Taxes, in general, tend not to alter behavior. That goes for sin taxes as well as income taxes or corporate taxes or financial taxes. There is little proof that companies or individuals would try to earn less or would spend less if taxes were raised. Job creators are likely to continue to create more jobs as long as it creates more wealth for themselves. Paying an extra 2% won’t change that. Yes, at the extreme, higher taxes slow the economy, but not at the rate hikes we are talking about. Salmon says fat taxes are generally hated by both Democrats and Republicans, and there is a reason. Poor people generally eat fattier foods than rich people, who can afford to shop at Whole Foods and eat organic. Raise the tax on fatty foods, and you are only making the people who are most likely to need health care less able to afford it. And as a result, fat taxes can further increase the wealth gap in the country. You could plow the money back into programs that help to relieve poverty or make healthy foods more available in poor neighborhoods, and that could lower inequality, but in a roundabout way. The nice thing about a small income tax increase is that it could directly improve the wealth gap, and the same time probably do little damage to the economy.
Should we have a "fat tax"?
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