Msb Tax Case Study

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Uncertainty The SSB tax may need to be redesigned in order to be accurately applied to the many different kinds of sugar-sweetened beverages. Taxes that have been implemented in the United States are measured on a volume basis, such as the penny-per ounce tax in Berkeley, California. Accordingly, a high-sugar drink would be taxed the same as a low-sugar drink of the same volume. An example of this inconsistency would be apparent between two drinks: “12 ounces of Welch's grape juice contain 262 calories and 59 grams of sugar as compared to the 140 calories and 39 grams of sugar in a 12-ounce can of Coca-Cola” (DeSantis). It would be biased to charge the same tax for the two drinks despite one having higher sugar and caloric content.…show more content…
For example, suppose there is an individual who rarely consumes soda and the diagnosis of diabetes is rare in his lifetime due to his family background and healthy habits; If he wishes to purchase a can of Coca Cola may be angered by the tax. Since he may not necessarily incur SSB-related costs, he may wonder why he is economically responsible for the costs associated with the aftermath of SSB consumption. Proponents of the tax would suggest that the tax is regarded as an “implicit premium” in an “implicit insurance system,” in which individuals agree to “a tax equal to the medical expenses arising from each unit of consumption.” This is a form of risk allocation in which one party's risk of loss is shifted to another party” (DeSantis). If society agrees to proportionately divide the tax, or in other words, the cost of treating SSB consumption-related costs, the SSB tax can be modelled as a type of insurance, in which the law of large numbers will offset certain risks. Choice There is no argument against the fact that SSB taxation affects individual’s choices regarding SSB consumption. Food autonomy is limited by government-implemented policies such as the SSB tax. To be autonomous, one must be able to make choices without constraint and understand those choices. This can be simplified to three dimensions – liberty, understanding, and psychological capacity (Barnhill and King). The SSB tax contradicts

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