Soda Tax Policy Memorandum
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. Consumers who drink excess sugary beverages impose a negative internality on their health; as well as imposing a negative externality on the American
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The levels of sugar contained beverage consumption is still high, and a public health cost hike is expected to treat obesity related illnesses. Costs for Medicare and Medicaid are expected to balloon to an estimated $550 billion 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 demand downward. Similarly, the sugary 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 these beverages decide to stop purchasing a taxed good, they will purchase substitute goods that have the same satisfactory effect at a price that isn't affected by the tax. This idea was presented by Jason Fletcher from the University of Wisconsin. In his published research, Fletcher found that BMI remained constant or increased even when consumers are confronted with a beverage tax (Fletcher, Frisvold & Tefft 2009).
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
With obesity rates increasing at an exponential rate, a tax on fat foods and specifically high sugar beverages of 20% or about 1 cent per ounce could reduce obesity rates by 3.5%, bringing the rate down to 30% among adults (Kalaidis). While 3.5% may not sound like a lot, if you take an approximate U.S. population of 350 million people, suddenly that mere 3.5% turns into over 12 million Americans who would no longer be considered obese. Marion Nestle, a well-respected expert in food policy, recently conducted a study investigating the impact of a junk food tax through predictive modeling. Her study revealed that 2,600 deaths, 9,500 heart attacks, and 240,000 new cases of diabetes could be prevented with a simple 1 cent per ounce tax on sugary beverages (Satran). A junk food tax of this kind could greatly increase the health of the American public as a whole by reducing death rates and healthcare
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.
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.
“Soda Taxes: Gaining Steam or Getting Steamrolled?” is an enticing article by Anna Gorman that focuses on the issue of taxing sugary beverages and the effect it will ultimately have on the health of the general population. She mentions that the tax could reduce the rates of obesity and diabetes in the affected areas. She also points out the counter to this claim, that soda taxes may not have any effect on obesity rates at all and may give the government too much power over the consumer choice. Overall, she seems to advocate that soda is an unhealthy beverage and should be cut down among consumers. Soda however, is not the only unhealthy options out there. There is a plethora of products on the shelves of supermarkets and sold at restaurants.
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,
Outline I. Introduction A. States around the nation are trying to put taxes on sodas. The main reason behind this tax is that it will reduce medical cost, obesity, diabetes, and the taxes will provide money for the states. B. Negative Externalities are the failures that happen because the producers do not take into account the costs that are impose on others. The producers do not pay for these costs and they produce more of that product because they avoid these costs. II.
If done right the political side would be able to use this accurately, however it is not done right. The tax shouldn't be enforced because of the way obesity isn't drastically improved upon from these taxes. The people who don't want to pay high prices have alternatives available to them, so the taxes stopping obesity proves useless. The alternatives are going to be more tempting when consumers see the prices of the taxed drinks and still be consuming drinks that may not be healthy. This, on top of the political eye of the situation, are reasons that the tax can't be helpful to stop obesity; one of the main claims to stop the taxes being to stop obesity. Further support of this being that author Brian Gale points in his article, "What the Soda Tax Means for Consumers" that even with the drink's taxes reducing how much is being consumed, it is uncertain if it's changing the consumers' choices of unhealthy drinking choices. It is undeniable that gauging every singe persons drinking and health choices will prove difficult based solely on the taxing of sugary beverages, especially with the idea of multiple variables having an influence on the drinking habits of every
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
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.
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
This policy was introduced in March 2016, George Osbourne announced a sugar levy on soft drink companies to start in 2018. Under this policy, companies will be taxed on sales of medium and high sugar drinks ( excluding fruit juice and milk based). Public health experts from the Chief medical to the British Heart Foundation agree that sugar sweetened soft drinks are a major source of sugar for Children and teenagers. ( include reference saved on computer). This levy is expected to have a positive impact on health of individuals in the UK. Excess sugar consumption is associated with obesity and excess weight which increases the likelihood of individuals developing a wide range of serious health problems such as type 2 diabetes, heart disease
A host of states have levied taxes on sugary drinks, as did the city of Berkeley, Calif., in a recent move. Soft-drink companies have battled hard against these measures, saying their products are being singled out unfairly. Other critics have argued that taxes don’t help to reduce consumption, and that they feed bureaucracies that waste money instead of helping the
Economic costs of obesity are increasing and will continue to do so if nothing is done. Healthy Communities for A Healthy Future state that the estimated annual health care costs related to obesity are 190 billion dollars. This is 21% of total health care costs. This includes direct costs, such as preventive and treatment services, while indirect costs include income lost to days debilitated or future income lost to death. On an individual level, an obese person will cost 42% more in health care than a person of healthy weight. A tax directly related to products known to cause obesity would offset the cost of health care, and hopefully result in less obesity in the Nation.
Firstly, taxes on sodas would decrease the consumption of soda. With the increasing the price by collecting larger tax on carbonated beverage, people would think twice before buying a soft drink. These taxes would save the cost for customers. According a survey of Powell et at., suggested that a 20% increase in price would reduce consumption by 25%. Consequently, the consumption of soda would lower. Therefore, it would break the link between the consumption of soft drink and obesity. It also encourages the consumption of healthier beverages, such as water, vegetable drinks. If people consume fewer sodas, in particular, they would have better health as well as lower obesity rate. As a result, these taxes would decrease the obesity rate in our country.
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