Do Soda Taxes Make Us Healthier?
Obesity is a huge public health concern and research from Centers for Disease Control and Prevention says the United States contains an adult population of nearly 40 percent that qualify as medically obese. This adds $147 billion to the nation’s annual healthcare spending.
Organizations such as the American Heart Association and the American Academy of Pediatrics see Soda taxes as low-hanging fruit in the battle against obesity and the health problems such as diabetes that often come with it. The blame can be spread to many areas and the problem is a bit more nuanced, but the widespread consumption of foods with added sugars plays a major part in it and beverages cover 50% of the added sugar in the American diet.
“It’s really hard to shift these behaviors, and taxes are, if not the single most, one of the most impactful and important policies to move the needle on unhealthy eating habits,” says Christina Roberto, a behavioral scientist at the University of Pennsylvania in Philadelphia. Taxes have helped to reduce the public health impact of alcohol and tobacco, and many public health researchers say there’s good reason to think they can mitigate the harms of sugary beverages, too.
The use of taxes to compel people to make healthier choices has a long history with tobacco and alcohol, which are taxed by nearly every country in the world. “There’s decades of work now on tobacco, hundreds of studies from around the world, showing that if you raise prices you induce adults to quit smoking and prevent kids from taking it up,” says Frank Chaloupka, an economist at the University of Illinois at Chicago.
Research has linked higher cigarette taxes to reduced mortality from throat and lung cancer and other respiratory diseases. Other studies have linked higher taxes to lower rates of hospitalization for heart failure and lessened severity of childhood asthma.
There’s strong evidence tying sweetened beverages to a host of chronic health problems, says Barry Popkin, an economist and nutrition researcher at the University of North Carolina, Chapel Hill. Sweetened drinks cause spikes in blood sugar and over time, that could disrupt the body’s insulin regulation. Additionally sugar dissolved in a drink doesn’t trigger the brain’s mechanisms the same way solid food does so as a result, “what we’ve learned in the last 20 years is that what you drink doesn’t affect what you eat,” Popkin says.
Studies by Popkin and others have linked habitual consumption of sweetened beverages to an elevated risk of weight gain, obesity, type 2 diabetes, cardiovascular disease and other health problems. A 2010 meta-analysis of previous studies that tracked a total of 310,819 participants, for example, found that people who drink one or more sugary drinks a day have a 26 percent higher risk of developing type 2 diabetes than those who drink no more than one sugary drink per month.
This research has focused on beverages containing calorie-adding sweeteners such as sucrose (table sugar) and high fructose corn syrup — not just sodas but also sports and energy drinks, fruit juices with added sugar, and sweetened coffee and teas.
"Sugary beverages certainly aren’t the only culprits. Sugary foods are, too, but they’re more difficult to define and regulate", says Kristine Madsen, a pediatrician and research scientist at the University of California, Berkeley School of Public Health.
“If you start getting into foods that could be classified as junk food you get into huge debates,” she says. Take granola bars. Some are loaded with fat and sugar — essentially cookies masquerading as health foods. Others might be packed with nuts and dried fruit and contain little added sugar, making them legitimate sources of protein and dietary fiber. But a typical beverage with added sugar has no nutritional value, Madsen says. “There’s nothing it adds to someone’s diet that benefits them.”
The idea behind sugary-beverage taxes is rooted in basic economics: Raising the price on a product tends to discourage people from buying it, especially if it’s not something they deem essential in the first place. One encouraging sign for soda taxes, Chaloupka says, is that economists find that the price elasticity for sugary beverages — that is, the degree to which people respond to price increases by reducing their purchases — is at least as great as it is for alcohol and tobacco.
A few countries, including the United Kingdom and South Africa, have implemented tiered or graded beverage taxes that increase with sugar content. The impact on sales, not to mention public health, remains to be seen.
In the US, beverage taxes range from 1 to 2 cents an ounce. Structuring a tax this way makes it easy to implement, but it means that the percentage of the price increase varies for different products. Researchers who support the taxes acknowledge that taxes will not eliminate soda drinkers, but those aren’t the people at greatest risk. The hope is that taxes will make a dent in consumption by people with more serious habits like the 5 percent of Americans who report drinking roughly 600 calories worth of sugary beverages (more than four 12-oz cans) on any given day.
The seven US cities with beverage taxes currently raise a total of $133 million per year. Although not all of those taxes were passed as public health measures, most of the revenue goes to improve community welfare in some way.
In Philadelphia, the tax was passed as a means to raise money to expand early childhood education. In Berkeley, the money has gone to local organizations that promote nutritional education and exercise, including programs to build kitchen gardens at middle schools to teach children about food and nutrition.
In Seattle, which implemented a 1.75-cent-per-ounce soda tax in 2018, the revenue has been used for a variety of programs aimed at improving health equality, such as subsidizing fruit and vegetable purchases for low-income people, says Jim Krieger. Partly as a result of targeted marketing by beverage companies, Krieger says, low-income communities have higher rates of sugary-beverage consumption and higher rates of disease associated with those drinks. “The tax revenue is being invested where it will do the most good in relation to the harms being caused by the sugary drinks.”
In 2016, the beverage industry spent $30 million in California alone to oppose new ballot measures to impose beverage taxes in Oakland and San Francisco (both passed). Industry-funded ads present the taxes as attacks on consumer freedom, unfairly burdensome to low-income people, and bad for employment and the overall economy. Studies by independent researchers in Philadelphia and Mexico have found little or no evidence for negative economic impacts.
Public health researchers see the taxes as just one part of a larger strategy to tackle obesity and diabetes. Several countries are trying a more comprehensive policy approach. In addition to new policies, what has to happen is a cultural shift, says Laura Schmidt, public health researcher at the University of California, San Francisco. “With tobacco, the number one thing that made the difference was norms,” she says. “The policies and the debate and the education campaigns made smoking unpopular.”
The US is already starting to see a shift, where consumption of added-sugar beverages has been declining since 2000. One study, based on nationally representative data from the CDC, found that the proportion of American adults who reported drinking at least one sugary beverage a day dropped from 62 percent to 50 percent between 2003 and 2014 (and from 80 percent to 61 percent for children).
With soda taxes and other policies, advocates say, that decline could develop into significant health benefits in the years ahead. And as public perception shifts, lawmakers will feel emboldened to pass more aggressive policies, Schmidt says. “It’s a virtuous cycle.”