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Taxing Sweets: Sweetener Input Tax or Final Consumption Tax?

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  • Miao, Zhen
  • Beghin, John C.
  • Jensen, Helen H.

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 sweet 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 analyzes have overlooked this important point.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado with number 61511.

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Date of creation: 2010
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Handle: RePEc:ags:aaea10:61511

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Keywords: consumption tax; sugar; added sweeteners; demand; health policy; soda tax; Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Health Economics and Policy;

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Cited by:
  1. Miao, Zhen & Beghin, John C. & Jensen, Helen H., 2011. "Accounting for Product Substitution in the Analysis of Food Taxes Targeting Obesity," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103320, Agricultural and Applied Economics Association.
  2. Beghin, John C. & Elobeid, Amani, 2013. "The Impact of the U.S. Sugar Program Redux," Staff General Research Papers 36172, Iowa State University, Department of Economics.
  3. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, vol. 106(C), pages 77-88.

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