Taxing sugary drinks in America’s cities could save and extend the lives of millions of Americans while averting vast sums in health costs and raising millions of dollars for local communities, according to an analysis of six adopted and 15 theoretical taxes in America’s largest cities.
After ten years, a tax of one cent per ounce in those 21 jurisdictions would reach 23.5 million people with health benefits including declining rates of diabetes, nearly 60,000 fewer cases of obesity, nearly 4,000 fewer premature deaths, and avoided health care costs of over $1.2 billion. The sugary drink levies would raise nearly $1 billion each year for investment in improving communities and promoting health, according to the report, “Raising revenue, cutting costs, saving lives: The benefits of sugary drink taxes in America’s major cities.”
“This has been a watershed year for efforts to tax sugary drinks as the health hazard they represent,” noted our executive director Jim Krieger.
In 2016, five U.S. cities – Philadelphia, Boulder, San Francisco, Oakland, and Albany, CA – and Cook County (Chicago), IL have adopted soda taxes as a way to raise revenue for important community priorities while encouraging residents to shift away from products that contribute to diabetes, heart disease and other chronic health issues. They join Berkeley, CA, whose voters in 2014 became the first in the nation to approve a sugary drink tax.
But how great an impact can a city-by-city approach have on the nation’s health? Substantial, as this report will show. HFA asked researchers at Harvard University’s T.H. Chan School of Public Health to use their evidence-based, peer-reviewed computer model to evaluate the impact should 15 more of the nation’s largest cities (with legal authority to do so) adopt a sugary drinks tax of one cent per ounce. The researchers – who operate independently of HFA – also projected benefits for the six jurisdiction that passed taxes this year. (Find the results for each city here.)
“By following the example of the seven that have already acted,” Krieger said, “cities have a golden opportunity to help their people avoid premature death and illness and cut health costs while raising revenue to make residents’ lives better in other ways, as well.”
To examine the potential health impact of the three proposed sugary drink taxes, researchers for Harvard’s CHOICES project localized their national computer simulation to project impacts in each city. The 15 cities chosen for analysis are: Baltimore, Charlotte, Columbus, Denver, Detroit, Indianapolis, Jacksonville, Las Vegas, Los Angeles, Louisville, Oklahoma City, Phoenix, San Diego, San Jose and Seattle.
The researchers project that the tax of one cent per ounce would raise prices on sugary drinks by 16.3 percent, leading many consumers to shift to water or other, less harmful drinks, so that soda consumption drops by nearly 20 percent. (Berkeley, where a tax has been in effect since early 2015, saw a 21 percent reduction among low-income communities.)
As a result of that shift, and adding the projected health gains for the six places with existing taxes to those of the 15 cities above, we would see:
- 23.5 million people benefit (roughly equivalent to the population of Australia);
- Health care savings of well over $1.2 billion over ten years;
- Nearly $1 billion a year in revenue to help prevent disease and improve life chances for people of all backgrounds;
- 3,683 premature deaths averted;
- The rate of new cases of diabetes would drop an average 6 percent after the tax reaches full effect;
- 173,220 fewer cases of obesity, and longer lives, unburdened by preventable disease, for tens of thousands of Americans.
The full CHOICES briefs can be found here.
“Our analysis looks beyond revenue and finds that this excise tax on sugary drinks can generate significant prevention of new cases of obesity, diabetes, improved quality adjusted life years and healthcare cost savings,” said lead investigator of the CHOICES Project, Dr. Steven Gortmaker, a professor of the practice of health sociology at the Chan School of Public Health. “It is our intent that these findings serve as a source of research-based information surrounding potential health impacts of sugar-sweetened beverage taxes.”