Economics

Sin taxes are usually imposed on goods that governments want to discourage consumption by the society. Traditionally, such targeted tobacco and alcohol products as a way of reducing their negative health impact in the society. However, with the obesity epidemic rocking the American population, some state governments have taken an initiative of imposing regressive taxes on high-sugar beverages and junk foods. This essay seeks to establish the rationale and critics of sin taxes on high-sugared beverages and junk foods. The author talks about how sin taxes relate to the roles of government, equity and fairness in the society, the question of tax elasticity, and the concept of substitution effect.

The role of the government is to ensure a reliable environment for the sustainable development of the society. Ensuring sustainable health in a nation is a key concern for any government. The government thus has a constitutional authority to interfere with the liberties of its citizens to safeguard life by dictated healthy lifestyles (Holcombe, 2006). According to proponents of sin taxes on soda and junk foods, such a step could evidently reduce the level of their consumption among the public. This has the end result is reducing the health complications associated with these consumable products in the society.

The laws of equity and fairness demand that all citizens should be treated relatively if not absolutely equal. Proposals to impose regressive taxes on high-calorie products are seen as targeting the poor and minorities in the community. Sodas in particular are more popular among the low income earners and minorities in the community. Still, such sin taxes are seen to compromise sustainable living of the poor neighborhoods. This is because there are no measures in place to make healthy foods more accessible and affordable to all members of the community (Holcombe, 2006).

The concern for imposing sin taxes on high-sugar beverages and junk foods in some states stems from the problem of economic recession. This is because such has negatively impacted on revenue availability for the smooth running of government services (Holcombe, 2006). The claimed reason for sin taxes on health risking products is to cater for the high cost of health care provision to the people. However, most state governments have channeled or plan to channel less of this additional revenue into ensuring comprehensive health care provision scheme to all. This means that governments are imposing sin taxes as a way of countering the effects of tax elasticity.

Sin taxes results into substitution effects by consumers. The proposed sin tax scheme by New York State has only targeted sodas while ignoring other beverages like fruit juices and sweetened beverages. This could have been based on the fact that such products are not quite commonly used. Nevertheless, most of these beverages have even higher calorific values compared to sodas. Therefore, with increased retail prices for sodas, consumer demand is bound to shift to other types of beverages which could even impose a greater health risk to them (Holcombe, 2006).

In conclusion, sin taxes are imposed by governments to discourage the consumption of some products among its citizens. As has been claimed by many in the society, the claims by government that the additional revenue gained through sin taxes will be used to improve health care, is debatable.
Therefore, citizens should keep an eye to ensure that governments implement a comprehensive fight on high-sugared beverages as well as investing the sin tax revenue in nutritional awareness programs.