Imposing Sugar Tax on Chocatak

Imposing Sugar Tax on Chocatak

Introduction

A speedily escalating consumption by children of Chocatak attracts lots of concern from the government owing the potential harmful health effects of such a sugary snack bar. As a junk food, Chocatak could facilitate development of lifestyle diseases and disorders that may entail diabetes, tooth decay, obesity and high-blood pressure (Shinde, Vyas and Goel, 2017). Conversely, the government is greatly concerned on the issue since it provision of healthy foods and protection of its citizens serves as one of its (the government’s) obligations. Economy would probably thrive in a nation with healthy residents due to varied reasons that may entail availability of strong workforces, reduction of absenteeism from work and decline in expenditures on health related treatments. Accordingly, it is highly advisable for the government to impose huge sugar tax on the Chocatak to discourage its consumption by the children, thus promoting good health.

Nature of the Economic Problem

The critical issue is that the government is facing an impending disaster with regards to its economic growth and prosperity as children who could otherwise contribute significantly in development of the nation consume harmful food items. The rising consumption of Chocatak could attract lots of lifestyle diseases and disorders that would force the government to spend heavily in treating and caring for its citizens. Besides, the government would not realize sufficient, competent and strong workforce that could drive economic developments in future. Nevertheless, the rapid rise in consumption of Chocatak attracts substantial profits and growth of firms and businesspersons who are involved in the production and sale of the product. Consequently, the government is currently enjoying an excellent economic growth. Therefore, the government has to act swiftly by imposing a sugar tax to effectively address the issue of increasing consumption of Chocatak while encouraging economic prosperity (Lloyd-Williams and Capewell, 2016).

Effects of Sugar Tax

The government would realize more revenue by imposing a huge sugar tax on Chocatak. Since Chocatak is relatively popular among children owing to the prevalent high consumption, the government would possibly gain more revenue by imposing a significant tax. Although a huge tax could result in a drop in the rate of consumption of Chocatak by children, the government would still attain reasonable revenue (Allen and Allen, 2019). Subsequently, the government would acquire funds that could be spent on addressing health problems that are caused by consumption of junk foods. As such, consumers of Chocatak (especially the children) would find it logical for the government to impose the huge tax to facilitate successful implementation of practices that promote good health. Thus, consumption of Chocatak would probably continue, though at a relatively lower rate since only children and other consumers who are interested in the corresponding use of tax revenues and can afford the new and raised prices would purchase it.

Moreover, imposition of a sugar tax could attract a shift in supply and consumption of snack bars. Firms that manufacture and sell snacks would consider producing alternative snacks other than Chocatak to increase demand for their products. That is, demand for Chocatak could dramatically decline following the imposition of a sugar tax as some of the consumers may find it unaffordable to meet the higher prices (Encarnação et al., 2016). Conversely, the manufacturing companies could generate healthier products that are cheaper than Chocatak due to absence of the sugar tax. Besides, the consumers of snacks may develop significant interests in the alternative snacks that are healthier than Chocatak. Consequently, the government may not realize any rise in revenue it collects from the sale of Chocatak, but it (the government) would enjoy a drastic reduction in the costs of treating and caring for its citizens due to problems that arise from the consumption of junk foods. Therefore, the government would succeed in the fight against the increasing consumption of Chocatak by imposing the sugar tax.

However, imposition of a sugar tax on Chocatak may not attract any significant change in the rate of its consumption by children. The young population may treat Chocatak as a demerit good, thus continue consuming it despite its potential harm on their health (McCormick, Stone and Corporate Analytical Team, 2007). Most of the children could continue consuming large volumes of Chocatak due to addiction, negligence or ignorance of harmful effects of the product. Consequently, there could be insignificant change in demand of Chocatak as the consumers strive to purchase it in spite of the high prices. Hence, imposition of a sugar tax on Chocatak may not discourage its rising consumption by children.

Issues that the Government Should Consider

Although it is crucial for the government to consider discouraging consumption of Chocatak and probably other junk foods through imposition of sugar taxes, it (the government) should factor in relevant aspects that may entail rights of its citizens, fairness and justice as well as impacts on economic growth. Imposition of unsuitable sugar tax could draw adverse effects on the economy and the society.

Low-income Earners

The government should be concerned about the worries of citizens with low income to avoid over taxation that could lead to deduction of high percentages of their incomes. Since some of the consumers of Chocatak may continue using the product despite an increase in price due to sugar taxation, the government should not overexploit them by imposing huge regressive taxes (Bogenschneider, 2015).

Development of Better Alternatives

The government should consider the capacity of engaged companies to develop suitable alternatives that are healthier than Chocatak before imposing the tax. The idea of encouraging firms to develop healthier snacks may prove unfruitful due to varied reasons that may entail inadequacy and unavailability of required raw materials and expertise.

Capabilities of Consumers to Switch to Better Alternatives

The government should consider the capacity of the children and other consumers of Chocatak to switch to other alternative snacks before imposing the tax that discourages its (Chocatak’s) consumption.

Benefits of Improved Health among Children

The government should take into account all the potential benefits of discouraging consumption of Chocatak. Precisely, the government should adequately evaluate and determine whether it is more beneficial to discourage consumption of the product to encourage good health among children by factoring in aspects that could entail costs of sustaining a healthy society as well as impacts of reducing demand for Chocatak.

Income Distribution

The government has to consider the effects of sugar tax on income distribution before imposing the tax. Conversely, the government should implement the tax if it encourages distribution of income through relevant projects that entail those that deal with problems associated with junk foods.

Job losses

A responsible government would consider the benefits of discouraging consumption of a given product as well as the amount of jobs that citizens would lose. Accordingly, the government could opt to incur significant job losses while encouraging a healthy society if that practice attracts more benefits compared to the lost jobs.

Citizens’ Freedom and Authority to Make Judgments

The government should protect the consumers’ right to choose what they desire and are willing to purchase. Although the government should endeavor to sustain a healthy society, it should be cautious enough to allow freedom for the citizens to select what they need because they (citizens) would spend their income on purchasing such products. However, the government should employ apt measures that may entail education of the residents on matters about good health and harmful effects of particular junk foods to facilitate willful reduction of consumption by children and other persons.

Available Alternatives

The government should consider all the possible alternatives that could be employed to discourage consumption of Chocatak before implementing the sugar tax. Other alternatives could include education on harmful effects of junk foods (including Chocatak) and ban on advertising of the undesired product (Kovic et al., 2018).

How to Implement the Tax

If the government chooses to implement the sugar tax, it should determine whether to impose a content or volume based tax (Young and Bielińska-Kwapisz, 2002). Even so, it is essential for the government to embrace a gradual implementation of the tax to avoid the otherwise unanticipated adverse consequences. Specifically, the government should conduct a pilot project to test and evaluate the effectiveness of the tax before full implementation of the tax (Chelan, 2006). Such a practice would attract some vital benefits that may entail sufficient understanding of the effects of the tax on the rate of Chocatak consumption by children.

Conclusion

Imposition of a sugar tax on Chocatak could attract lots of benefits to the government and its citizens. Specifically, the government would realize more revenues while citizens who lead healthy lives as involved firms engage in production of healthier snacks. However, the tax may not attract any significant reduction in the rate of consumption of Chocatak by children because it could be a demerit good. Besides, the tax could attract detrimental consequences that may entail over-exploitation of low-income earners, job losses and undesired control on what citizens should consume. Accordingly, the government should consider a number of aspects that entail possibility of healthier alternatives, income distribution, freedom of citizens to make judgments and benefits of improved health among children. Also, the government should embrace a gradual implementation of the tax by using a pilot project to gain more insights on effects of the tax on consumption of Chocatak.

Word Count: 1510

References

Allen, W.M. and Allen, K.J., 2019. Should Australia tax sugar‐sweetened beverages?. Journal of paediatrics and child health.

Bogenschneider, B., 2015. Critical Legal Studies and Regressive Taxation in the United States.

Chelan Li, L., 2006. Path creation? Processes and networks: how the Chinese rural tax reform began. Policy and Society, 25(1), pp.61-84.

Encarnação, R., Lloyd-Williams, F., Bromley, H. and Capewell, S., 2016. Obesity prevention strategies: could food or soda taxes improve health?. The journal of the Royal College of Physicians of Edinburgh, 46(1), pp.32-38.

Kovic, Y., Noel, J.K., Ungemack, J.A. and Burleson, J.A., 2018. The impact of junk food marketing regulations on food sales: an ecological study. Obesity reviews, 19(6), pp.761-769.

Lloyd-Williams, F. and Capewell, S., 2016. Selling a sugar tax: the sweet smell of success?. Community dental health, 33, pp.174-176.

McCormick, B., Stone, I. and Corporate Analytical Team, 2007. Economic costs of obesity and the case for government intervention. Obesity reviews, 8, pp.161-164.

Shinde, P., Vyas, K. and Goel, S., 2017. EFFECTS OF JUNK FOOD/FAST FOOD STUDY.

Young, D.J. and Bielińska-Kwapisz, A., 2002. Alcohol taxes and beverage prices. National Tax Journal, pp.57-73.

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