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Tax on Fizzy Drinks a Failed Experiment That Hurts the Poor

Tax on Fizzy Drinks a Failed Experiment That Hurts the Poor

Responding to recent media coverage of a group of academics calling for a 20% tax on fizzy drink, Jordan Williams, Executive Director of the Taxpayers’ Union says:

"Denmark’s tax on saturated fat, introduced in 2011, was an economic disaster. The Danish tax was abandoned 15 months later and did little, if anything, to reduce harmful consumption. Worse, it was estimated to have cost 1,300 jobs. Why would New Zealand want to repeat this mistake?"

"Taxing the Kiwi tradition of a warm pie and can of coke won’t reduce obesity. The overseas experience is that fat taxes merely lead to compensatory purchasing and brand switching."

"The evidence of failure of putting ‘sin taxes’ on products when demand is inelastic is overwhelming. The people pushing for these new taxes are taking no account of what actually happens when their policies are tested in the real world."

"Kiwi families already pay too much tax and these academics want to pile on more for life’s little luxuries. Politicians will use it as a money grab under the guise of ‘harm reduction’."

"Kiwi taxpayers, particularly the poor, will be the losers," concludes Mr Williams.

ENDS


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