October 31, 2010

Soda Tax and How it Could Reduce Obesity

Over the years, America’s love affair of soda has remained strong even with the economic downturn. With the substitution of sugar cane with high fructose corn syrup in sodas decades ago, major companies such as Coca-Cola™ and PepsiCo™ have enjoyed increased supply of their goods with a cheaper sugar substitute along with a overall boosted revenue for that choice.

An online Washington Post article predicts that the effects of a tax increase on soda may suay America's affinity for a timeless beverage. According to a study by the U.S. Department of Agriculuture’s Economic Research Service, a 20 percent increase in the price of soda could result in a decrease consumption of soda, which could lead to the reduction of excess calorie intake of adults and children in the U.S. and possibly obesity. With America’s obesity problem increasing, this could be a possible solution that would solve the current health epidemic, especially with soda rampant in schools, workplaces, and the households of America. Many proposals for this new idea have been turned down but many health officials insisted on carrying it out, despite the possible oppositions from the soda company themselves.

Even though the scientific data of soda and obesity may not correlate into the economic sector, the taxation of soda on the other hand is heavily involved in economics since it touches the behavior of households, their change in demand of soda, and how it could eventually turn into an inferior good to many with the mandated tax.


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