We already use taxes to decrease the consumption of alcohol and cigarettes, so why not fatty foods? This article discusses the use of direct and indirect taxes to fight the problem of obesity in the developed world. Indirect taxes are taxes on expenditure. These taxes increase the costs of production of a firm and therefore cause a shift of the supply curve to the left, as shown in the diagram below. There are two types of indirect taxation; specific, which is a fixed monetary value added to each unit of output. Ad valorem tax is a percentage added to each unit. The diagram above illustrates the affect of the indirect tax. The diagram shows the shift of the supply curve to the left, and is labelled as S+t. The vertical between S and S+t is the size of the tax. The diagram shows how the decrease in supply as led to a decrease on quantity demanded and an increase in price. The shaded areas illustrate the amount which is paid by the consumer and the producer. This increase in price will act as a disincentive to consume or produce fatty and unhealthy foods. T......

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