- Sweetened Beverage Taxes: Economic Benefits and Costs According to Household Income
- Drafting Sweetened Beverage Tax Legislation: Recommendation for Investing Revenues to Advance Equity
- Centering Equity in Sugary Drink Policy: Tax Design and Policy Research Recommendations
SWEETENED BEVERAGE TAXES
ECONOMIC BENEFITS AND COSTS ACCORDING TO HOUSEHOLD INCOME
A new study from University of Washington, led by HFA Executive Director Jim Krieger and University of Washington Associate Professor Jesse Jones-Smith is the first to use real-world tax data to describe the economic equity aspects of sweetened beverage taxes (SBTs). The study looked at taxes paid and benefits received from programs supported with tax revenues by people with lower and higher incomes in three cities with taxes. Not surprisingly, it found that people with lower incomes paid a larger proportion of their household income on SBTs compared to those with higher incomes, although the proportion of their incomes were quite small, ranging from 0.06% to 0.5% across the three cities. The annual per person dollar amount paid in taxes was also small ($5.50- $31) and did not differ by income level. Notably, the study found the net tax effect was to redistribute dollars from higher to lower income households. The dollar amount of tax revenues funding programs targeted towards people with lower incomes is greater than the amount they pay in taxes. This suggests a SBT is a progressive, equitable public policy when tax revenues are intentionally invested in communities with lower incomes. Read the published study here or the brief summarizing the results here.
- Lower income populations paid a higher percentage of their income in beverage taxes relative to higher income populations, although the percentage was small: (0.06% - 0.5% vs. 0.01 - 0.06%).
- There was no difference in the dollar amount of taxes paid per person per year by lower income and higher income households, which ranged from $5.50 to $31 across cities and income groups.
- The investment of tax revenues in lower income communities was greater than the amount these communities paid in taxes. The opposite was true for higher income communities.
- The annual net benefit to lower income communities ranged from $5.3 million to $16.4 million across the three U.S. cities included in the study.
DRAFTING SWEETENED BEVERAGE TAX LEGISLATION
RECOMMENDATIONS FOR INVESTING REVENUES TO ADVANCE EQUITY
Taxation is one of the most effective policies for reducing sales and purchases of sweetened beverages, which are a leading cause of diabetes, heart disease, and obesity in the United States. When sweetened beverage tax (SBT) revenues are strategically invested in the communities most impacted by health and social inequities and marketing of sweetened beverages, a SBT is a progressive public policy. Including specific dedication and allocation provisions in SBT legislation can ensure that revenues are invested in impacted communities to advance equity.
A team from Healthy Food America, Public Health Law Center and UConn Rudd Center developed recommendations for drafting SBT legislation that effectively dedicates and allocates revenues to intended purposes centered in equity and aligned with community priorities. The recommendations were informed by a review of all SBTs proposed or adopted in the United States between 2012-2021; interviews with policymakers and advocates with experience in drafting, adopting, and implementing SBT legislation; examination of how other types of excise taxes have approached revenue dedication and allocation; and consideration of legal issues relevant to drafting legislation. We presented our findings and recommendations in a webinar. The full report and a brief will be available later this summer.
Including provisions in tax legislation related to legislative intent, dedication and allocation of revenues, community participation in tax implementation and evaluation, and public reporting on use of the revenues helps to ensure that the tax revenues are invested to advance equity and health.
VIEW AND DOWNLOAD
INVESTING REVENUES TO ADVANCE EQUITY RECOMMENDATIONS
Investing Sweetened Beverage Tax Revenues to Advance Equity: Recommendations for Drafting Legislation - Report
Investing Sweetened Beverage Tax Revenues to Advance Equity: Recommendations for Drafting Legislation - Brief
Learn more by viewing a webinar that describes the recommendations and the research that supports them.
This report was prepared by Jim Krieger, Sally Mancini, Jamie Wallace and Susan Weisman, with support from Healthy Eating Research, a national program of the Robert Wood Johnson Foundation. The views expressed in this report do not necessarily reflect the views of the Foundation.
Centering Equity in Sugary Drink Tax Policy:
Tax Design and Policy Research Recommendations
Taxing sugary drinks has emerged as an important healthy food and chronic disease prevention policy. Sugary drink taxes generate substantial revenues to address community needs and reduce sales of sugary drinks. Yet they must do more. A well-designed tax promotes health and social equity by benefiting the people most harmed by the beverage industry’s sugary drink products and predatory marketing practices. It invests revenues in these impacted communities and gives them a strong role in deciding how to use tax revenues. This webpage contains recommendations for designing sugary drink taxes so they promote equity and for research on the equity impacts of these taxes from the Sugary Drink Tax Equity Workgroup. Recommendations are available as brief summaries and full reports.
VIEW AND DOWNLOAD
TAX DESIGN & RESEARCH RECOMMENDATIONS
Centrar la equidad en la política fiscal de bebidas azucaradas: Elementos del diseño de una política fiscal equitativa – Informe
Equitable Sugary Drink Tax Policy Recommendations
Make Equity a Priority
- Make equity a priority goal in the legislative intent language.
- Include provisions that make the revenue allocation process equitable.
- Require evaluation of tax impacts on equity.
- Pass through a significant portion of revenues collected by state-level taxes to local community-led efforts and collaborations to improve equity.
- Structure sugary drink taxes as excise taxes paid by the producers or distributors of sugary drinks.
Invest Tax Revenues in Communities
- Invest in communities most impacted by health conditions caused by consuming sugary drinks.
- Address the social and economic determinants of health that contribute to inequities in preventable chronic diseases.
- Specify that revenue investments should grow long-term community capacity to advocate for policy and systems change.
- Specify a strong community role in revenue allocation decisions.
- Support community-based organizations in impacted areas to deliver programming and activities that support health and advance equity.
- Require processes to monitor and publicly report on tax revenue collections, allocations, and spending.
- Establish a dedicated sugary drink tax revenue fund within the budget that clearly states the permitted uses of these funds.
Healthy Food America and The Praxis Project, convened the Sugary Drink Tax Equity Workgroup in 2020 to develop these recommendations. The Workgroup was comprised of 24 community, professional, and academic experts working at the forefront of tax policy design, adoption, implementation, and evaluation in the US. Workgroup members are champions for healthy communities and equity. To guide its process, the Workgroup collaboratively developed a shared values statement:
The Sugary Drink Tax Equity Workgroup values sugary drink tax policies that provide sustainable sources of support for building health equity and social justice, community capacity and agency, and that hold food and beverage corporations accountable for the harms they bring to communities.
The Workgroup also developed messaging to counter industry arguments against sugary drink taxes. If you are interested in this messaging please contact Jim Krieger - [email protected] or Xavier Morales – [email protected].
- Sabrina Adler, ChangeLab Solutions
- Rosalie Aguilar, Salud America
- Rachel Arndt, Boulder County Public Health
- Doug Blanke, Public Health Law Center
- Francis Calpotura, Sugar Freedom Project, a project of InAdvance
- Stacy Cantu, Salud America
- Victor Colman, Childhood Obesity Prevention Coalition (WA State)
- Molly Devinney, Sugar Freedom Project, a project of InAdvance
- Aaron Doeppers, Voices for Healthy Kids
- Lori Dorfman, Berkeley Media Studies Group
- Nancy Fink, Center for Science in the Public Interest
- Claudia Goytia, Voices for Healthy Kids
- Joi Jackson-Morgan, 3rd Street Youth Center
- Joelle Johnson, Center for Science in the Public Interest
- Jim Krieger, Healthy Food America/ University of WA
- Kirsten Leng, Healthy Food America
- Kimberly Libman, ChangeLab Solutions
- Sally Mancini, UConn Rudd Center for Food Policy & Obesity
- Darya Minovi, Center for Science in the Public Interest
- Xavier Morales, The Praxis Project
- NaDa R. Shoemaker, Voices for Healthy Kids
- Leika Suzumura, University of WA, MPH student
- Roberto Vargas, San Francisco Sugary Drinks Distributor Tax Advisory Committee
- Dwayne Wharton, Just Strategies
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