A (relatively) recent study by the University of Illinois Chicago found the sugar tax (implemented in several cities,Seattle included) in 2018 may permanently lower the demand for soft drinks.
The study compared the amount of sugar sold in products containing the tax and the same product without the tax. It showed the sugar tax reduced the sales of soft drinks, but substitutions partly offset this. Despite the initial increase in sales of untaxed beverages, the net reduction in sugar consumed two years after the tax was implemented was about 19%.
Another aspect worth noting is consumers’ lack of information about the tax. The sugar-sweetened beverages industry does not have a comprehensive survey, but consumers should be aware of the tax. The government should display the levy prominently in grocery stores. The taxation on these beverages could also positively affect the price of those products, and it might even nudge people into changing their habits.
The Sugar Tax May Have Decreased Demand
The study results are encouraging. The results suggest that the tax permanently reduces the demand for these foods (beverages? Treats?). The study posits the sugar tax should be implemented in all other cities. If implemented it could reduce obesity. These results are promising and should be pursued by policymakers to curb sugary drinks. If the tax is appropriately implemented, it may prevent more obesity, diabetes, and related diseases in the US.
The tax is regressive, but the economic costs of obesity can be justified by the increased number of sugary products and the tax’s regressive effect on lower-income consumers. Moreover, the tax would benefit the low-income population disproportionately. However, the tax is likely to regress other populations, including lower-income ones. The net impact of a sugar tax on a lower income population would be beneficial.
A sugar tax in Seattle is fate first part of a long-term solution throughout the state (and ideally the country). The tax did not affect cross-border shopping, so those consumers didn’t feel the effects. Nevertheless, the tax is likely to reduce the demand for sugary drinks. The government hopes to prevent obesity-related disease by promoting healthy habits.
Despite the promising news about the sugar tax, it’s still a question as to whether or not it will permanently reduce sales. While the current government is trying to justify the tax by increasing the price of processed foods, a new study suggests that the sugar tax implemented in 2018 is the best solution. The sugar tax on beverages is an excellent first step, but there’s more to be done. The amount of sugar derived from processed foods sold could be considerably less than the new taxes.