Soda Tax Policy Memorandum
This policy memo will address why the policy maker should impose a sugar beverage excise tax on the American Beverage Association's member corporations. More than 35% of American adults are obese and as a consequence, are at increased risks for health issues such as heart disease, high blood pressure, and diabetes ("Overweight & Obesity"). The U.S. taxpayer is supplementing much of the cost to treat obesity related health issues through public health programs such as Medicare and Medicaid ("Economic Costs"). A positive externality will occur in the form of decreased health care expenditures on Medicare and Medicaid. The U.S. Government should impose an excise tax on soda and other beverages that contain sugar.
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Costs for Medicare and Medicaid are expected to total to an estimated $550 billion dollars in upcoming decades ("Obesity and Severe Obesity Forecasts Through 2030").
By imposing a sugar beverage tax, consumers will demand less of the good and drive the market downward. Similarly, sugar beverage market is elastic to price changes ("Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico"). If the prices of sugar beverages increase, the demand will decrease ("Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico."). However, a counterclaim does arise which argues that even if consumers of sugary beverages decide to stop purchasing from a taxed good; they will purchase substitute goods that have the same satisfaction effect at a price that isn't affected by the tax. This idea was presented by Jason Fletcher from the University of Wisconsin, in research he published, he found that BMI remained constant or even increased due to a sugar beverage tax (Fletcher, Frisvold & Tefft 2009).
While this argument holds merit, the study does acknowledge the weight loss contributing to a tax, even though they considered it a minuscule one (Fletcher, Frisvold & Tefft 2009). From the constituted fact that sugary beverages are elastic goods that do cause consumers to react to price changes. According to research conducted by
Sugar addiction is a problem that has been in our society for many years. In today's world this type of addiction is being composed into drinks. Sugary drinks are found everywhere from local stores, to in home refrigerators. Sodas, juices, and energy drinks, all fall under unhealthy remedies to thirst. Sugar addiction can only restrain us from accomplishing healthy goals in life. Sugary drinks can lead to harming one's body. Over the past few years, many cities and states have considered taxing sodas and other sugary beverages. Sugary drinks must be tax due to its unhealthy components and addiction.
The debate on weather sugary drinks, especially soda, should be taxed or not has been a topic for years. Some people believe that they should be taxed for the improvement of health while on the other hand some people think that taxing the drinks won't do much and actually hurt people. Taxing sugary drinks is helpful to those who have a hard time with temptation for the drinks. In the article "Do Soda Taxes Really Work?" Sifferlin states that when researchers looked at Berkeley residents, they found that when taxing soda started "sales of sugary-sweetened drinks fell by close 10% and sales of water increased in Berkeley by about 16%" (4) Just by the percent difference rasing prices on soda made people decide against buying the sweet drinks,
In addition, taxing sugary drinks will help collect more revenue for health promotion and economy deficit..
While Fletcher's argument holds merit, the study does acknowledge the weight loss contributing to a tax, even though they considered it a minuscule one (Fletcher, Frisvold & Tefft 2009). The fact is that sugary beverages are elastic goods that do
Did you know that of 39,000 people surveyed that drink sugary drinks 26% of those people are also obese. Also a full 42% of the annual $142 billion in health care costs attributable to obesity. One pro of taxing sugary drinks is it will raise money. Another pro would be deterring customers from buying so many sugary drinks and maybe instead buy something healthy. Some people say that taxing sugary drinks would only make customers buy sugary drinks different places so the tax is lower. Although people would buy them other places to get a lower price it would still raise money. These are reasons why sugary drinks should be taxed.
If you take one look at an average adults daily sugar consumption that is encouraged by these companies, you will soon be raising your eyebrows too. 14.6 kilograms…. That’s how much sugar the average Australian soft drink lover is consuming every year from soft drinks alone, this is equivalent to indulging in three bags of potatoes, instead filled with pure sugar. This huge amount of sugar intake is leading to high rates of overweight and obesity which intern lead to type two diabetes, heart disease and cancers. But there’s a simple way to reduce sugary drink consumption and that’s by increasing the price through a 20 percent tax on sugar drinks. This would decrease the consumption of sugary drinks and also reduce the rates of overweight and obesity, therefor reducing the amount of Australians with type 2 diabetes, heart disease and
Considering that soft drink are one of the most popular drinks to a lot of people all around the world, unfortunately, a lot of them love to drink it almost every day and may not live without it. Soda becomes addictive, preventing one from drinking what the body needs the most which is water. In the market, there is an infinite amount of choices with multiple varieties of flavors, different tastes, and ranges from classic soda to diet soda. However, consumers do not recognize clearly the negative effect of soft drinks that have a high chance of eroding their health away. Some of these examples include dental erosion, energy intake, obesity and other health issues. In order to combat these negative effects, taxes
In America’s present economic state, citizens are looking for one thing: convenience. The American lifestyle has evolved into a quick pace, overwhelming schedule with Americans looking to fulfill their needs through affordable and easily reachable means. There has been an increased approval in fast food and convenience store establishments that provide swift and stimulating products. It is the inexpensive and easy way to purchase these “goods” that is slowly deterring the well-being of our country. The reason behind the low prices of such unhealthy choices provided by fast food restaurants and convenience stores is attributed to the subsidizing of producers of companies making the junk food. These companies such as McDonald’s, Coke, Pepsi, and Burger King contribute to the amplified rates of diabetes and obesity. Therefore a sensible solution is to tax the companies’ goods to make them less attractive to consumers who sequentially will lead improved life in buying less expensive, healthier foods.
They argue that this tax would be ineffective in reducing obesity given that SSBs make up a small amount of calories in a Canadian’s diet (7). From my experience working as a Dietitian, I have noticed that education and promotion of healthy diets cannot solely address the issue that obesity poses on our nation. We need policies in place that guide Canadians to choose healthier foods. After Mexico implemented a SSB tax there was a 7.3% decrease in SSBs sales and a 5.2% increase in plain water sales (8). Furthermore, a review of studies suggests that a SSB tax and decreased SSB consumption can actually lead to moderate weight loss (9). This evidence gives hope to health advocates across Canada in the future battle against
This is a transcript that addresses the problem with Mexican government trying to impose tax on sugary drinks. According to the article, one of the major argument against taxing sugary drinks is that tax will have hardly any effect on slowing weight gain. The purpose of the Mexican tax was to bring down sales and reverse the obesity rate but evidence have shown that it did not have any effect on health. This article states how the Mexican taxing bring more revenue leaving the poor with a regressive tax
Sugar in drinks and food contributes to many diseases such hypertension, tooth decay, diabetes, and obesity. By increasing taxes on sugary products, will in return reduce the consumption rate by people. This
With a growing epidemic of obesity in America, some states and lawmakers have resorted to taking unconventional measures in order to counter the growing issue. Many legislators are debating the effectiveness of a “fat tax” would be on limiting the consumption of soda, high fat foods, and high sugar foods, and ultimately reducing the rate of morbidity and mortality due to obesity. The idea is that long term consumption of high fat, high sugar foods and drinks lead to many health problems, so making them more expensive and less accessible should decrease the health issues related to their consumption.
Obesity and diabetes are diseases affected by poor diet. These health problems, caused by overdrinking sugary drinks are increasing the health care cost paid. Public funds are used to pay these cost through Medicare and Medicaid. Some people insist that these drinks should carry a higher tax to keep people from consuming and also to help cover medical cost. But these companies have battled hard against this , saying their products are being singled out unfairly.Some people argue that taxing sugary drinks won’t decrease the rate of obesity and even change the consumer behavior. However, studies have shown that increasing the price for sugary drinks have actually reduce purchase and also drop the rates of diabetes and obesity.
As a reference by the Journal of Health policy 2008 Revenues (Chriqui, 2007) could be generated as a result of this tax. The results of their study were” One study estimated that a one cent national tax on an 12-ounce soft drink could generate an estimated $1.5 billion annually (Jacobson MF) that could be dedicated to obesity prevention and reduction efforts.’ These programs can support and educate
Considering that soft drinks are one of the most popular drinks to a lot of people all around the world, unfortunately, a lot of them love to drink it almost every day and may not live without it. Soda becomes addictive, preventing one from drinking what the body needs the most which is water. In the market, there is a infinite amount of choices with multiple varieties of flavors, different tastes, ranges from classic soda to diet soda. However, consumers do not recognize clearly the negative effect of soft drinks that have a high chance of eroding their health away. Some of these examples include dental erosion, energy intake, obesity and other health issues. Nowadays, people live a healthy life to avoid health problems, so taxes on soft