help to reduce the consumption of them. But salty and sweet food causes addiction above everything in children so the elasticity (that is the additional percentage a person will pay for the same product) is very low (inelastic).

 

A raise in products with high inelasticity as cigars and alcohol drinks has never show a significant reduction of the consumption of these products in the long term. So I believe this is more a demagogic action instead a real public health solution. There are many other public policies government should try to implement before as subsidize the offer of healthy food.

C.

Read News (in Spanish)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s