Should sugar-sweetened beverages be taxed?

Sep 21, 2009 11:23 AM

Not many people want to entertain the thought of new taxes during tough economic times (in truth, many of us don't like the idea in the best of times either). But a group of public health experts make a persuasive case for one in a recent issue of the New England Journal of Medicine.

They recommend putting a tax on sodas, energy drinks, and other beverages with added sugar (diet drinks would be exempt). They argue that such a tax would help curtail Americans' consumption of sugar-sweetened drinks, while raising funds to promote good nutrition, and help cover health costs related to regularly imbibing these beverages.

Americans' demand for sugary drinks has doubled in the last 30 years, and recent studies have linked consumption of these calorie-infused beverages to a higher risk of obesity, diabetes, and heart disease— conditions that exact a huge toll on individuals, families, and the health care system overall. Medical costs associated with being overweight or obese alone are estimated at $147 billion (9.1 percent of total U.S. health care expenditures), with Medicare and Medicaid picking up half of this tab. These are complex public health issues with many causes and no easy solutions. But might taxing sugary drinks help?

This isn't exactly a new idea, as many states already charge sales tax on soft drinks. But these taxes are too small to make much difference, say the authors. Also, since sales tax is added at checkout and not displayed on a beverage's shelf price, most people don't realize they're paying more.

Instead of a sales tax, the authors propose a tax of 1 cent per fluid ounce on sugar-added beverages. The tax would be charged to producers and manufacturers, who would then pass it onto retailers. The levy would boost the price of a 20-ounce soft drink by 15 percent to 20 percent. To gauge how this would affect consumption of these drinks, the authors looked at previous research on consumers' reactions to price hikes. They estimate that the tax would lead to at least a 10 percent decline in calorie consumption from sweetened beverages, for an average drop of 20 kilocalories (kcal) per person per day. Such a reduction would be sufficient for some weight loss, they say, and also for reducing related health risks. The tax would also raise an estimated $14.9 billion in revenue in the first year, which could be used to promote good nutrition, and also help pay for some health care costs.

What you need to know. Taxing sugar-sweetened beverages could help curb rising obesity rates and related health risks, say the authors. But getting approval for a tax on sugary drinks may not be easy. Indeed, the beverage industry is already mobilizing against such a levy, as soda taxes have also been proposed as a way to help fund health care reform (although no provision was included in the Senate proposal recently released). Nonetheless, surveys do show that consumer support for such taxes is growing, say the authors. For example, in a recent poll of New York state residents, 72 percent said they'd support a tax on soda if the revenue was used to fund programs for preventing of obesity in children and adults.

But what about you? Would you be for or against such a tax? And what do you think about taxes that aim to influence behavior in general (another example is the cigarette tax)? You can share your thoughts below.

—Sophie Ramsey, patient editor, BMJ Group

ConsumerReportsHealth.org has partnered with The BMJ Group (British Medical Journal) to monitor the latest medical research and assess the evidence to help you decide which news you should use.

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