Assignment 2: A Case Study

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3.1 Content (JOL)

Purpose and intent of Measure D

To reduce the consumption of SSBs the City of Berkeley, California has decided to put an excise tax of 1-cent-per-ounce on SSB-products and sweeteners for a temporary period of time of 12 years, from January 1st 2015 until December[j1] 31st 2026.

The main purpose with this legislation is “to diminish the human and economic cost of the diseases associated with the consumption of sugary drinks by discouraging their distribution and consumption in Berkeley through a tax” (Capitelli, 2014, p. 3).

It is specified that the excise tax will be payable by the distributors of the SSBs and sweeteners and not the consumer, unlike a sales tax that would be directly payable by the consumer. By imposing an excise tax, the customer will indirectly be payable because of the rising prices, but only to the extent of how much the distributors and retailers raise the price. Had it been a sales tax, the consumer would be the one to pay the tax, because retailers would not have the opportunity not to raise the prices of SSB-products (Investigating Answers, 2001a-2015, 2001b-2015)[j2] . …show more content…

These products include sodas, energy drinks, sports drinks and pre-sweetened ice teas and

sweeteners such as sucrose, fructose, glucose and high fructose corn syrup, with the exemptions of infant formula, milk products, products for medical use, alcoholic beverages, beverages used for weight reduction and natural fruit and vegetable juice.

The ordinance proclaims that the excise tax shall be levied on the first distribution of SSB-products within the city of Berkeley. As exemptions to this ordinance are, distributors who are not subject to taxation by the city, retailers with less than $100.000 in annual gross receipts and the distribution of sweeteners to food