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Monday, 17 September 2018

Sin taxes can help improve public health

Does a sin tax actually work? Or do consumers just work around it? Taxes imposed on popular vices including sugar, tobacco and alcohol apparently result in an overall drop in sales of the taxed items that may point to lower consumption levels, according to The Economist. In the US for example, a 1% increase in prices led to a 0.5% drop in sales. That said, however, while Berkeley witnessed a 10% drop in the sales of sugary drinks back when it imposed a high tax on them in 2015, people in Denmark were buying high-tax butter from neighboring countries to avoid paying the hefty duty (watch, runtime: 1.27).

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