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Ed Dolan’s Econ Blog
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The Economics
of a Soda Tax
Created April 13, 2010
Te...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Tax Flavor of the Year: A Soda Tax
 Taxes go in ...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Elasticity of Demand for Soda
 The effectiveness...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Effect of a Tax on Prices
A soda tax has three ma...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Tax Revenue
 The tax revenue received by the
gov...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Deadweight Loss
A tax also produces a deadweight ...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Negative Externalities and Social Cost
 If consu...
Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Offsetting social cost with a “sin tax”
 A tax o...
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Posting P100413 from Ed Dolan’s The economics of a soda tax

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Posting P100413 from Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
Tax Flavor of the Year: A Soda Tax
 Taxes go in and out of fashion. One
fashionable tax this year is a “soda tax,”
usually extended to cover all sweetened
beverages.
 The popularity of a Soda tax is driven by
two factors
 Rising budget deficits at both the
federal and state levels
 Increased concern about obesity
and its associated health-care costs
 Several states have instituted soda
taxes and a national soda tax is under
consideration
Read more about soda taxes:
Jane Brody, “A Tax To Combat America’s Sugary Diet,” NYT, Apr. 5, 2010
Kelly Brownell et. al, “Ounces of Prevention,” New England Journal of
Medicine, April 30, 2009
Soft Drink Taxes: A Policy Brief, Rudd Center for Food Policy and Obesity,
Yale University, Fall 2009 www.yaleruddcenter.org
www.pdclipart.org

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