In October 2011, Denmark introduced a ‘fat tax’—a tax on all foods with a satura

Question

In October 2011, Denmark introduced a ‘fat tax’—a tax on all foods with a saturated fat content above 2.3 per cent. It was the first country in the world to do so. By the end of 2012, the tax was abolished, deemed a failure. Explain the externality issues that the fat tax was aiming to address. What advice could you have given the Danish government before it introduced the tax, to inform the government how consumers might respond to the tax and why the tax might not be as successful as they had hoped?

Explanation / Answer

The externality issue that the at tax was aiming to address was that the companies being penalisied used to pay the money but not use to implement the non adulteration in the food items. It was not affecting very well to the adulterated foos product. The Danish government before implementing the laws must create tough laws and order for the companies paying fat-tax that the food item is free from maximum saturated fat content. There must be food check by food inspectors and ban on those products which donot follow rules. There must be ban on those products which repeatedly pays fat tax to the government. It should be done so that elimination of adulteration may take place sooner.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.