Great new tool helps cities and states estimate revenue from sugary drink taxes

For the first time, localities of all sizes will be able to estimate potential revenue from a sugary drinks tax under a range of scenarios, thanks to a newly upgraded online calculator.

The update to the Revenue Calculator for Sugary Drink Taxes was a collaborative effort by the Rudd Center for Food Policy and Obesity at UConn, where it is housed, and Healthy Food America. To create revenue models for all 50 states and 40 cities, researchers used the most recent 2015 proprietary industry data on regional beverage sales. Cities range in size from huge -- like Los Angeles -- to smaller cities, such as Sunnyvale, CA, so that policymakers in those cities, as well as in cities of similar size, can ballpark what a "soda" tax would bring in.

Accurate revenue estimates depend on a range of factors, including substantial socio-demographic differences in sugary drink consumption. Researchers used the most recent wave of  data from the National Health and Nutrition Examination Survey (NHANES) 2013-2014 to adjust beverage sales accordingly. 

The calculator can be used to estimate tax revenue for all types of sugary drinks, but not diet beverages.  Revenue estimates can be tailored by choosing several key variables, including:

  • Year – from 2017 to 2020
  • Location (all states and select cities)
  • Tax rate in cents per beverage ounce  (e.g., 0.5c/oz; 1c/oz, 2c/oz, 3c/oz)
  • Pass-through rate – the amount of the tax passed on to consumers in prices (within the range of 50%-100%).

Researchers on the calculator update include Tatiana Andreyeva, the Rudd Center’s Director of Economic Initiatives and Associate Professor of Agricultural and Resource Economics, and Lisa Powell, Distinguished Professor and Director of Health Policy and Administration and Director of the Illinois Prevention Research Center at the University of Illinois at Chicago, with input from Jim Krieger, Dan Taber and Petra Vallila-Buchman of Healthy Food America. 




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