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The Poverty Effects of a “Fat-Tax” in Ireland

  • David (David Patrick) Madden

To combat growing levels of obesity, health related taxes have been suggested with taxes on foods high in fat or sugar. Such taxes have been criticised on the basis of their regressivity and potentially adverse impact upon poverty. This paper analyses the effect of such taxes on a range of poverty measures and also examines the effect of a revenue-neutral tax subsidy mix with a tax on unhealthy food combined with a subsidy on more healthy food. Using Irish expenditure data, the results indicate that taxes on high fat/sugar goods on their own will be regressive but that a tax-subsidy combination can be broadly neutral with respect to poverty.

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File URL: http://hdl.handle.net/10197/4268
File Function: First version, 2013
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Paper provided by School of Economics, University College Dublin in its series Working Papers with number 201303.

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Date of creation: Mar 2013
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Handle: RePEc:ucn:wpaper:201303
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  18. Yitzhaki, Shlomo & Thirsk, Wayne, 1990. "Welfare dominance and the design of excise taxation in the Cote d'ivoire," Journal of Development Economics, Elsevier, vol. 33(1), pages 1-18, July.
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