Question

Do you remember the short-lived soda tax? There were a few positive reasons to have such tax. Should we bring this tax back? What are the strategies that the county needs to apply to make a successful re-launch of such tax? Should we tax other sugary items to justify the soda tax? What would be the economic consequences in the Cook County, a high taxed place with a decreasing population? If you think not, how should we deal with the issues of obesity in the minority communities?

Based on your understanding of Chapter: Design of the Tax System and some research on your part, discuss the above questions.

In your discussion, you must include at least three economic terms or concepts from Chapter.

Your response must be at least 150 words

Answer 1

The soda tax yielded a number of significant results in terms of an increase in cross shopping, an overall consumption decrease in minority areas and the cost of the tax being mostly passed on to consumers. After looking at all the results, the soda tax has merit as a policy instrument but there exist more effective policy measures which can be implemented in it's place which dont disproportionately affect minority consumers.

If the county needs to relaunch the tax , it could set a calorie threshhold that drinks need to meet before the tax applies to them hence indirectly promoting the consumption of low calorie sodas.

A sugar and calorie based tax would in theory be more effective in promoting healthy consumption if the tax revenue from this could be used to invest in policy measures such as subsidies to grocery stores in food deserts and lower taxes on healthier items.

A better solution to dealing with the issue of obesity would be to subsidize grocery stores and health food stores in minority areas thus increasing access to healthier alternatives at an affordable cost.