Posts Tagged ‘regressive tax’

Cato — Patrick Basham: Tax on sugary soft drinks

March 31, 2012

In an op-ed on the Cato Institute site here, Patrick Basham writes:

A sugar tax also has undesirable social and economic consequences. This tax is economically regressive, as a disproportionate share of the tax is paid by low earners, who pay a higher proportion of their incomes in sales tax and also consume a disproportionate share of sugary snacks and drinks.

Patrick, please explain why a regressive tax is socially and economically undesirable. It is paid by those who consume the product, rather than being a transfer of wealth from one group to another. Even better, a regressive tax encourages a majority to vote against increased government intrusiveness.

Think about it.