Researchers working at World Health Organization (WHO) have published a report where it advises countries to impose a minimum of 20 percent hike on present taxes imposed on sugary beverages. Pro-tax individuals cite a number of health outcomes of such a step. They believe that there will be less health outcomes like tooth decay, obesity and type 2 diabetes. The problem is that such a contention can be grossly wrong.
Sin taxes are bad
The problem is that “sin” taxes do much more harm than good. They are regarded by lawmakers as a kind of low hanging fruit when it comes to generating revenues. The latter considers it as a good chance to increase revenue and at the same time pushing a cause for public health. The problem is that taxes imposed on sodas actually make no sense.
The bitter truth of the soda tax is that they are inherently regressive. They harm people having lower incomes. The fact is that not only poor people spend more on taxes as a part of their income percentage; they pay much more in actual dollars too. This was conclusively proved by Tax Foundation in their landmark 2012 report where the notes said that a soda tax of 10 percent burdens families enjoying high income by $24.29, while poor families would be pay $47.38, an amount twice what the rich pays.
Not much healthy
Another question also arises from the increase in soda tax: whether this burden on the taxpayer actually makes them healthier. People who support such taxes point out that consumption of soda is lowered. This is expected as people will be less likely to pay for more expensive goods. However, it is not quickly obvious that people may not buy sugary drinks, but they do buy other high calorie drinks in lieu of soda. Many people have switched to milk, thus consuming eight extra calories every day. This actually worsens the health.
If the aim is to just reduce the consumption of soda-and not mind the substitution drinks or food- then raising taxes would be successful. However, the reality is that public health outcomes will not be nice. Research has revealed that even with a 58 percent soda tax imposition, the outcome of such a step will decrease the US Body Mass Index or BMI by a negligible 0.16 points. This comes to below a pound. It will not help to alleviate the obesity epidemic.