A 40% tax on all sugar-sweetened beverages could cut consumption enough to result in a slight weight loss, especially among people who live in middle-income households, and could raise up to $2.5 billion in tax revenue, according to a study published Dec. 13 in Archives of Internal Medicine.
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A tax on sugar-sweetened beverages could result in less consumption, which could lead to a weight loss among consumers of the drinks. Revenue generated from the tax could be used to pay for obesity prevention efforts.
Such a tax could reduce beverage purchases enough to eliminate an average 12 kcal/day from an average consumer’s diet, resulting in weight loss of about 1.5 pounds/year (Arch. Intern. Med. 2010;170:2028-34).
"Large taxes on sugar-sweetened beverages are likely to be effective at positively influencing weight outcomes, especially among middle-income households," wrote Eric A. Finkelstein, Ph.D., of the Duke–National University of Singapore Graduate Medical School, and his associates. "These taxes would also generate substantial revenue that could be used to fund obesity prevention efforts or for other causes."
The authors used data from the 2006 Nielsen Homescan panel, in which a national sample of households scanned and transmitted their store-bought food and beverage purchases weekly for 12 months. To predict the effects of 20% and 40% taxes on sugar-sweetened beverage purchases, they analyzed price changes and their effects on monthly purchases.
Larger taxes that include all sugar-sweetened beverages would have a greater effect on purchases than a smaller tax on only carbonated soda, they found.
For example, a 20% tax on only sugar-sweetened sodas would reduce purchases of beverages, for an average drop of about 4 kcal/day per capita. Meanwhile, a 40% tax on all sugar-sweetened beverages would cut daily consumption by more than 17 kcal, but because consumers would make up some of those calories from other types of beverages, overall calories from all beverages would drop by about 12 kcal, the investigators found.
Taxing all sugar-sweetened beverages, including carbonated sodas, sports/energy drinks, and fruit drinks, would produce weight-loss results that are 60% greater than those produced by a tax on soda alone, the investigators wrote. "This happens because the expanded tax makes it more difficult to substitute similar products in efforts to avoid the price increase," they wrote.
People who live in households with the lowest level of income drank the most sugar-sweetened beverages, but people in middle-income families would feel the effects of such a tax more acutely because they consume less soda, which tends to be less expensive, and more sports/energy and fruit drinks, which tend to cost more, the investigators found.
A 40% tax on all sugar-sweetened beverages would increase food expenditures by only about $30 per household, per year, the study said. Across all households, a 40% sales tax on sugar-sweetened beverages would produce about $2.5 billion annually, while a 20% tax would raise about $1.5 billion. "If this revenue were used directly for obesity prevention efforts, this could indirectly increase the effectiveness of targeted beverage taxes," the authors wrote.
The study was supported by the Robert Wood Johnson Foundation. The authors said they had no relevant financial disclosures.