Sunday, November 28, 2010
Would A Soda Tax Be A Big Deal?
This article discusses the possibility of a soda tax. The idea for this begins with the governments both local and state that have been left desperate for money after the recession. The arguments for the tax show that beyond increasing the money supply of the government the tax would also help fight obesity in the United States. The drink industry argues that simply raising the price of sugary drinks would not be enough alone to combat the obesity problem in the United states. Several studies were done showing the price elasticity of demand for the sugary drinks. The final consensus was that a 20% increase in the price of the drink would cause a 10% decrease in the demand.
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This might not help the budget deficit significantly but this is a good start. In fact, instead of just aiming towards sodas, the government should place a tax on all unhealthy foods such as chips, fast food etc.
ReplyDeleteThis will help the budget deficit a little bit, but this is not a very good idea. If the government really wants to control the obesity problem, there are other ways of doing it. For example, most healthy drinks are quite significant than unhealthy drinks. Also, since the fast food prices are so low, many people will go that route. So this shows that the government is only interested in making a quick buck.
ReplyDeleteI think the soda tax is a good idea. Of course the soda tax alone won't have a big impact on obesity, but if people don't care about paying a little more soda (as the low price elasticity of demand suggests) then at least the government would be able to reduce the deficit and the few people who don't want to pay the tax could consume healthy alternatives instead.
ReplyDeleteI understand why the soda tax is a good idea but we shouldn't tell people what to consume and what not since they have the freedom to do whatever they want to their own bodies. Just as long as they don't affect other individuals. However, it is hard to find healthy drinks since they are likely to be more expensive than a soda. But the main point is it is a good idea to combat obesity. Every little step counts.
ReplyDeleteI can imagine this would benefit the health industry if you think about it, as well as the consumers itself.