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A Sugary Drink Tax INTRODUCTION QUESTION 1 DEFINITION AND CONCEPTS

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QUESTION 3 POLICY EFFECTIVENESS AND ALTERNATIVE STRATEGIES 4 1. Diagram presenting market for sugar-swetened drinks Unit price of suger-swetened drinks S1 P0 P1 E1 P2 E2 Tax D1 D2 Q2 Q1 Quantity demand and supply of suger-sweetened drinks The diagram clearly evidenced that when Governement levied tax duties on the consumers/buyers, then as they would need to pay higher prices, therefore, quantity

A Sugary Drink Tax INTRODUCTION QUESTION 1 DEFINITION AND CONCEPTS

   Added on 2020-06-05

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A Sugary Drink Tax
A Sugary Drink Tax INTRODUCTION QUESTION 1 DEFINITION AND CONCEPTS_1
Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 1 DEFINITION AND CONCEPTS............................................................................11. Tax incidence...........................................................................................................................12. Economic lesson applicable to taxing surgary drinks..............................................................1QUESTION 2 MARKET ANALYSIS............................................................................................11. Diagram presenting market for sugar-swetened drinks...........................................................12. Diragam representing Australian sugar market.......................................................................23. Impact of introduction of sugar drink tax on non-sweetened items.........................................3QUESTION 3 POLICY EFFECTIVENESS AND ALTERNATIVE STRATEGIES....................41. Interpreting elasticity estimates and its relatinship to the tax on consumption of SSDs.........42. Ways to improve effectiveness of consumption tax on sugary drinks.....................................5CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6
A Sugary Drink Tax INTRODUCTION QUESTION 1 DEFINITION AND CONCEPTS_2
INTRODUCTIONObesity and its relevant health problems is an increasing concern in Australia.Government often charge taxes to alter the behaviour of both the consumers and buyers targetingeconomic welfare. A sugary drink tax is a surcharge charged targeting minimizing theconsumption of drinks with sugar. It includes drinks like carbonated soft drink, energy drink andsport drinks. The main aim of the assignment is to critically evaluate how taxing sugary drinkswill impact the economy. QUESTION 1 DEFINITION AND CONCEPTS1. Tax incidence Tax incidence refers to the distribition of taxation obligation between buyers and sellers.It presents that whether consumers or producers will pay price of the imposed tax. In economies,tax burden or incidence is the examination of effect of particular tax distribution targetingeconomic welfare. It depends upon the price elasticity of demand & price elasticity of supply. Itis because, imposing tax ultimately leads to increase price and affet buyers demand (Deng andet.al., 2017). 2. Economic lesson applicable to taxing surgary drinks According to the Gans and et.al. (2015), Sugary drinks tax is applicable to the economiclesson: 6 that indicates that markets are usually a good way to organize economic activity. Theprinciple tells that levy of taxes distort goods and service prices and affects household decisionsbecause it have a direct impact on prices that helps in reducing excessive intake of sugary drinks(Gans and et.al., 2015). QUESTION 2 MARKET ANALYSIS 1. Diagram presenting market for sugar-swetened drinks1 | Page
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