Over the past week, the media have reported plans to raise taxes on consumer products from two sectors that seem different at first glance but are similar in essence. The first is sweetened soft drinks. According to a draft of the Economic Arrangements Bill that accompanies the annual budget, a graduated tax will be imposed on these drinks based on how much damage they do to people’s health. For instance, drinks with a very high amount of sugar will be taxed at a rate of 1.3 shekels ($0.40) per liter, while those with less sugar will be taxed at 70 agorot (21 cents) per liter.
The second tax currently under discussion, which is being pushed by the Environmental Protection Ministry, is on disposable plasticware – plates, cups, silverware and straws. The ministry wants to impose a tax of 100 percent. That would double the price of these nonbiodegradable products, which cause enormous harm to the environment and are also unhealthy when used in large quantities.
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The goal of both taxes is to reduce consumption. The Health Ministry is relying on studies from overseas showing that making soft drinks more expensive reduces their consumption. The Environmental Protection Ministry predicts that its tax would reduce use of disposable plasticware by 40 percent. The logic behind both moves is that the high price of using these products is paid by all Israelis in the currency of either public health or environmental damage, yet these costs aren’t reflected in the products’ market price.
But Israel, which already has one of the highest costs of living of all OECD member states, must not allow this tax money to be diverted to unknown purposes. The state must ensure that at least some of the money raised by collecting these taxes is used to ameliorate the problems they are intended to help solve. The state’s revenues from the sugar tax should be used in part for activities to fight obesity and encourage healthy nutrition, while revenues from the tax on disposable plasticware should be used in part for public relations campaigns about the enormous harm disposable plastic causes the world, in contrast to the negligible benefits derived from its use.
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Using all or part of the tax revenue in this way would recruit the public to support the move. It would thereby become part of an important, comprehensive public relations campaign leading us to a healthier, less polluted country.
The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.