Taxing Sweets: Sweetener Input Tax or Final Consumption Tax?

(2010) Taxing Sweets: Sweetener Input Tax or Final Consumption Tax? Iowa State University

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Abstract

In order to reduce obesity and associated costs, policymakers are considering various policies, including taxes, to change consumers high-calorie consumption habits. We investigate two tax policies aimed at reducing added sweetener consumption. Both a consumption tax on sweet goods and a sweetener input tax can reach the same policy target of reducing added sweetener consumption. Both tax instruments are regressive, but the associated surplus losses are limited. The tax on sweetener inputs targets sweeteners directly and causes about five times less surplus loss than the final consumption tax. Previous analyses have overlooked this important point.

Item Type: Departmental Report
Keywords: added sweeteners, consumption tax, demand, health policy, soda tax, sugar
Subjects: Agriculture and food production
Government finance and taxes
Health and medicine
Health and medicine > Nutrition
ID Code: 20658
Deposited By: Timothy Skeers
Deposited On: 12 Nov 2015 17:06
Last Modified: 12 Nov 2015 17:06
URI: http://publications.iowa.gov/id/eprint/20658