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Policyalternative_Rebecca.docx
Policyalternative_Richard.docx
Policyalternative_Rebecca.docx
In 2018 the city of Seattle implemented a sugar sweetened beverage tax. The difference with this tax is that it is not actually a sales tax the tax is put directly onto the distributors of the beverages. What this tax does is it makes a distributor pay 1.75 cents per oz of any beverage that they sell within the Seattle city limits (Sweetened). The impact of this tax was that the distributors and sellers of the beverages passed the increase taxes on to the consumers by increasing the in-store prices that that a person on average pays for their sugary drink. The reasoning behind this tax was to increase the health of the Seattle city residents and decrease the amount of sugary beverages that were consumed. There are multiple different health complications including cavities and diabetes that have been linked to an increased consumption of sugary drinks. This tax policy is being used in over 40 countries around the world and then several different cities within the United States (Powell). Looking at data internationally as well as in Seattle the evidence shows a decrease in sales of sugar sweetened beverages especially when it comes to the larger sizes of these beverages where the tax is more pronounced because the tax is done per oz. The study that was done by Powell and Leider show that on average when Seattle who has the beverage tax was compared to Portland who does not have the beverage tax the sales fell by about 20% for beverages that were taxed. When thinking about this keep in mind that not all sweetened beverages are taxed the beverages to in order to be taxed must meet a certain threshold. Over the same time period the study also looked at the amount that each of the beverages went up in cost and the Seattle areas beverages went up more in cost than the Portland ones did by a comparatively significant amount. In actuality the amount was not that much. The beverages that did not have the tax placed on them in Seattle increased over the same time period in sales amount indicating that people were more willing to choose other beverages that did not see the tax and corresponding price increases. There is not enough data at the time of this study to indicate whether cross-border shopping was being affected with the increase in taxes. Looking at other states who have had the sales tax for longer indicate that there is an increase in cross-border shopping for people that truly want their sugary drinks at a reduced cost. This increase in tax revenue is supposed to support healthy food options and access as well as child health readiness and development in schools. Unfortunately, in Washington state all major state tax revenue is deposited into the general fund since Washington is a general fund state and then is allocated from there.
The secondary evaluative criteria of ethics starts to come into play with this tax because the tax is meant to duce the amount of sugary drinks that people drink on a regular basis in order to increase their health. Where ethics comes into play of this is what role does the federal government have to decide on the health of its citizens. If a person wants to increase their chance of cavities as well as obesity and diabetes that is that person's right and choice not the federal government or the state government or the local governments to choose for them.
When looking at cross-border shopping the consumer has to weigh the difference of the price of the extra travel time and the costs associated with that versus the cost of just paying the increase for the sugary desire to drink. Looking at the primary evaluative criteria of effectiveness criteria starts to play in here when looking at cross-border shopping especially when it comes to Seattle specifically. The sweetened beverage tax only applies to the city of Seattle itself not the entire Seattle metropolitan area. Depending on where the residents reside it could be quite easy for them to drive a couple of blocks and be outside of the affected area of the tax and still be able to get the sugary and sweetened drinks at a reduced price thus reducing the overall effectiveness of this tax but still hurting the businesses that it affects.
The administrative feasibility of the tax as well as the fairness feasibility of the tax are both quite straightforward. About 4% of the tax revenue goes to the administrative burden and maintaining the tax itself meaning that most of the tax revenue is available to go to the program stated. As far as the criteria for fairness goes, everyone that wants to buy a sugary sweetened beverage in the city of Seattle gets to buy the same exact beverages for the same price. Any distributor that is going to sell within the city of Seattle is going to be subject to the same tax providing their beverages meet that criteria if they don't want to be subject to that tax they either need to change their beverage so it doesn't does not meet that criteria or not sell in the city of Seattle. Overall, as far as taxes go this is quite a fair tax there are no different tiers or other levels the different people have to meet.
An alternative or change in order to improve the effectiveness of this tax would be to incorporate more of the Seattle metropolitan area and possibly even the state of Washington instead of just the city of Seattle itself. This would reduce the cross-border purchases of sweetened beverages as well as increase the overall tax revenue. An alternative to this tax when it comes to the ethics criteria dilemma could be to increase education on the risks of drinking an increased amount of sweetened sugary drinks instead of increasing the tax on them to discourage people from drinking them. A dedicated educational campaign to the risks and drawbacks of them has the potential to have a similar effect as the tax but not have the drawbacks of the government in some form influencing the health of their citizens directly in a monetary fashion. Recent studies suggest that having graphic warnings on the packaging as well as an increase in overall education of the risks has a more substantial effect on health and reduction of sugary drink consumption then this type of tax does (Henriquez). The tobacco industry saw the effects of this in both plain packaging and in the education on the risks of smoking with a significant decline in overall smokers within the United States. Another potential solution instead of taxing the drinks is to limit the buy one get one free type of sales that are often done on sugary beverages.
Henriquez, E. (2022, March 7). Beyond sugar taxes: Alternative approaches to sugar... Euromonitor. https://www.euromonitor.com/article/beyond-sugar-taxes-alternative-approaches-to-sugar-reduction-in-global-soft-drinks
Powell, L. M., & Leider, J. (2021). Impact of a sugar-sweetened beverage tax two-year post-tax implementation in Seattle, Washington, United States. Journal of Public Health Policy, 42(4), 574–588. https://doi.org/10.1057/s41271-021-00308-8
Sweetened beverage tax - seattle.gov. City of Seattle . (2019). https://www.seattle.gov/Documents/Departments/SweetenedBeverageTaxCommAdvisoryBoard/FactSheets/SweetenedBeverageTax_FactSheet_2019.pdf
Policyalternative_Richard.docx
Policy Alternatives
An integral aspect of policy analysis lies in grasping the evaluative criteria to ensure comprehensive understanding of a policy's key components. Among its myriad benefits, the evaluative criteria guarantee replicable results in policy assessments. This advantage becomes particularly evident in contentious policy domains, such as in the complex landscape of retirement policy that is marked by copious amendments and proposed policy changes.
Article Choice
An article by Marr et al. (2013) aptly captures the complexity of policies surrounding retirement in the United States, particularly with regard to retirement tax incentives, making it an ideal reference for understanding the nuances of the retirement system enabled by the tax law provisions of the Internal Revenue Code of 1986 that legislated the retirement plans in use today.
Article Key Points Summary
Despite their pivotal role in shaping a nation's welfare and well-being, retirement policy provisions pose intricate and divisive challenges. Tax incentives which are inseparably linked to this policy, serve as corresponding tools, encouraging individuals and corporations to save diligently for the post-workforce period. Marr et al. (2013) note that retirement tax incentives, such as those associated with IRAs and pensions, represent some of the largest federal tax expenditures for the American population. However, despite an annual cost exceeding $100 billion, the authors argue that these incentives provide limited actual encouragement. This observation gains significance when considering that these subsidies disproportionately benefit wealthier households, with the top 20 percent receiving nearly twice as much in retirement tax subsidies as the bottom 80 percent combined. Moreover, the authors also note that contribution limits also disproportionately benefit individuals in higher tax brackets, as they receive higher subsidies for their contributions. This aligns with evidence suggesting that low-income households are among the least prepared for retirement, given, among other factors, their limited existing savings and often living from paycheck to paycheck.
Analyzing Article Points: Selecting Three Evaluative Criteria
Evaluative criteria serve as a structured framework for appraising the success or failure of a policy, facilitating a thorough objective assessment. In this light, Marr et al.'s (2013) article on retirement policy can be examined through three primary evaluative criteria: effectiveness, efficiency, and fairness.
Effectiveness:
Right from the outset, Marr et al.'s (2013) article asserts the gross ineffectiveness of the policies that govern and codify retirement tax incentives. It argues that despite being mostly intended for individuals in lower tax brackets, who may lack savings or healthcare insurance post-retirement, these incentives demonstrably fail, rendering them grossly ineffective. This prompts critical questions regarding the genuine impact and reach of these incentives in realizing their intended objectives.
Efficiency:
Marr et al.'s (2013) note that retirement tax incentives, such as those associated with IRAs and pensions, represent some of the largest federal tax expenditures for the American population. Despite an annual cost exceeding $100 billion, the authors argue that these incentives provide limited actual retirement-saving encouragement, which was the primary goal of the provisions that facilitate these incentives. According to estimates by the Congressional Budget Office (CBO) for the period 2014-2023, tax breaks for retirement contributions and earnings are projected to be the second-largest tax expenditure, totaling $2 trillion. This speaks to an outrageously high level of inefficiency of the retirement tax incentives and the policies they are entrenched in.
Fairness:
Billions of dollars allocated to retirement tax incentives as subsidies have limited impact on the poorer segments of society. Marr et al.'s (2013) article contends that the top 20 percent of households receive almost double the retirement tax subsidies compared to the combined total for the bottom 80 percent. This stark disparity reinforces that the policy is quite unfair especially considering that these incentives are primarily aimed at lower-income households.
Examining Policy Alternatives
Recognizing the financial hurdles confronting individuals in lower tax brackets—those most adversely affected by the fluctuation or absence of paychecks—underscores the urgent need for retirement plans and policies specifically designed for the majority of the workforce. This demographic, often living paycheck to paycheck, unfortunately constitutes a substantial portion of the growing contingent worker population, as posited by Gale et al. (2020). The authors emphasize that the existing retirement policy and concurrent employer-focused retirement system was not devised with contingent and low-wage workers in mind, leaving much to be desired. In response to this, especially for contingent workers who typically fall into the lower tax bracket, the authors propose several crucial measures. The central recommendation involves the enhancement of tax benefits, with a particular focus on refining the Retirement Savings Contribution Credit commonly known as the saver's credit. The authors underscore the potential impact of modifying this credit, emphasizing its crucial role in aiding low and moderate-income households. By tailoring the saver’s credit to better suit the financial circumstances of these demographics, it becomes a strategic tool for encouraging and facilitating retirement savings. This could be done, for example, by making the credit refundable, and having it directly deposited into the individual’s retirement account.
This targeted approach acknowledges the specific needs of those in lower income brackets and aims to create a more inclusive and effective system for fostering long-term financial security. In addition to the emphasis on tax benefits, another critical suggestion involves the restructuring of policies to enable spouses to contribute fully to a retirement account irrespective of their marital status (Gale et al., 2020). This adjustment is seen as a significant step in assisting low-income families to save more effectively for retirement. Currently, limitations arise if one spouse has an employer-sponsored retirement plan, effectively curtailing deductions. By restructuring these policies, the aim is to remove barriers and ensure that both spouses, regardless of marital status, can contribute fully to their retirement accounts. This would not only promote financial equity but also enhance the ability of families with lower incomes to accumulate meaningful savings for their retirement years, thus enhancing the effectiveness, efficiency, and fairness of the existing retirement policy.
References
Gale, W. G., Holmes, S. E., & John, D. C. (2020). Retirement plans for contingent workers: issues and options. Journal of Pension Economics & Finance, 19(2), 185-197.
Marr, C., Frentz, N., & Huang, C. C. (2013). Retirement Tax Incentives Are Ripe for Reform. Center on Budget and Policy Priorities, 1-9.
Policyalternative_Rebecca.docx
In 2018 the city of Seattle implemented a sugar sweetened beverage tax. The difference with this tax is that it is not actually a sales tax the tax is put directly onto the distributors of the beverages. What this tax does is it makes a distributor pay 1.75 cents per oz of any beverage that they sell within the Seattle city limits (Sweetened). The impact of this tax was that the distributors and sellers of the beverages passed the increase taxes on to the consumers by increasing the in-store prices that that a person on average pays for their sugary drink. The reasoning behind this tax was to increase the health of the Seattle city residents and decrease the amount of sugary beverages that were consumed. There are multiple different health complications including cavities and diabetes that have been linked to an increased consumption of sugary drinks. This tax policy is being used in over 40 countries around the world and then several different cities within the United States (Powell). Looking at data internationally as well as in Seattle the evidence shows a decrease in sales of sugar sweetened beverages especially when it comes to the larger sizes of these beverages where the tax is more pronounced because the tax is done per oz. The study that was done by Powell and Leider show that on average when Seattle who has the beverage tax was compared to Portland who does not have the beverage tax the sales fell by about 20% for beverages that were taxed. When thinking about this keep in mind that not all sweetened beverages are taxed the beverages to in order to be taxed must meet a certain threshold. Over the same time period the study also looked at the amount that each of the beverages went up in cost and the Seattle areas beverages went up more in cost than the Portland ones did by a comparatively significant amount. In actuality the amount was not that much. The beverages that did not have the tax placed on them in Seattle increased over the same time period in sales amount indicating that people were more willing to choose other beverages that did not see the tax and corresponding price increases. There is not enough data at the time of this study to indicate whether cross-border shopping was being affected with the increase in taxes. Looking at other states who have had the sales tax for longer indicate that there is an increase in cross-border shopping for people that truly want their sugary drinks at a reduced cost. This increase in tax revenue is supposed to support healthy food options and access as well as child health readiness and development in schools. Unfortunately, in Washington state all major state tax revenue is deposited into the general fund since Washington is a general fund state and then is allocated from there.
The secondary evaluative criteria of ethics starts to come into play with this tax because the tax is meant to duce the amount of sugary drinks that people drink on a regular basis in order to increase their health. Where ethics comes into play of this is what role does the federal government have to decide on the health of its citizens. If a person wants to increase their chance of cavities as well as obesity and diabetes that is that person's right and choice not the federal government or the state government or the local governments to choose for them.
When looking at cross-border shopping the consumer has to weigh the difference of the price of the extra travel time and the costs associated with that versus the cost of just paying the increase for the sugary desire to drink. Looking at the primary evaluative criteria of effectiveness criteria starts to play in here when looking at cross-border shopping especially when it comes to Seattle specifically. The sweetened beverage tax only applies to the city of Seattle itself not the entire Seattle metropolitan area. Depending on where the residents reside it could be quite easy for them to drive a couple of blocks and be outside of the affected area of the tax and still be able to get the sugary and sweetened drinks at a reduced price thus reducing the overall effectiveness of this tax but still hurting the businesses that it affects.
The administrative feasibility of the tax as well as the fairness feasibility of the tax are both quite straightforward. About 4% of the tax revenue goes to the administrative burden and maintaining the tax itself meaning that most of the tax revenue is available to go to the program stated. As far as the criteria for fairness goes, everyone that wants to buy a sugary sweetened beverage in the city of Seattle gets to buy the same exact beverages for the same price. Any distributor that is going to sell within the city of Seattle is going to be subject to the same tax providing their beverages meet that criteria if they don't want to be subject to that tax they either need to change their beverage so it doesn't does not meet that criteria or not sell in the city of Seattle. Overall, as far as taxes go this is quite a fair tax there are no different tiers or other levels the different people have to meet.
An alternative or change in order to improve the effectiveness of this tax would be to incorporate more of the Seattle metropolitan area and possibly even the state of Washington instead of just the city of Seattle itself. This would reduce the cross-border purchases of sweetened beverages as well as increase the overall tax revenue. An alternative to this tax when it comes to the ethics criteria dilemma could be to increase education on the risks of drinking an increased amount of sweetened sugary drinks instead of increasing the tax on them to discourage people from drinking them. A dedicated educational campaign to the risks and drawbacks of them has the potential to have a similar effect as the tax but not have the drawbacks of the government in some form influencing the health of their citizens directly in a monetary fashion. Recent studies suggest that having graphic warnings on the packaging as well as an increase in overall education of the risks has a more substantial effect on health and reduction of sugary drink consumption then this type of tax does (Henriquez). The tobacco industry saw the effects of this in both plain packaging and in the education on the risks of smoking with a significant decline in overall smokers within the United States. Another potential solution instead of taxing the drinks is to limit the buy one get one free type of sales that are often done on sugary beverages.
Henriquez, E. (2022, March 7). Beyond sugar taxes: Alternative approaches to sugar... Euromonitor. https://www.euromonitor.com/article/beyond-sugar-taxes-alternative-approaches-to-sugar-reduction-in-global-soft-drinks
Powell, L. M., & Leider, J. (2021). Impact of a sugar-sweetened beverage tax two-year post-tax implementation in Seattle, Washington, United States. Journal of Public Health Policy, 42(4), 574–588. https://doi.org/10.1057/s41271-021-00308-8
Sweetened beverage tax - seattle.gov. City of Seattle . (2019). https://www.seattle.gov/Documents/Departments/SweetenedBeverageTaxCommAdvisoryBoard/FactSheets/SweetenedBeverageTax_FactSheet_2019.pdf
Policyalternative_Richard.docx
Policy Alternatives
An integral aspect of policy analysis lies in grasping the evaluative criteria to ensure comprehensive understanding of a policy's key components. Among its myriad benefits, the evaluative criteria guarantee replicable results in policy assessments. This advantage becomes particularly evident in contentious policy domains, such as in the complex landscape of retirement policy that is marked by copious amendments and proposed policy changes.
Article Choice
An article by Marr et al. (2013) aptly captures the complexity of policies surrounding retirement in the United States, particularly with regard to retirement tax incentives, making it an ideal reference for understanding the nuances of the retirement system enabled by the tax law provisions of the Internal Revenue Code of 1986 that legislated the retirement plans in use today.
Article Key Points Summary
Despite their pivotal role in shaping a nation's welfare and well-being, retirement policy provisions pose intricate and divisive challenges. Tax incentives which are inseparably linked to this policy, serve as corresponding tools, encouraging individuals and corporations to save diligently for the post-workforce period. Marr et al. (2013) note that retirement tax incentives, such as those associated with IRAs and pensions, represent some of the largest federal tax expenditures for the American population. However, despite an annual cost exceeding $100 billion, the authors argue that these incentives provide limited actual encouragement. This observation gains significance when considering that these subsidies disproportionately benefit wealthier households, with the top 20 percent receiving nearly twice as much in retirement tax subsidies as the bottom 80 percent combined. Moreover, the authors also note that contribution limits also disproportionately benefit individuals in higher tax brackets, as they receive higher subsidies for their contributions. This aligns with evidence suggesting that low-income households are among the least prepared for retirement, given, among other factors, their limited existing savings and often living from paycheck to paycheck.
Analyzing Article Points: Selecting Three Evaluative Criteria
Evaluative criteria serve as a structured framework for appraising the success or failure of a policy, facilitating a thorough objective assessment. In this light, Marr et al.'s (2013) article on retirement policy can be examined through three primary evaluative criteria: effectiveness, efficiency, and fairness.
Effectiveness:
Right from the outset, Marr et al.'s (2013) article asserts the gross ineffectiveness of the policies that govern and codify retirement tax incentives. It argues that despite being mostly intended for individuals in lower tax brackets, who may lack savings or healthcare insurance post-retirement, these incentives demonstrably fail, rendering them grossly ineffective. This prompts critical questions regarding the genuine impact and reach of these incentives in realizing their intended objectives.
Efficiency:
Marr et al.'s (2013) note that retirement tax incentives, such as those associated with IRAs and pensions, represent some of the largest federal tax expenditures for the American population. Despite an annual cost exceeding $100 billion, the authors argue that these incentives provide limited actual retirement-saving encouragement, which was the primary goal of the provisions that facilitate these incentives. According to estimates by the Congressional Budget Office (CBO) for the period 2014-2023, tax breaks for retirement contributions and earnings are projected to be the second-largest tax expenditure, totaling $2 trillion. This speaks to an outrageously high level of inefficiency of the retirement tax incentives and the policies they are entrenched in.
Fairness:
Billions of dollars allocated to retirement tax incentives as subsidies have limited impact on the poorer segments of society. Marr et al.'s (2013) article contends that the top 20 percent of households receive almost double the retirement tax subsidies compared to the combined total for the bottom 80 percent. This stark disparity reinforces that the policy is quite unfair especially considering that these incentives are primarily aimed at lower-income households.
Examining Policy Alternatives
Recognizing the financial hurdles confronting individuals in lower tax brackets—those most adversely affected by the fluctuation or absence of paychecks—underscores the urgent need for retirement plans and policies specifically designed for the majority of the workforce. This demographic, often living paycheck to paycheck, unfortunately constitutes a substantial portion of the growing contingent worker population, as posited by Gale et al. (2020). The authors emphasize that the existing retirement policy and concurrent employer-focused retirement system was not devised with contingent and low-wage workers in mind, leaving much to be desired. In response to this, especially for contingent workers who typically fall into the lower tax bracket, the authors propose several crucial measures. The central recommendation involves the enhancement of tax benefits, with a particular focus on refining the Retirement Savings Contribution Credit commonly known as the saver's credit. The authors underscore the potential impact of modifying this credit, emphasizing its crucial role in aiding low and moderate-income households. By tailoring the saver’s credit to better suit the financial circumstances of these demographics, it becomes a strategic tool for encouraging and facilitating retirement savings. This could be done, for example, by making the credit refundable, and having it directly deposited into the individual’s retirement account.
This targeted approach acknowledges the specific needs of those in lower income brackets and aims to create a more inclusive and effective system for fostering long-term financial security. In addition to the emphasis on tax benefits, another critical suggestion involves the restructuring of policies to enable spouses to contribute fully to a retirement account irrespective of their marital status (Gale et al., 2020). This adjustment is seen as a significant step in assisting low-income families to save more effectively for retirement. Currently, limitations arise if one spouse has an employer-sponsored retirement plan, effectively curtailing deductions. By restructuring these policies, the aim is to remove barriers and ensure that both spouses, regardless of marital status, can contribute fully to their retirement accounts. This would not only promote financial equity but also enhance the ability of families with lower incomes to accumulate meaningful savings for their retirement years, thus enhancing the effectiveness, efficiency, and fairness of the existing retirement policy.
References
Gale, W. G., Holmes, S. E., & John, D. C. (2020). Retirement plans for contingent workers: issues and options. Journal of Pension Economics & Finance, 19(2), 185-197.
Marr, C., Frentz, N., & Huang, C. C. (2013). Retirement Tax Incentives Are Ripe for Reform. Center on Budget and Policy Priorities, 1-9.