Question

Refer to the article: "Soda stream: How to tax sugary drinks." The Economist, May 23rd, 2019 Which of the following is NOT a reason why a tax on sugar drink is desirable?

A. Poorer people spend a bigger share of their income on soft drinks, therefore, the sugar tax is regressive, that means taking a proportionally greater amount from those on lower incomes.

B. Demand for sugar drink is elastic enough that a tax will help reduce sugar consumption and then is socially beneficial.

C. Sugar tax helps reduce the consumption of sugar drinks, improving poorer people's health, avoiding consequences of sugary indulgence.

D. Such tax revenues compensate for the government spending on health services to deal with higher rates of obesity, diabetes and heart disease

Answer 1

Ans.

We have referred to the article- Soda stream: How to tax sugary drinks. The Economist, May 23rd, 2019 Which of the following is NOT a reason why a tax on sugar drink is desirable?

As per the article people who are support of the tax they support following :

C. Sugar tax helps reduce the consumption of sugar drinks, improving poorer people's health, avoiding consequences of sugary indulgence.

D. Such tax revenues compensate for the government spending on health services to deal with higher rates of obesity, diabetes and heart disease

B. Demand for sugar drink is elastic enough that a tax will help reduce sugar consumption and then is socially beneficial.

People whoa re against the tax argue on the following lines :

A. Poorer people spend a bigger share of their income on soft drinks, therefore, the sugar tax is regressive, that means taking a proportionally greater amount from those on lower incomes

Therefore correct answer is option A.

And opponents of tax counter that such taxes are a fun-spoilers, souring individuals' pleasure, and regressive in nature, in light of the fact that less fortunate individuals spend a greater portion of their wages on soft drinks.