The truth can be adjusted.—Michael Clayton
It may well be the proverbial sweet spot—where both fiscal and physical fitness goals converge.
Obesity, it has been said begins at home. It is sustained in schools were kids munch on burgers and fries and wash them down with sugary beverage aka soft drinks.
The situation is made worse by the lack of physical activity among school children who are permanently glued to their electronic devices.
What are we to do?
We try to sort the massive mess one problem at a time’ take soft drinks. These carbonated beverages may pack energy for hyperactive kids, which is just fine because they burn the sugar. But the sugar overload is bad for non active children.
Juvenile obesity is a fairly recent phenomenon in the country. Over weight kids are a major problem for both parents and medical/ health professionals.
Now, since they cannot be parted from their electronic gadgets, let’s wean them away from sugary drinks by making them less affordable.
This can be done directly by government through taxation.
And the best part is the Duterte administration has both the political will and the resounding mandate to pursue fiscal reforms.
A tax on soft drinks achieves two goals: generate revenues for government and promote public health.
And PedXing is not making this up.
According to UK-based BioMed Central:
* Excess intake of sugar sweetened beverages has been shown to result in weight gain.
* To address the growing epidemic of obesity, one option is to combine programs that target individual behavior change with a fiscal policy such as a sugar tax or an excise tax on sugary drinks.
* The research is an analysis of six studies from the US and one each from Mexico and Brazil.
* Study shows negative “own-price” elasticity meaning there is a decline in the demand for a product when there is an increase in price.
* There is an increase demand for alternative beverages like fruit juices and milk.
* A net positive “cross-elasticity” meaning the increase in price led to an increase in the demand for substitutes. In this case fruit juices, milk etc.
* In countries that implemented taxes on SSBs, there has been solid evidence in the decrease in the prevalence of obesity and overweight cases; a decrease in the overall Body Mass Index in the sample population.
If you find the above medical findings persuasive, you may realize that the tax proposal is equally compelling. Why
Consider the following:
1. No nutritional value like fast food, processed food and junk food.
2. Excessive consumption may be harmful to health
3. Easily accessible to all ages i.e. restaurants, convenience stores, vending machines, schools cafeterias
4. Discourage consumption and generate additional revenues for the government
So how do we tax as sweet thing? Let us count the ways:
Specific tax or a fix rate. If the tax is an “ad valorem” tax, the specific value of the tax would be based on the cost of the product- thus permitting a company to reduce the pre-tax price of their product, hence lowering the tax level and undermine the health impact (albeit at the expense of profits).
* Sugar tax has more positive impact on the poor. They will be forced to cut down on sugary drinks leading to savings and a healthier lifestyle.
* In contrast, an excise tax on petroleum would definitely impact the poor more i.e. higher transport fares, higher cost of basic commodities like rice, vegetables, poultry because of the higher freight cost.
Behold God’s glory and seek His mercy. Pause and pray, people.