Question

Refer to the two articles: 1. “Soda stream: How to tax sugary drinks,”The Economist, May 23rd, 2019. 2. "The price of vice: “Sin” taxes—eg, on tobacco—are less efficient than they look," The Economist, July 28th, 2028. Which of the following sentences is FALSE?

A. The impact of sugar taxes on low income families cannot be offset by using tax revenue for direct cash transfers or for social programs aimed at reducing poverty

B. In the real world, if taxes in one place get too high, shoppers will travel to buy soft drinks elsewhere. That's why after Berkeley introduced its tax, sales of sugary drinks rose by 6.9% in neighboring cities.

C. When a tax on sugary drinks (one cent per ounce) was applied in Berkeley, California in 2015, the sales of sugary there decreased by nearly 10% in a year.

D. A tax on sugary drinks in Mexico in 2014 did lead poorer household to buy fewer sugar-sweetened drink.

Answer 1

Ans.

Correct answer is option A . This statement is FALSE.

A. The impact of sugar taxes on low income families cannot be offset by using tax revenue for direct cash transfers or for social programs aimed at reducing poverty

The impact of sugar taxes on low income families can be offset by using tax revenue for direct cash transfers or for social programs aimed at reducing poverty

All other 3 statements are correct as per the reported articles in the Economist and other media reports in Washington post.