tax news in plain english

What is the Mexico Obesity Tax?

The Wall Street Journal headlines indicate that Mexico will be taxing obesity.  Actually, it is a proposed tax on high calorie foods, similar to the Mayor Bloomberg effort to curb sales of large sugary drinks in NYC.

“The Finance Committee of Mexico’s lower house passed the proposed measure to charge a 5% tax on packaged food that contains 275 calories or more per 100 grams, saying that such high-calorie items typically contain large amounts of salt and sugar and few essential nutrients” (WSJ – 10/18/13).

Mexico has one of the highest percentage of obesity and diabetes.

This is an interesting example of using taxes as disincentive for unwanted behavior, similar to taxes on cigarettes and booze.