Sugar Taxes Could be More Efficient
December 8, 2014 Taxation in USA
WASHINGTON D.C. – Sugar taxes should be paid by manufacturers of soft-drinks, not by consumers purchasing them.
Taxes on soft-drinks are not the most effective way to curb the amount of healthy beverages being purchased by consumers, according to the results of new research detailed by the Iowa State University early last week.
According to researchers at the university, John Beghin and Helen Jensen, levying a tax on sugary soft-drinks will force consumers to seek comparable alternative, often turning to untaxed alternatives such as diet soft drinks, sweetened waters and energy drinks.
However, many of the alternatives to the taxed soft drinks may be just as unhealthy and sugar-filled as regular beverages, resulting in no positive improvements in consumers’ diets.
The researchers suggested that instead of taxing the end-product, the burden of taxation should be shifted to the production process, with sugar levies being applied at the production stage.
It was acknowledged that shifting the burden of taxation to the producer will still result in a price hike to consumers, but the impact will be lower than direct taxes, and manufacturers would a direct pressure to find healthier alternatives for their current ingredients.
It was also noted that lawmakers currently place a heavy emphasis on taxing sugar-filled drinks, but similar attention should also be paid to the taxation of other sweetened products, such as candy.
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