Unhealthy Food And Drink Taxation Essay

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Increasing unhealthy food and drink taxation could reduce the incidence of obesity and related diseases

In the last years, an increasing number of people experienced the obesity problems and the minimum age of overweight tends to decline year by year. In fact, most researches show that nearly one fifth child ages 6 to 11 are overweight, even the number of obese children as nearly doubled in the last 20 years (Henshaw. 2011). Children developed a bad habit like having unhealthy food and drink for a long time. How to control this condition is becoming an urgent thing required people to take actions. The taxation of unhealthy diet could improve to limit their intake and reduce cases of obesity or other related diseases, for example, diabetes
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A consequence of this is that the tax increase inhibition of the production produces even affecting business’ competitions (Williamson. 2008). In economics and related fields, a transaction cost is a cost incurred in building an economic exchange. When the unhealthy food and drink taxation rise, producers should improve more cost than before. As a result, they do not have willing to produce the same quantity and quality as usual. It would have a negative influence on the development of those unhealthy diet businesses. So that the unhealthy production decline, affecting the competitiveness of enterprises. In addition to this, if the balance in this manufacture has been broken; producers which want to keep the market covers could initiate to change the way of production, producing more healthy food. Barasi thinks that it is a strength way through public health policies to improve nutritional status (2003). Limiting products from a legal point in original materials, production and sales. And the government will subsidize encourage the businesses produce more productions and research them focus on healthy food and defense-related diseases, which is not cut corners for ensure their own profits, it is an advance for the producers a long-term sustainable development path. Furthermore, nowadays, it could be found fast food restaurants everywhere in developed…show more content…
According to the financial leverage principle, which is one of the most important principles in Economics, consumers could be affected by taxation directly and it would provident them away from obesity and related diseases. The leverage theory is defined as total long-term funding under the same conditions, the cost of debt paid by enterprises from operating profit is fixed, while operating profit increased or decreased, the cost of debt for every dollar of business profits will be correspondingly reduced burden little or increased, leading to additional gains or losses per ordinary share (Nicholson. and Snyder. 2011). By the element, taxation of unhealthy food and drink increasing; the cost of producer would improve and be constrained raise prices of productions; declining purchasing power and reducing individual unhealthy food and drink intake to subside the likelihood of disease occurrence (Ogden, 2010). Also, it can be inferred from this element, as the guidance of the government, consumers change their eating habits, thus speeding up the unhealthy foods withdrawn from the market by producers. It means that people would be changed with the taxation’s changes into healthy food and drink habits. In addition, If the business in a relatively stable industry occupies a more favorable position in the market, then the
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