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Should We Tax Sugar and If So How?
Author(s) -
Lloyd Peter,
MacLaren Donald
Publication year - 2019
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12299
Subject(s) - public economics , ad valorem tax , sugar , value added tax , tax reform , economics , indirect tax , welfare , tax credit , business , food science , market economy , chemistry
Abstract This article reviews empirical studies of proposals to tax sugary products in Australia. A corrective tax must be designed carefully if it is to increase national welfare. There is an underlying problem in designing such a tax because consumers are heterogeneous. The best choice of goods to be taxed is the group of sugar‐sweetened‐beverages, the best tax base is the sugar content and the best tax form is a progressive specific tax with two or more levels. We recommend initial rates that are equal to those of the UK tax on SSBs.