Soda Taxes: The Secret Weapon for Health?

Soda represents a significant concern due to its high sugar content, which contributes to a range of adverse health outcomes such as obesity and diabetes. This applies similarly to other sugar-laden beverages.

These drinks offer minimal nutritional value, and their liquid form facilitates rapid absorption of sugar into the bloodstream, exacerbating health risks. Across various nations, policymakers have responded by implementing taxes on sugary beverages to promote public health.

According to the World Health Organization, 108 countries have imposed taxes on some sugar-sweetened beverages. At the same time, in the U.S., at least eight jurisdictions have implemented soda taxes, although no statewide policies are in place.

Revenue from sugary drink taxes is often earmarked for health initiatives, though in some cases, it has been used to cover budget shortfalls or for other purposes.

According to the American Diabetes Association, diabetes cost the U.S. $327 billion in 2017, while obesity costs $147 billion. Supporters argue that the tax can help prevent these diseases and reduce future health costs.

A recent study published in JAMA Health Forum suggests that soda taxes implemented in five U.S. cities have led to a notable decrease in purchases of sugar-sweetened beverages, potentially benefiting population health.

The analysis, conducted by researchers including lead author Scott Kaplan from the U.S. Naval Academy, examined changes in prices and purchases of sugary drinks in Boulder, Colorado; Philadelphia; Oakland, California; San Francisco; and Seattle from 2012 to 2020.

The study found that prices of sugary drinks increased by an average of 33% across these cities in the two years following tax implementation, with a rise of 1.3 cents per ounce. During the same period, the consumption of sugary drinks decreased by 33%.

The findings align with existing research suggesting that sugary drinks contribute to health problems like obesity, diabetes, and heart disease and that taxes on these beverages can help prevent such issues and lead to cost savings.

New Findings Suggest That Taxes On Sugary Drinks Continue To Have Lasting And Positive Effects.

Using Nielsen retail scanner data, encompassing sales from supermarkets, mass merchandise stores, and other retail outlets, the researchers found significant results two years post-tax implementation:

  • Taxed beverage prices increased by 1.04 cents per ounce, with a corresponding 59% pass-through rate.
  • The sales volume of taxed beverages decreased by 22%, with no evidence of cross-border shopping.
  • The tax led to a 23% reduction in grams of sugar sold from taxed beverages after one and two years. Despite some offset from substitutions, such as increased sugar sales from sweets and initially untaxed beverages, there was a net 19% reduction in grams of sugar sold from taxed beverages two years post-tax.

These findings indicate that these taxes have a sustained impact on reducing both the volume and grams of sugar sold from sugary beverages, even after considering potential substitution behaviors.

This suggests a potential long-term decrease in demand for sugary beverages and a corresponding reduction in associated health risks.