Sugar Tax: Overview
The Sugar Tax is a public health initiative implemented in various jurisdictions to combat rising obesity rates and associated health issues linked to the consumption of sugar-sweetened beverages. With obesity and overweight statistics escalating globally, health experts have identified excessive intake of these beverages—such as soda and energy drinks—as a key factor contributing to this epidemic. In response, some cities and countries have introduced taxes on these drinks, aiming to decrease consumption and generate funds for health education and community programs. Proponents argue that such taxes can effectively incentivize healthier choices among consumers, while critics contend that they disproportionately target sugar-sweetened beverages without addressing the broader spectrum of unhealthy dietary habits. As of the early 2020s, numerous U.S. cities have adopted similar measures, and there is ongoing debate regarding their effectiveness and economic impact. Studies present conflicting evidence, with some indicating reduced consumption in taxed areas, while others suggest consumers simply shift their purchasing behavior to neighboring regions. Despite the controversies, recent findings suggest that these taxes could yield significant public health benefits, prompting renewed discussions about potential nationwide implementation.
Sugar Tax: Overview
Introduction
In the late twentieth and early twenty-first centuries, overweight and obesity rates in adults and children rose steadily in the United States and many other parts of the world. This brought growing concerns of a major public health crisis, as numerous studies have linked obesity to negative health outcomes such as heart disease and diabetes as well as broader socioeconomic burdens such as higher health care costs. In addressing the issue, many experts have pointed to excessive consumption of sugar-sweetened beverages such as soda, sports drinks, and energy drinks as a significant contributor to the obesity epidemic.
As a result, some jurisdictions, including several US cities, have instituted a tax on the purchase of sugar-sweetened beverages, hoping to both reduce consumption and raise funds for public health education. These measures are sometimes known as a sugar tax, a soda tax, a sweetened-beverage tax, or a sugary drinks tax. Proponents believe that taxing sugar-sweetened beverages will motivate people to change their unhealthy habits, and that these changes will benefit public health by reducing obesity. Detractors believe that such taxes are ineffective and unreasonably single out sugar-sweetened beverages from a much larger list of unhealthy consumption habits that contribute to obesity.
Understanding the Discussion
Artificial sweeteners: Chemical additives with few or no calories that are sometimes used in place of sugar to sweeten foods and beverages.
Body mass index (BMI): A formula used by the US Centers for Disease Control and Prevention (CDC) to determine whether a person falls into a healthy weight range for their height.
Obese: Defined by the CDC as having a body mass index (BMI) of 30 or higher.
Overweight: Defined by the CDC as having a body mass index (BMI) between 25 and 30.
Sugar-sweetened beverages: Any beverage that contains added sugar, including many sodas, energy drinks, and sports drinks.
History
For years, the World Health Organization (WHO) and other groups have expressed concern that obesity rates are on the rise across the world, particularly in children. In 2014, more than 600 million adults worldwide were obese and 42 million children under the age of five were overweight or obese—more than double those statistics than in 1980. By 2020, over 41 percent of US adults qualified as obese, according to the US Centers for Disease Control (CDC). Numerous studies have concluded that obesity carries increased risks of heart disease, diabetes, and other chronic health conditions. As a result, many economists believe that increasing obesity rates contribute significantly to rising health care costs in the United States.
Public health experts argue that the consumption of excess sugar is a significant culprit in the global weight-gain epidemic. In particular, many point to the increase in consumption of sugar-sweetened beverages as a major contributor to weight gain in both adults and children. Studies show dramatic increase in portion sizes over time. Prior the 1950s, the average soft drink serving was 6.5 ounces; in the 1960s, the 12-ounce soda can became ubiquitous; and by the early 1990s, it was common to purchase soft drinks in a 20-ounce plastic bottle. According to a study published in the American Journal of Preventive Medicine, in the 1970s, sugar-sweetened beverages accounted for about 4 percent of the daily calorie intake in the United States. By 2001, this had risen to 9 percent.
Governments have attempted to influence individuals' consumption of other unhealthy products like tobacco and alcohol through taxation for decades. Studies show that taxing these items can effectively reduce their consumption: A literature review conducted by the Rudd Center for Food Policy and Obesity at Yale University found that, for roughly every 10 percent increase in price, consumption decreased by 7.8 percent. But governments have often argued that it is not their role to tax food in this way, despite evidence that overconsumption of specific foods may be connected to poor health outcomes.
Over the years, national and local governments have tried various non-taxation approaches to reduce individuals' consumption of sugar-sweetened beverages. These include revising food labels to make it easier to see how much sugar a food or beverage contains; placing restrictions on how foods and beverages containing added sugar can be marketed, especially to children; and restricting the availability of these foods in school cafeterias and vending machines. These measures have had varying degrees of success in changing consumption patterns, but obesity rates continue to rise.
By the early 2010s, some countries such as Mexico and Great Britain started exploring taxation of sugar-sweetened beverages as a way to discourage people from consuming these items in large quantities. Increasingly, state and local governments in the United States began exploring this option as well. The first US city to implement such a measure was Berkeley, California, with a penny-per-ounce tax on sugar-sweetened beverages passed in 2014 and implemented in 2015. In practical terms, this amounted to an increase of approximately 12 cents per can of soda and 68 cents per two-liter bottle of soda. The money raised from the tax was directed to health programs for children in the city.
The Berkeley tax drew heavy debate and fierce campaigning from both supporters and opponents. After the law went into effect, experts continued to debate whether the tax successfully reduced consumption or merely shifted people's purchasing and consumption patterns. For example, a study conducted by Lynn Silver of the Public Health Institute and colleagues found that soda sales in Berkeley dropped by 9.6 percent in the year after the tax was implemented. However, the same study found that soda sales in surrounding cities rose by 6.9 percent, leaving some to question whether the tax actually decreased soda consumption, or whether people were simply traveling elsewhere to buy it.
Sugar Tax Today
Following Berkeley's introduction of a sugar-sweetened beverage tax in 2015, several more US cities passed similar legislation. Philadelphia, Pennsylvania, voted in favor of a similar tax in 2016, and it became effective in January 2017. In this case, the city placed a tax of 1.5 cents per fluid ounce of soda, which amounted to a tax of approximately 18 cents for a typical 12-ounce can of soda, or about one dollar for a 2-liter bottle of soda. (Notably, Philadelphia's tax also included diet soda and other beverages that use artificial sweeteners rather than sugar.) Other jurisdictions to implement taxes on sugary beverages included Boulder, Colorado; San Francisco, Oakland, and Albany, California; and Cook County, Illinois. In June 2017, Seattle, Washington, approved a tax on sugar-sweetened beverages of 1.75 cents per ounce. The money collected was earmarked for community programs that promote access to healthy foods and address racial disparities in the city's education system. The city also intended to set aside funds for job skill retraining for workers whose jobs might be impacted by economic changes resulting from the new tax.
Not all efforts to establish such taxes were successful, however. For instance, in May 2017 a ballot measure for a sugar tax was defeated in Santa Fe, New Mexico. Meanwhile, some states, including Illinois and Massachusetts, considered imposing statewide taxes on sugar-sweetened beverages to prevent the development of a city-by-city patchwork of regulations. These larger-scale efforts drew significant controversy and debate.
Sugar taxation has caused a significant backlash among beverage companies and their lobbying groups. Groups such as the American Beverage Association and the Pennsylvania Food Merchants Association claim that such taxes are highly damaging to the beverage industry and local economies. They have promoted research suggesting that in addition to negative economic impact, sugar taxes are ineffective in combating obesity. In 2017, these organizations filed a lawsuit in Pennsylvania state court to have the Philadelphia sugar tax invalidated on the grounds that it created a conflict with the state's sales tax. The Pennsylvania Supreme Court upheld the law in 2018, however.
There was a new wave of interest in sweetened-beverages taxes in the early 2020s, largely driven by emerging data on the effects of earlier city taxes. Supporters argued that there was growing evidence that sugar taxes did lead to lower consumption of sugary drinks and were economically feasible. For example, a study by University of Washington researchers published in 2022 found that the sugar taxes in San Francisco, Seattle, and Philadelphia were economically beneficial to lower-income households. This bolstered calls for statewide or even nationwide taxation of sweetened beverages. One study released in 2020 projected that a nationwide sugar tax based on beverage volume alone would prevent 1.12 million US cases of cardiovascular disease and diabetes and save an estimated $53.2 billion, while a tiered tax based on sugar content per ounce would prevent approximately 2.2 million cases and save $105 billion. In 2022 the World Health Organization (WHO) released suggested guidelines for taxing sugar-sweetened beverages, calling on national governments to use such measures to improve public health.
Nevertheless, opponents of sugar taxes continued to cite evidence of their own. For example, a 2022 study from the University of Georgia on Philadelphia's tax found that the local decline in sales of sugary drinks was entirely offset by increased purchases in surrounding towns, and sales of other sugary foods increased in Philadelphia itself. Many experts also continued to argue that lower-income people were most negatively affected by sugar taxes.
These essays and any opinions, information, or representations contained therein are the creation of the particular author and do not necessarily reflect the opinion of EBSCO Information Services.
Bibliography
Aubrey, Allison. "Judges Take Up Big Soda's Suit to Abolish Philadelphia's Sugar Tax." National Public Radio, 5 Apr. 2017, www.npr.org/sections/thesalt/2017/04/05/522626223/judges-take-up-big-sodas-suit-to-abolish-philadelphias-sugar-tax. Accessed 22 June 2017.
Beeson, Leigh. "City-Based Soda Pop Taxes Don't Effectively Reduce Sugar Consumption." UGA Today, 6 Sept. 2022, news.uga.edu/soda-pop-taxes-dont-reduce-sugar-consumption/. Accessed 30 Oct. 2023.
Charles, Dan. "US Soda Taxes Work, Studies Suggest—But Maybe Not As Well As Hoped." NPR, 21 Feb. 2019, www.npr.org/sections/thesalt/2019/02/21/696709717/u-s-soda-taxes-work-studies-suggest-but-maybe-not-as-well-as-hoped. Accessed 30 Oct. 2023.
Grubs, Matt. "Sugar Tax Fails." Santa Fe Reporter, 2 May 2017, www.sfreporter.com/santafe/article-13366-sugar-tax-fails.html. Accessed 22 June 2017.
Howards, Jacqueline. "Taxing Sugar Levels in Soda Could Prevent 2 Million US Cases of Diabetes and Cardiovascular Disease, Study Says." CNN, 22 June 2020, www.cnn.com/2020/06/22/health/soda-tax-sugar-content-wellness/index.html. Accessed 30 Oct. 2023.
Kirschman, Lauren. "Sweetened Beverage Taxes Produce Net Economic Benefits for Lower-Income Communities." University of Washington, 8 July 2022, www.washington.edu/news/2022/07/08/sweetened-beverage-taxes-produce-net-economic-benefits-for-lower-income-communities/. Accessed 30 Oct. 2023.
Lee, Bruce Y. "5 More Locations Pass Soda Taxes: What's Next for Big Soda?" Forbes, 14 Nov. 2016, www.forbes.com/sites/brucelee/2016/11/14/5-more-locations-pass-soda-taxes-whats-next-for-big-soda. Accessed 22 June 2017.
"Sugary Drinks." Harvard T. H. Chan School of Public Health, Aug. 2023, www.hsph.harvard.edu/nutritionsource/healthy-drinks/sugary-drinks/. Accessed 30 Oct. 2023.
Studdert, David M., et al. "Searching for Public Health Law's Sweet Spot: The Regulation of Sugar-Sweetened Beverages." PLoS Medicine, vol. 12, no. 7, July 2015, doi:10.1371/journal.pmed.1001848.
"WHO Calls on Countries to Tax Sugar-Sweetened Beverages to Save Lives." World Health Organization, 13 Dec. 2022, www.who.int/news/item/13-12-2022-who-calls-on-countries-to-tax-sugar-sweetened-beverages-to-save-lives. Accessed 30 Oct. 2023.