Cook County, Ill, lawmakers voted Tuesday to repeal a sweetened beverage tax aft
ID: 1146183 • Letter: C
Question
Cook County, Ill, lawmakers voted Tuesday to repeal a sweetened beverage tax after less than three months in effect, delivering a big win for the soda industry, which is battling similar measures around the country Cook County, which includes Chicago, implemented the tax on sweetened drinks on Aug. 2 after the board president, Toni Preckwinkle, cast a tie-breaking vote in favor of the tax. Ms. Preckwinkle, a Democrat, positioned the tax as a way to fill a $200 million budget hole and a bid to wean residents from unhealthy drinks, garnering support from public health advocates, including former New York City Mayor Michael Bloomberg. The beverage industry pushed back hard on the tax, arguing that it hurt local businesses and residents. It also challenged the portrayal of the tax as an effort to improve public health since it also applied to sugar-free beverages like diet soda. "Cook County working families and businesses have overwhelmingly rejected the county's beverage tax,"said The Can the Tax coalition, a group sponsored by the American Beverage Association, in a statement. "Commissioners were listening and common sense has prevailed. The repeal of the tax marks an important victory for the beverage industry, as it seeks to quas in January, and
Explanation / Answer
1) Increase in tax would help to raise the revenue only if demand is inelastic. Demand would not face substantial fall if demand happens to be inelastic. Hence, increase in tax would cause rise in revenue collection.
2)
a) if demand is elastic: It would not help to raise substantial amount of revenue but would help to reduce consumption of it. It would go long way in reducing the consumption of sin good. Whole society would be saved from adverse and harmful impacts of soda consumption.
b) If demand is inelastic: If demand is inelastic, it would assist in raising sufficient amount of revenue. Collected revenue can be spent on various social and community activities.