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Sugary Drink TaxesClick ▸ to toggle open and close the Q&A below
Sugary drinks provide no nutritional benefit, and their harms are abundantly clear:
- Scientific evidence now has clearly established that sugary drinks harm health, contributing to our alarming rates of diabetes, obesity, heart and liver disease, and cavities.
- Sugary drinks have no nutritional value but are the #1 source of added sugars in our diet, representing almost half (46%) of all added sugars we consume.
- Sugar delivered in liquid form bypasses the body’s defense against consuming too many calories: sugary drinks don’t make you feel full.
- See our resources on sugar and health for more information
Like other “sin” taxes, sugary drink taxes are meant to raise the price of an unhealthy product to discourage its consumption. In addition to making sugary drinks less affordable, taxes send a message to consumers that they are harmful and should be consumed only occasionally. It can also raise revenue to fund public health efforts to improve diets and prevent diet-related chronic diseases like obesity, diabetes, and heart disease.
See our resource “why tax sugary drinks” for more information
A tax on sugary drinks can help:
- Raise revenue for important programs like healthier food in schools, initiatives to prevent diabetes and other chronic diseases, education campaigns about sugary drinks and healthy eating, expanding pre-K and improving schools, or improving community parks and recreation facilities and encouraging more physical activity.
- Reduce health disparities by targeting investment of revenue in low-income communities disproportionately affected by health conditions caused by sugary drinks.
- Prevent new cases of obesity, diabetes, heart, liver, and dental disease and reduce their related health care costs. See CHOICES reports for more information
- Increase awareness about the harmful effects of sugary drinks and shift sales to healthier products.
- Discourage consumption of sugary drinks by raising their prices.
- Encourage industry to produce and promote more healthy beverage options.
See XXXXXXXXXXXXX resource for more information.
Sugary drinks can be taxed through a sales tax (collected by retailers from consumers at the time of purchase and based on a percentage of the sale price) or an excise tax (collected from distributors and based on the volume or sugar content of beverages). The type of tax that a jurisdiction will pursue depends largely on what they have the legal authority to do.
Excise taxes are preferred because they generally result in an increase in the shelf price of sugary drinks and can increase the price enough to discourage consumption. In theory, distributors will pass the cost of the excise tax on to the retailers that buy from them, and retailers will in turn pass the tax on to consumers by increasing the shelf price of sugary drinks. An increase in the shelf price will then lead to a decrease in purchases and consumption. Researchers estimate that each 10 percent increase in price of sugary drinks will lead to a 12 percent decrease in their purchase.
Taxes can be based either on volume (usually by ounce) or on the amount of sugar in a drink (by grams or teaspoons). Many experts recommend the latter approach because it directly reflects the amount of harmful sugar in the drinks. However, most jurisdictions have proposed volume-based taxes because they are easier to administer.
See our guide “Best Practices in Designing Local Taxes on Sugary Drinks”
All states and many cities and counties have the legal authority to impose a tax. Contact Healthy Food America for more information.
See “Map the Movement”
Reducing consumption: Mexico and Berkeley are the only places where taxes have been in place long enough for thorough evaluation. Evidence so far has found significant decreases in purchases of sugary drinks in both locations, particularly in low-income communities. Improving public health: It is too early to detect population-level changes in sugary drink related chronic diseases such as obesity, diabetes, and heart disease, but several robust modelling studies project that reduced consumption will result in substantial health benefits and health care cost savings. See our research brief for more details. Raising revenue: • The city of Berkeley has raised $XXX since implementing their tax in XXX. The revenue has been used to fund XXXXXXX • The city of Philadelphia has raised $XXX in the in its first few months of implementation. So far the revenue has been used to fund XXXX. Other plans for funding include XXXX Influencing industry: So far industry has been focused more on opposing and killing taxes than on finding ways to comply. As taxes become more prevalent, though, industry may be more pressured and motivated to reformulate products, or promote and develop new lower-sugar products. See our research brief for more information