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The “Waist Banned” Article – Taxes on Junk Food Essay (Critical Writing)

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Updated: May 28th, 2020

The article, “Waist Banned”, analyzes the social, economic and health effects relating to the proposed introduction of taxes on junk foods. The article describes the imposition of taxes on junk food as an undertaking that would help to minimize the current concerns on lifestyle diseases. As a deterrent measure, high taxes would compromise the spending of junk food addicts forcing them to withdraw from the unhealthy lifestyle. On the other hand, the article describes the possibility of a failure in the projected effects of taxation on junk foods because of the likelihood of junk food addicts to forego expenditures of important foods such as vegetables and fruits to feed their habit.

The author uses the analogy of cigarette and alcohol addicts whose habits remain largely unchanged despite the observable continuous increase in taxes on the two substances to highlight the possibility of a failure in the regulation of junk food. The article highlights the importance of a reasonable approach in the implementation of taxes on junk food to ensure that the effects on an individual’s income are minimal. The author proposes the adoption of measures that would identify high-calorie foods, which lack elements such as proteins and vitamins, as the main targets of taxation.

An analysis of the author’s views on the effects of taxation on junk foods highlights the lack of a comprehensive evaluation of changes in consumers’ preferences, which largely depend on the price of goods and individuals’ income. The utility theory describes the fact that consumers must reach a rational decision on their spending and sustain their order of preference based on the marginal utility of a good or service. Taxation on junk foods will increase their prices and force consumers to reevaluate their dietary habits based on the value derived from various foods.

An analysis of the concept of income and substitution effects shows that low prices on vegetables and fruits will encourage a high number of households to adjust their food preferences in accordance with the family income and start to view junk foods as a luxury. The perception of vegetables, fruits and other healthy foods as alternatives to junk food will significantly lower the demand for fatty foods because of their detrimental effects on individuals’ income. The author’s argument that taxation has not discouraged the consumption of alcohol are unsubstantial and contradict the fact that high alcohol prices discourage consumption but increases the intake of illicit drinks as substitutes to the taxed alcohol. The concepts of the indifference theory are subject to the laws of price and demand whose equilibrium determines the consumer’s preference.

Unless the prices of junk food remain affordable to a consumer, the pursuance of an equal amount of satisfaction becomes less enticing. Although junk food may provide a special form of satisfaction that consumers cannot access from healthy foods, their rationality on expenditure decisions will demand lower preferences for junk food. Households spend a significant amount of their income on healthcare and are likely to accept the long-term effects of taxation on junk food as evident by the Two-Period Consumption Model. The model highlights the need for consumers to maintain a balance between the current and future expenditures because it determines whether they will carryover wealth or debts. Considering consumers’ income and wealth as fixed numbers at the present, consumers who wish to accumulate wealth must ensure that their expenses do not supersede their income.

Consumers must choose the current and future consumptions in a manner that limits the likelihood of carrying over debts, or they have to adjust various aspects of supply and demand for labor to favor their income levels. Although the demand for labor is dependent on a myriad of market forces outside the consumer’s influence, employment has a direct influence on consumption and purchase decisions. Rational decision-making demands that consumers who intend to accumulate wealth must maintain a balance between consumption, saving and economic factors. A consumer would prefer to forego highly priced goods rather than seek for alternative ways to increase his income and sustain the normal level of satisfaction because consistency in consumption depends on the consumer’s choice and substitutability of goods.

The detrimental effects of taxation on addictive goods arise due to the tendency to seek alternative means of feeding an addiction, which encourages people to embrace illegal and unorthodox sources of the addictive good. Implementation of laws to ensure that taxation of junk food does lead to the mushrooming of illegal businesses that seek to exploit the demand for junk food will ensure the realization of improved national health. Collaboration between the government and other stakeholders would ensure that vices such as muggings, robbery and prostitution do not emerge because of the pursuance of alternative means to maintain the satisfaction derived from junk food. Value Added Tax (VAT) on junk food eliminates the need for discriminative tax policies as proposed by the author and gives the consumer great freedom in planning his expenditures and saving. The price of any commodity always determines its demand and supply and must vary to maintain equilibrium for all market forces.

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IvyPanda. 2020. "The "Waist Banned" Article - Taxes on Junk Food." May 28, 2020. https://ivypanda.com/essays/the-waist-banned-article-taxes-on-junk-food/.

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IvyPanda. (2020) 'The "Waist Banned" Article - Taxes on Junk Food'. 28 May.

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