Taxing sugar-sweetened beverages (SSBs) by the amount of sugar they contain, rather than by their liquid volume as seven cities in the United States currently do, could produce even greater health benefits and economic gains according to recent research.
Despite their uniform tax rates, SSBs vary in sugar content and in their potential harm, the researchers note. Consumers, then, have no incentive to switch from high-sugar to low-sugar SSBs, reducing the potential health benefits of these taxes.
Instead, corrective taxes should be proportional to the harm caused, the researchers say. Still, they add, a tax on liquid volume is beneficial. A 34-cent per liter volumetric tax causes average adults in the United States to drink 2.9 fewer ounces of SSBs per day, which is a 22% reduction.
This decrease in sugar intake would help the average adult to lose 2.3 pounds. Also, a nationwide volumetric SSB tax would reduce obesity rates by 2%, which would be a 2.1 million person decline in adults with obesity.
Further, a national volumetric SSB tax would reduce the number of new Type 2 diabetes cases by 2.3% or 36,000 cases each year. Overall economic gains, primarily through savings in healthcare costs, would total about $1.4 billion per year nationwide.
A tax on the amount of sugar in SSBs, however, would yield even greater health and economic gains, the researchers say. It would cause adults in the United States to consume 2.3 fewer grams of sugar a day from SSBs than they would under a volumetric tax.
Adults would then lose an additional 0.7 pounds, obesity rates would drop by another 630,000 adults, and the number of new Type 2 diabetes cases would fall by another 0.7%, or about 11,000 people per year. Plus, another $400 million in economic gains would be realized.
A previous study by the researchers found concluded that soda taxes serve as a “net good,” based on an examination of health benefits and consumer behavior, yielding $7 billion in net benefits to society each year.
The study, conducted by New York University, Harvard’s TH Chan School of Public Health, the Wharton School at the University of Pennsylvania, and the University of California at Berkeley, appeared in Science.