Taxes By David Williams Summary

In the article written by David Williams on August 16, he discusses how the government controls sugar production volumes and assigns quotas to private companies that a part of the cartel. The government also buys excess sugar and sells it at a discounted price to ethanol producers. At the beginning of the semester, we discussed different types of taxes, one was a sin tax. This happens to raise government revenue, limit consumption on things like alcohol, tobacco, gambling, gasoline, and sugar. Elasticity of supply and demand determine who will pay for the tax. A tax on sugar would be an inelastic demand, which would mean that buyer’s pay for the tax. According to Williams, “Washington imposes a hidden tax on every consumer in the nation, to provide excess benefits to the sugar producers.” This is true with the sin tax and the inelastic demand where the buyer’s pay for the tax.

In class, we have drawn free trade graphs a few times to illustrate the point that Williams is making. If we did not trade with other countries, our prices would be a lot lower, but the prices for those importing in Japan would be extremely high and consumers could not afford the products. Therefore, we have the trading sector where price is brought down for those in Japan, but are higher for those in the United States. This helps the producers of the product in the United States, but hurts its consumers. In Japan, this helps consumers, but hurts the producers. This impact is playing a major role for food companies who cannot afford labor or keep manufacturing jobs in the United States and are considering offshoring in order to help out the