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Deciding on whether to collect tax is one of the most difficult questions in the US government. Some proponents of taxation believe that it can solve the problem of obesity. However, heavy taxation can undermine the US economy as well as contribute to significant social problems.
On the one hand, sugary drinks lead to severe health problems. For instance, they can significantly contribute to obesity. The percentage of the US population that is deemed obese today is higher than it was 22 years ago (Arnold 101). This illness is usually caused by overconsumption of calories. According to Daines, we consume about 300 calories more a day now than we did 30 years ago, and most of those extra calories come from sugar-sweetened sodas, energy drinks or fruit-flavored drinks.
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Therefore, increased taxes on sugary drinks can possibly resolve obesity issue. The problem of obesity is widely discussed by American politicians. Policy makers try to raise tax revenue that can contribute to solution of social problems such as obesity. That is why the Washington Council is seriously considering a penny-per-ounce tax on energy drinks, non diet sodas, and artificial juices (Leonhardt).
On the other hand, there is no guarantee that this taxation policy will have a positive impact on the issue of obesity. Even some adherents of taxation on beverages state that it is not clear if it would produce a direct effect on the waistlines of American people (Neuman). In fact, people who are addicted to sugary drinks are ready to spend more money in order to purchase them. In addition, as a time goes by, they will get used to the new price. It is important to remember that they are guided by their personal food preferences rather than governmental directives. The chief executive of Coca-Cola Company, Mr. Kent, said I have never seen it work where a government tells people what to eat and what to drink (Neuman).
Society is making some efforts to resolve obesity problem. Different civil organizations as well as individuals are collectively fighting against obesity. For instance, the American Heart Association induced people to lower intake of sugary beverages and foods to reduce the risk of such diseases as hypertension and obesity, stating that soft drinks are major factors that contribute to their development (Neuman). In addition, some other important programs prevent obesity and fund its treatment.
Many of these programs are created especially for children in order to educate young generation about proper diet. Many schools across the country have already removed soda vending machines stating that they should not be plying children with sweet drinks (Neuman). People are also conscious about obesity problem in adult population and invest many resources in its treatment. According to Daines, in New York, more than $7.6 billion is annually spent to cure illnesses related to obesity and the largest amount of money is paid by taxpayers through Medicare and Medicaid. Therefore, there may be no need to impose taxes on soda drinks in order to combat obesity.
It is also important to mention that some communities are actively engaging into action against taxation on soda drinks. Fr example, the citizens of Richmond opposed citys administration proposal on taxing businesses that sell soda and different sugary drinks. The community is aware of serious implications such laws can have on their social life. Hispanic and Black leaders state that the alliance whose most outstanding leaders are whites failed to reach out to them before moving ahead on a tax that would disproportionately influence consumers in their communities and small businesses (Onishi). When people are collectively raising concern about some law or proposal, local and federal governments should pay close attention to it. According to the core democracy values of the USA, government should represent interests of society, and thus do not accept laws that people oppose.
Different economists do not approve such incentives either. They suppose that soda drinks taxation can lead to reverse effect. Thus, economists support taxing consumption rather than income since consumption taxes do less to discourage economic growth, saving, and investment (Mankiw). Furthermore, the price for sugary drinks can also significantly increase. For example, John Sicher, the publisher of Beverage Digest, a trade publication, said that a two-liter bottle of soda sells for about $1.35. At 67.6 ounces, if the full tax was passed on to consumers that would add 50 percent to the price (Neuman).
As a result, soft drinks manufacturers can lose majority of their customers. Experts also determined the possible effects of such policies. Thus, Mr. Sicher concluded A one cent per ounce tax would create serious problems and potentially adversely impact sales for the American beverage industry (Neuman). At the same time, some economists believe that there are some psychological factors that urge a person to purchase sugary drinks even if they are more expensive. As an example, many people consider spending as a type of instant gratification while saving implies sacrifice in the present for a reward in the distant future (Mankiw 484). Thus, taxation may not prevent some people from purchasing soda drinks.
Taxation can also negatively influence manufactures that produce soft drinks. Nowadays, soft drinks bring significant revenues to the companies. In fact, some kinds of milk are even more expensive than soda beverages. Grocery stores in poorer neighborhoods stock more soda and less milk, and the ruthless advertising from the fast food joints and beverage industry makes sugary drinks an integral part of daily life (Daines). Therefore, manufacturers are quite unhappy with possibility of soda drinks taxation. Major companies have already raised concerns about this policy. For instance, the chief executive of Coca-Cola Company considers the idea outrageous while skeptics indicate political obstacles and question the impact it would really produce on consumers (Neuman).
Manufacturers also advocate that raised taxation can cause many social problems. For example, if the soda drinks industry significantly decreases, many people will have to look for other employment opportunities. The soft drink industry is actively fighting back with newspaper and radio advertisements which say that taxation would most hurt hard-working, low- and middle-income families, elderly residents and those living on fixed incomes and in its turn would lead to unemployment (Leonhardt). Therefore, instead of preventing the epidemic of obesity by this taxation policy, government can increase unemployment in the country.
It would also be useful to examine similar taxation programs. Government has already implemented taxation policy for smokers. There are many proponents of the same taxation on sugary drinks. For instance, a team of prominent doctors, scientists, and policy makers states that it could be a powerful instrument in order to decrease obesity similarly to how cigarette taxes have aided in curbing smoking (Neuman). However, there is a big difference between cigarettes and sugary drinks. While smoking can significantly harm passive smokers, sugary drinks do not have any negative effect on other people (Neuman).
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There are also other taxation programs such as gasoline taxes. Nevertheless, they can also be justified. Whenever a person goes out for a drive, he/she makes the roads more congested, increasing the commuting time of his/her neighbors (Mankiw). This act also has some other essential side effects on environment as well as public safety. For example, driving increases the probability that other drivers will end up in accidents; and the gasoline one burns adds to pollution, including the greenhouse gases can lead to global changes (Mankiw). As a result, by driving as well as smoking person commits antisocial act that can potentially harm other people, whereas consumption of sugary drinks does not have any serious side effects. It is rather a personal choice that causes harm to the individual who chooses to consume it. As a result, taxation on sugary drinks may not be as necessary as on cigarettes or gasoline usage.
To sum up, collecting taxes on sugary drinks can negatively affect the US economy and lead to serious social problems. In addition, there is no guarantee that it will really have a positive effect on prevention of obesity. Taxation on sugary drinks can also impair large manufactures that produce soft drinks as well as small businesses that distribute them in local communities. Society is constantly creating and funding diverse anti obesity programs as well. People are even willing to engage in protests in order to prevent this taxation policy. It is also important to stress that sugary drinks are not considered antisocial because they do not have any effects on people around. They directly influence the person who increased their intake. All these reasons indicate that there is no urgent need for taxing soda drinks.