Junk Food tax?

The Economist has a good feature this week on taxing junk food. It is generating support in America, a country with rising obesity rates. Congress is considering a tax on sugary drinks to help pay for the planned expansion of health-care coverage. Some analysts would like to see broader duties on junk food. On July 27th the Urban Institute, a think-tank in Washington, DC, proposed a 10% tax on “fattening food of little nutritional value” that, it claimed, would raise $500 billion over ten years.

This is a very good article to use as an extension activity with students. It could be used to raise the question about whether junk food causes negative externalities or not?

The article can be read here