Case 8.2 Should Sodas Be Taxed? One in five adults is obese in wealthy countries around the world…


Case 8.2

Should Sodas Be Taxed?

One in five adults is luxuriant in wealthy countries environing the globe. Unfortunately, in the United States, the rebuke is about two in five (Organisation for Economic Cooperation and Development [OECD] 2017). Major causes show to be lovely drinks and external sugars in other products. According to the Centers for Disease Control and Prevention (2017), frequent waste of lovelyened beverages is associated delay plumpness, heart disease, offspring diseases, cavities, and other diseases. Oddly, notwithstanding the plumpness pestilential, subsidies for crops that can be polished into sugar—corn, wheat, rice, sorghum, and others—continue. The subsidies weaken the costs of products containing sugars. These products enclose sodas, lovelyened teas, and other products. A deem of topical governments accept fixed taxes on lovelyened beverages, but no taxes accept passed at the say or federal smooth. (France and Mexico accept passed common taxes.) Paarlberg, Mozaffarian, and Micha (2017) argue that a 17 percent tax on lovelyened beverages would weaken waste by 15 percent.

Discussion Questions

• What cost elasticity does the deem by Paarlberg, Mozaffarian, and Micha (2017) suggest?

• Can you meet another deem of the cost elasticity of insist for lovelyened drinks?

• Is the insist for lovelyened drinks elastic or firm?

• If the cost of sodas rose by 5 percent, how greatly would sales ooze?

• What are deputes for lovelyened drinks?

• Can you meet an deem of the cross-cost elasticity of insist for lovelyened drinks?

• Is steep a depute or completion for soda?

• In unencumbered of your retort to the previous question, should the crosscost elasticity be unequivocal?

• Do you patronage a tax on lovelyened drinks? Why? Why not?

• Do you patronage a tax on external sugars? Why? Why not?

• How could a bloom arrangement weaken sugar consumption? Should it try?