Soda pop taxes are used in some jurisdictions to decrease consumption.
A sugary drink tax, soda tax, or sweetened beverage tax (SBT)[1][2][3] is a tax or surcharge (food-related fiscal policy) designed to reduce consumption of sweetened beverages by making them more expensive to purchase. Drinks covered under a soda tax often include carbonatedsoft drinks, sports drinks and energy drinks.[4] Fruit juices without added sugar are usually excluded, despite similar sugar content, though there is some debate on including them.[5][6]
This policy intervention is an effort to decrease obesity and the health impacts related to being overweight. The tax is a matter of public debate in many countries and beverage producers like Coca-Cola often oppose it. Advocates such as national medical associations and the World Health Organization promote the tax as an example of a Pigouvian tax, aimed to discourage unhealthy diets and offset the growing economic costs of obesity.[7]
Design
Tax design approaches include direct taxes on the product and indirect taxes. Indirect taxes include import/export taxes on sugar or other ingredients before it has been processed and local/regional/international taxes.[8]Sales tax (indirect tax) is paid by the person consuming the item at the time of purchase and collected by the government from the seller. VAT (value added tax) is the most common type of tax and is also added on at the time of purchase, at an amount that is dependent on the value paid for the item. The amount of both VAT and sales tax are directly proportional to the amount of money paid for an item and do not consider the volume of food or drink.[8] For this reason, a large (bulk) item would have less tax compared to a smaller cheaper item (i.e., there is less tax impact on larger packages of a food item).[8]
Most taxes on sugar-sweetened beverages (SSBs) are set volumetrically (i.e., with a constant rate per unit volume), and that "only three SSB taxes worldwide are proportional to sugar content."[9] The study argued that such volumetric taxes "are poorly targeted to the actual health harms from SSBs," and suggested taxing the amount of sugar in beverages, rather than the volume of liquid accompanying the sugar. A design change such as this has been proposed to "boost a SSB tax's health benefits and overall economic gains by roughly 30%."[9]
Increased taxes on sweetened products have been suggested to promote companies to re-formulate their product in order to keep consumer costs affordable by decreasing use of the taxed ingredient (i.e., sugar) in their product.[8] Government revenues from these taxes sometimes are put towards improving public health services, however this is not always the case.[8]
Some point to substitutes like fruit juice, energy-dense snacks and biscuits as ways a tax on processed sugar in drinks might be limited.[10] Jurisdictions where cross-border shopping is convenient can also have the benefits of the tax reduced as some will buy sugary drinks from areas where they are not taxed.[10]
Regressive vs. Progressive tax
The regressive component of the tax is that consumers on lower incomes would spend relatively more up-front due to higher prices than consumers on higher incomes.[10]
The progressive components of the tax include both the health savings and benefits to those who are most price-sensitive and the potential for tax revenue to subsidize healthier foods or other priorities for low-income people.[11]
Health concerns related to excess sugar in the diet
Type 2 diabetes is a growing health concern in many developed and developing countries around the world, with 1.6 million deaths directly due to this disease in 2015 alone.[12] Unlike sugar from food, the sugar from drinks enters the body so quickly that it can overload the pancreas and the liver, leading to diabetes and heart disease over time.[13] A 2010 study said that consuming one to two sugary drinks a day increases your risk of developing diabetes by 26%.[14]
Heart disease is responsible for 31% of all global deaths[15] and although one sugary drink has minimal effects on the heart, consuming sugary drinks daily are associated with long term consequences. A study found that men, for every added serving per day of sugar-sweetened beverages, each serving was associated with a 19% increased risk of developing heart disease.[16] Another study also found increased risks for heart disease in women who drank sugary drinks daily.[17]
Obesity is also a global public and health policy concern, with the percentage of overweight and obese people in many developed and middle income countries rising rapidly.[18] Consumption of added sugar in sugar-sweetened beverages has been positively correlated with high calorie intake, and through it, with excess weight and obesity.[19] The addition of one sugar-sweetened beverage per day to the normal US diet can amount to 15 pounds of weight gain over the course of 1 year.[20] Added sugar is a common feature of many processed and convenience foods such as breakfast cereals,[21] chocolate, ice cream, cookies, yogurts and drinks produced by retailers.[22] The ubiquity of sugar-sweetened beverages and their appeal to younger consumers has made their consumption a subject of particular concern by public health professionals. In both the United States and the United Kingdom, sugar sweetened drinks are the top calorie source in teenager's diets.[23][24]
A French study published in 2019 on the British Medical Journal also enlighted a possible link between the consumption of sugary drinks (beverages containing more than a 5% of sugar) and a higher or increased risk of developing cancer.[25] Even if the researchers were unable to prove a clear causality between the two factors, they stated that their results can be taken as a confirm that "reducing the amount of sugar in our diet is extremely important."[26]
Dental caries, also known as tooth decay or dental cavities, is the most common noncommunicable disease worldwide.[27] Sugary drink taxes have been discussed as a potential means to reduce the health and economic burden of dental caries.[28][29][30][31]
Comparison to tobacco taxes
Proponents of soda taxes cite the success of tobacco taxes worldwide when explaining why they think a soda tax will work to lower soda consumption.[32] Where the main concern with tobacco is cancer, the main concerns with soda are diabetes and obesity. The tactics used to oppose soda taxes by soda companies mimic those of tobacco companies, including funding research that downplays the health risks of its products.[33]
Impact
Revenue
The U.S. Department of Health and Human Services reports that a national targeted tax on sugar in soda could generate $14.9 billion in the first year alone.[citation needed] The Congressional Budget Office (CBO) estimates that a nationwide three-cent-per-ounce tax would generate over $24 billion over four years.[34] Some tax measures call for using the revenue collected to pay for relevant health needs: improving diet, increasing physical activity, obesity prevention, nutrition education, advancing healthcare reform, etc.[35] Another area to which the revenue raised by a soda tax might go, as suggested by Mike Rayner of the United Kingdom, is to subsidize healthier foods like fruits and vegetables.[36]
Consumption
According to a 2019 review of research on sugar drink taxes, the taxes successfully reduced consumption of sugar drinks and reduced adverse health consequences due to the increased price of the drinks drinks causes the demand for them to drop.[37] Another review of data up to 2019 found the health benefits as being of very low certainty in a one single study applied to Hungarian settings.[8]
A 10% tax in Mexico enacted in January 2014 reduced consumption by 12% after one year, said one study that had not yet been peer-reviewed.[38]
A study (which has yet to be peer-reviewed) of the 1.5-cents-per-ounce tax in Philadelphia found actual sales of the affected beverages (which included diet beverages) dropped 46% in the city itself, but when accounting for people traveling to neighboring cities without a tax, overall purchases of the affected beverages dropped 20%.[39]
The way that the tax burden is divided upon the consumer and seller depends on the price elasticity for sugary drinks. The tax burden will fall more on sellers when the price elasticity of demand is greater than the price elasticity of supply while on buyers when the price elasticity of supply is greater than the price elasticity of demand. The price elasticity for sugary drinks is different from country to country. For instance, the price elasticity of demand for the sugary drink was found to be -1.37 in Chile while -1.16 in Mexico.[40][41]
A 2019 National Bureau of Economic Research paper concluded that sugar drink taxes were "welfare enhancing, and indeed that the optimal nationwide SSB tax rate may be higher than the one cent per ounce rate most commonly used in U.S. cities."[42] A 2019 study in the Quarterly Journal of Economics estimated that the optimal sugar drink tax on the federal level in the U.S. would be between 1 and 2.1 cents per ounce, whereas the optimal tax on the city-level was 60% lower than that due to cross-border shopping.[43] A 2022 systematic review and meta-analysis of studies from around the world found that sugary drink taxes resulted in higher prices of the targeted beverages and a 15% decrease in the sales of such products.[44]
Externalities as a rationale for taxation
The purchase of sugary drinks has significant negative externalities when over-consumption causes diseases like obesity and type 2 diabetes. Depending on the national health care system, a significant portion of these costs are paid by taxpayers or insurance rate-payers; lost productivity costs are paid to some degree by employers.[45][46]
Society as a whole could be worse off if these costs are calculated to be greater than the benefit to the consumers of soda.[47]
A Pigovian tax like a sugary drinks tax, factors these externalities into the price of the beverage.[40] To some degree, this causes people who over-consume soda to pay for health care costs they are causing, which proponents argue is more fair.[47] In theory, this tax could be set at such a level that reduces consumption until the collective private benefit balances the collective costs of poorer health, though this could be accomplished at a lower tax level by using the tax revenue to create childhood nutrition programs or obesity-prevention programs.[46] This would lessen the tax burden on people who consume soda moderately enough not to cause health problems.[46]
Legislation by country
Map of countries (August 2022):[citation needed] Red: Nation-wide sugary drink tax Orange: Regional sugary drink tax Yellow: Sugary drink tax repealed Gray: No sugary drink tax
In 2020, the Province of British Columbia stopped exempting soda beverages from a 7% provincial sales tax for grocery items. Still fruit juices and non-sweetened carbonated beverages are still exempted from the tax. The measure was introduced based on health recommendations to address youth obesity.[53][54]
In May 2021, the Province of Newfoundland and Labrador announced a 20 cent per litre tax for sugar sweetened beverages.[55] This tax was implemented on September 1, 2022.[56]
Chile
In 2014, a measure was passed to increase tax on sugary drinks, and reduce tax on low-sugar drinks. The tax rate was increased from 13% to 18%. A study with data from 2011-2015 found a highly significant decrease in the monthly purchased volume of the higher-taxed, sugary soft drinks by 21.6%. The direction of the reduction was robust to different empirical modelling approaches, but the statistical significance and the magnitude of the changes varied considerably. Furthermore, the authors found a barely significant decrease in the volume of all soft drinks (that is, the higher- and lower-taxed soft drinks).[57]
Denmark
Denmark instituted a soft drink tax in the 1930s (it amounted to 1.64 Danish krone per liter), but announced in 2013 that they were going to abolish it along with a fat tax, with the stated goal of creating jobs and helping the local economy.[58][59]
France first introduced a targeted tax on nonalcoholic sugary drinks at a national level in 2012.[62][63] The tax, which is 0.0716 euro per liter, applies to both regular and diet soft drinks, flavored mineral water, and fruit juices with added sugar, but does not apply to mineral water and 100% fruit juices (i.e., those with no added sugars).[63] Following introduction, soft drinks were estimated to be up to 3.5% more expensive.[64][65]
A 2019 article published in the journal PLOS One estimated the price and consumption effects of the tax, using a difference-in-difference methodology.[63] The study concluded: "We find that the tax is transmitted to the prices of taxed drinks, with full transmission for soft drinks and partial transmission for fruit juices. The evidence on purchase responses is mixed and less robust, indicating at most a very small reduction in soft drink purchases (about half a litre per capita per year), an impact which would be consistent with the low tax rate. We find suggestive evidence of a larger response by the sub-sample of heavy purchasers. Fruit juices and water do not seem to have been affected by the tax."[63]
Hungary's tax, which came into effect in September 2011, is a 4 per cent tax[66] on foods and drinks that contain large quantities of sugar and salt, such as soft drinks, confectionery, salty snacks, condiments, and fruit jams.[67] In 2016, the tax has resulted in a 22% reduction in energy drink consumption and 19% of people reduced their intake of sugary soft drinks.[67]
Sugar tax introduced on 1 May 2018. The tax sees 30 cent per litre added to the price of popular sweetened drinks containing more than 8g of sugar per 100ml.[69]
Israel
In 2022 Israel also imposed a sugary drink tax due to it adding to their obesity rates.[70] The tax has been cancelled as of 2023.[71]
Italy
In 2018 several medical representatives forwarded an official letter to the Minister of HealthGiulia Grillo containing a proposal to raise a 20% tax on sugary drinks, seen as a way to generate benefits for consumers' general health.[72] A debate emerged on the introduction of such a tax, seen on the one hand as a possible mean to promote a healthier diet, and on the other as a danger to the sugar industry.[73] In September 2019 the Prime MinisterGiuseppe Conte mentioned in a public speech the idea of introducing a tax "on carbonated drinks" (not specifying if it refers only to sugary drinks), referring to it as "practicable".[74]
By the end of 2019 the proposal of a tax on the consumption of sweetened soft drinks equal to 10 Euros per hectolitre in the case of finished products and 0.25 Euros per kilogram in the case of products to be diluted has been officially approved; its official start has been then postponed to 1 January 2022.[75] The association of soft drinks and beverages producers has renewed its opposition to the proposal, estimating that it would have as an effect a contraction of the market equal to 16%.[76]
Malaysia
Malaysia has a sugary drink tax implemented 1 July 2019.[77]
In September 2013, Mexico's president Enrique Peña Nieto, on his fiscal bill package, proposed a 10% tax on all soft drinks, especially carbonated drinks,[79][80] with the intention of reducing the number of patients with diabetes and other cardiovascular diseases in Mexico, which has one of the world's highest rates of obesity.[81] According to Mexican government data, in 2011, the treatment for each patient with diabetes cost the Mexican public health care system (the largest of Latin America) around US$708 per year, with a total cost of 778,427,475 USD in 2010, and with each patient paying only 30 MXN (around US$2.31).[82]
In September 2013, soda companies launched a media campaign to discourage the Mexican Chamber of Deputies and Senate from approving the 10% soda tax. They argued that such measure would not help reduce the obesity in Mexico and would leave hundreds of Mexicans working in the sugar cane industry jobless.[83] They also publicly accused New York City Mayor Michael Bloomberg[84] of orchestrating the controversial bill from overseas. In late October 2013, the Mexican Senate approved a 1 MXN per litre tax (around US$0.08) on sodas, along with a 5% tax on junk food.[85]
Research has shown that Mexico's sugary drinks tax reduced soft drink consumption.[86][87] According to a 2016 study published in BMJ, annual sales of sodas in Mexico declined 6% in 2014 after the introduction of the soda tax.[86] Monthly sales figures for December 2014 were down 12% on the previous two years.[86] Households with the fewest resources had an average reduction in purchases of 9% in 2014, increasing to 17% by December.[86] Furthermore, purchases of water and non-taxed beverages increased by about 4% on average.[86] Whether the imposition of the tax and the resulting 6% decline in sales of soft drinks will have any measurable impact on long-term obesity or diabetes trends in Mexico has yet to be determined.[86] The authors of the study urged the Mexican authorities to double the tax to further reduce consumption.[86]
A 2016 study published in PLoS Medicine suggested that a 10% excise tax on soda "could prevent 189,300 new cases of Type 2 diabetes, 20,400 strokes and heart attacks, and 18,900 deaths among adults 35 to 94 years old" over a ten-year period.[87] The study also included that "the reductions in diabetes alone could yield savings in projected healthcare costs of $983 million."[87]
A 2017 study in the Journal of Nutrition found a 6.3% reduction in soft drink consumption, with the greatest reductions "among lower-income households, residents living in urban areas, and households with children. We also found a 16.2% increase in water purchases that was higher in low- and middle-income households, in urban areas, and among households with adults only."[88]
Norway has had a generalized sugar tax measure on refined sugar products since 1922, introduced to boost state income rather than reducing sugar consumption.[91] Non-alcoholic beverages have since been separated from the general tax, and in 2017, the tax for sugary drinks was set to 3.34 kroner per litre.[92]
In January 2018, the Norwegian government increased the sugar tax level by 83% for general sugar-containing ready-to-eat products, and 42% for beverages. The sugar tax per litre was bumped up to 4.75 kroner, and applies to beverages which are either naturally or artificially sweetened.[93]
The 42% tax increase on non-alcoholic beverages was attacked by Norwegian retailers and received much media attention. The increase was claimed to encourage even more traffic to the Swedish border shops, as Sweden does not have tax on non-alcoholic beverages. The tax increase was rolled back to 2017-level in 2020.
As a result of a budget settlement, the tax on non-alcoholic beverages was further reduced by 48.1% to 1.82 kroner per litre, effective January 2021.[94]
In the taxation reform law dubbed as the Tax Reform for Acceleration and Inclusion Law (TRAIN) signed by PhilippinePresidentRodrigo Duterte in December 2017. It includes taxation on sugar-sweetened drinks which will be implemented the following year, as an effort to increase revenue and to fight obesity.[96] Drinks with caloric and non-caloric sweeteners will be taxed ₱6.00 per liter, while those using high-fructose corn syrup, a cheap sugar substitute, will be taxed at ₱12 per liter.
Exempted from the sugar tax are all kinds of milk, whether powdered or in liquid form, ground and 3-in-1 coffee packs, and 100-percent natural fruit and vegetable juices, meal replacements and medically indicated drinks, as well as beverages sweetened with stevia or coco sugar. These drinks, especially 3-in-1 coffee drinks which are popular especially among lower-income families, are to be taxed as initially proposed by the House of Representatives version of the bill,[97] but were exempted in the Senate version.[98]
Poland
Poland introduced a sugar tax on soft and energy drinks in January 2021.[99] It was reported that after its introduction prices of soft drinks increased by 36% and consumption dropped by 20%.[citation needed]
Portugal
Portugal introduced a sugary drink tax in 2017. It also has a tax on foods with high sodium.[100]
Saudi Arabia has a 50% sugar tax only on soft and energy drinks since 10 June 2017, and since 1 December 2019 the same tax percentage applies to all sugary drinks.[101][102]
Singapore
During the National Day Rally 2017, Prime Minister Lee Hsien Loong spoke at length on the importance of fighting diabetes. He said, "If you drink soft drinks every day, you are overloading your system with sugar, and significantly increasing your risk of diabetes. Our children are most at risk because soft drinks are part of their lifestyle."[103]
On 4 December 2018, the Ministry of Health began a consultation exercise to seek public's feedback on four proposed measures to fight diabetes including a ban on high-sugar packet drinks and implementation of a sugar tax.[104][105][106] On 10 October 2019, the Ministry of Health chose to ban advertisements of drinks with high sugar content; making Singapore the first country in the world to do so, as well as introduce color-coded labels. This comes after a public consultation favored these two options out of four. The labels will indicate drinks as "healthy", "neutral", "unhealthy" and take into account the amount of sugar and saturated fat contained in drinks, among other factors. They will be compulsory for "unhealthy" drinks and optional for "healthy" ones, covering instant drinks, soft drinks, juices, cultured milk and yogurt drinks in bottles, cans and packs. These measures will take effect sometime in 2020.[107][108]
South Africa
South Africa proposed a sugar-sweetened beverages tax in the 2016 South African national government budget.[109] South Africa introduced a sugar tax on 1 April 2018. The levy was fixed at 2.1 cents per gram of sugar, for each gram above 4g per 100ml of sweetened beverage. The levy excludes fruit juices, despite health professionals warning that fruit juice is as bad for a person as highly sugary drinks.[110]In 2022, the government considered extending the tax to fruit juices.[6]
St Helena
In March 2014, the government of the island of St Helena, a British Overseas Territory in the South Atlantic, announced that it would be introducing an additional import duty of 75 pence per litre on sugar-sweetened carbonated drinks with more than 15 grams of sugar per litre.[111] The measure was introduced in May 2014 as part of a number of measures to tackle obesity on the island and the resulting high incidence of type 2 diabetes.
In October 2017, the United Arab Emirates introduced a 50% tax on soft drinks and a 100% tax on energy drinks, to curb unhealthy consumption of sugary drinks that can lead to diabetes; it also added a 100% tax on cigarettes.[114] From 1 January 2020, the UAE would impose a tax on all products which contains sugar or artificial sweeteners.[115]
United Kingdom
In the 2016 United Kingdom budget, the UK Government announced the introduction of a sugar tax, officially named the "Soft Drinks Industry Levy". The tax came into effect on 6 April 2018.[116] Beverage manufacturers are taxed according to the volume of sugar-sweetened beverages they produce or import. The tax is imposed at the point of production or importation, in two bands. Drinks with total sugar content above 5g per 100 millilitres are taxed at 18p per litre and drinks above 8g per 100 millilitres at 24p per litre. The measure was estimated to generate an additional £1 billion a year in tax revenue which would be spent on funding for sport in UK schools.[117][118] The tax raised £336m in 2019-2020.[119] Despite not being part of the United Kingdom the British Soft Drinks Industry Levy came into force on the Isle of Man on 1 April 2019 because of the Common Purse Agreement.[120] It was proposed that pure fruit juices, milk-based drinks and the smallest producers would not be taxed.[121] For other beverages there was an expectation that some manufacturers would reduce sugar content in order to avoid the taxation.[121]
Notable research on effect of excess sugar in modern diets in the United Kingdom includes the work of Professor John Yudkin with his book called, "Pure, White and Deadly: The Problem of Sugar" first published in 1972.[122] With regard to a proposed tax on sugar-sweetened beverages, a study published in the British Medical Journal on 31 October 2013, postulated that a 20% tax on sugar-sweetened beverages would reduce obesity in the United Kingdom rates by about 1.3%, and concluded that taxing sugar-sweetened beverages was "a promising population measure to target population obesity, particularly among younger adults."[123] A study by the University of Glasgow cautioned that focusing on sugar in isolation might result in some consumers switching to other high-calorie untaxed products.[124] Professor Robert Lustig of the University of California, San Francisco School of Medicine argued that the UK tax measure may not go far enough and that, "juice should be taxed the same way as soda because from a metabolic standpoint juice is the same as soda."[5] Campaigners have since called for the soft drinks tax to be extended to include confectionery and sweets to help tackle childhood obesity.[125]
United States
The United States does not have a nationwide soda tax, but taxes have been passed by localities.[126] A few states also impose excise taxes on bottled soft drinks or on wholesalers, manufacturers, or distributors of soft drinks.[127]
Supermarket chilled beverage selection
Berkeley, California
The Measure D soda tax was approved by 76%[128][129] of Berkeley voters on 4 November 2014, and took effect on 1 January 2015 as the first such tax in the United States.[130] The measure imposes a tax of one cent per ounce on the distributors of specified sugar-sweetened beverages such as soda, sports drinks, energy drinks, and sweetened ice teas but excluding milk-based beverages, meal replacement drink, diet sodas, fruit juice, and alcohol. The revenue generated will enter the general fund of the City of Berkeley.[131]
In August 2015, researchers found that average prices for beverages covered under the law rose by less than half of the tax amount. For Coke and Pepsi, 22 percent of the tax was passed on to consumers, with the balance paid by vendors.[132]UC Berkeley researchers found a higher pass-through rate for the tax: 47% of the tax was passed-through to higher prices of sugar-sweetened beverages overall with 69% being passed-through to higher soda prices.[133] In August 2016, a UC Berkeley study (relying on self-reporting) showed a 21% drop in the drinking of soda and sugary beverages in low-income Berkeley neighborhoods after a few months.[134] A study from 2016 compared the changing intake of sugar sweetened beverages and water in Berkeley versus San Francisco and Oakland (which did not have a sugary drink tax passed) before and after Berkeley passed its sugary drink tax. This analysis showed a 26% decrease of soda consumption in Berkeley and 10% increase in San Francisco and Oakland while water intake increased by 63% in Berkeley and 19% in the two neighboring cities.[135] A 2017 before and after study has concluded that one year after the tax was introduced in Berkeley, sugary drink sales decreased by 9.6% when compared to a scenario where the tax was not in place.[136] This same study was also able to show that overall consumer spending did not increase, contradicting the argument of opponents of the Sugary Drink Tax.[136] Another 2017 study results were that purchases of healthier drinks went up and sales of sugary drinks went down, without overall grocery bills increasing or the local food sector losing money.[137] A 2019 study relying on self-reporting found a 53% drop in consumption in low-income neighborhoods after three years.[39]
Oakland, California
A one-cent-per-ounce soda tax (Measure HH) passed with over 60% of the vote on 8 November 2016. The tax went into effect on 1 July 2017.[138]
San Francisco, California
A one-cent-per-ounce soda tax (Prop V) passed with over 61% of the vote on 8 November 2016 and applies to distributors of sugary beverages on 1 January 2018.[138] Exemptions for the tax include infant formulas, milk products, supplements, drinks used for medical reasons, and 100% fruit and vegetable juices.[139] The soda industry doubled their spending from 2014 to almost $20 million in its unsuccessful push to defeat the soda tax initiative, a record-breaking amount for a San Francisco ballot initiative.[140]
Albany, California
A one-cent-per-ounce soda tax (Prop O1) passed with over 70% of the vote on 8 November 2016.[138] The tax went into effect on 1 April 2017[141]
Boulder, Colorado
A two-cents-per-ounce soda tax (Measure 2H) passed with 54% of the vote on 8 November 2016.[138] The tax took effect on 1 July 2017, and revenue will be spent on health promotion, general wellness programs and chronic disease prevention that improve health equity, and other health programs especially for residents with low income and those most affected by chronic disease linked to sugary drink consumption.[142] The University of Colorado, Boulder, campus was granted a one-year exemption from the tax as school officials survey what types of drinks students wish to have. The university was not aware it would be involved in the soda tax, and would have to pay an estimated additional $1 million a year to purchase sugary drinks.[143]
Cook County, Illinois
A one-cent-per-ounce soda tax passed on 10 November 2016, making it the most populous jurisdiction with a soda tax in the U.S.[144] The campaign to introduce the tax was heavily funded by Mike Bloomberg.[145] The tax went into effect on 2 August. Due to a conflict with the Supplemental Nutrition Assistance Program, this soda tax did not apply to any soda purchases made with food stamps, which were used by over 870,000 people.[145][146] On 10 October 2017, the Board of Commissioners voted to repeal the tax in a 15–1 vote. The tax stayed in effect up until 1 December.[147] The tax was unpopular and seen as an attempt to plug the county's $1.8 billion budget deficit, rather than a public health measure.[145]
Navajo Nation
In addition to the general sales tax (6 percent as of July 1, 2018) the Navajo Nation levies a special Junk Food Tax on applicable junk food items. The Junk Food Tax rate is 2 percent and applies to sales of sweetened beverages.[148][better source needed]
Philadelphia, Pennsylvania
Philadelphia mayor Jim Kenney initially proposed a citywide soda tax that would raise the price of soda at three cents per ounce, which would have been the highest soda tax rate in the United States. Kenney promoted using tax revenue to fund universal pre-K, jobs, and development projects while reducing sugar intake.[149] The American Beverage Association (ABA) spent $10.6 million in 2016 in its effort against the tax.[150][151] The American Medical Association, American Heart Association, and other medical and public health groups supported the tax.[152] The Philadelphia City Council approved a 1.5-cents-per-ounce tax on 16 June 2016, effective on 1 January 2017.[153]
A 2017 study found that Philadelphia's tax has decreased sugary beverage consumption in impoverished youth by 1.3 drinks/week.[154] Langellier et al. also found that when paired with the pre-K program, attendance increases significantly, a finding that is likely to have longer term positive effects than a sugary drink tax alone.[154] A 2019 study (which has yet to be peer-reviewed) of the 1.5-cents-per-ounce tax in Philadelphia found purchases of the affected beverages (which included diet beverages) dropped 20% after some residents bought more in other jurisdictions.[39]
Seattle, Washington
On 5 June 2017, Seattle's City Council voted 7–1 to pass a 1.75 cents per ounce tax on sugary drinks, with implementation beginning on 1 January 2018.[155] The final tax includes sugar-sweetened sodas, juice drinks with sugar added, and some but not all coffee products containing sugar; during the drafting process, the city's powerful specialty coffee industry lobbied for the limitations on which coffee drinks were subject to the tax, and the City Council debated also taxing artificially-sweetened sodas on grounds of racial and economic equity.[156]
Seattle collected over $17 million in the first nine months of the tax, against a pre-implementation annual estimate of $15 million a year; the price increase on taxed beverages has mostly been passed on to consumers.[157] Post-implementation studies conducted by the city auditor, University of Washington, and University of Illinois Chicago have shown a roughly 20% decrease in the sales of taxed beverages[158] as well as a small decrease in youth Body Mass Index and its rate of change relative to areas outside the city.[159]
In 2018, Washington state voters approved Initiative 1634 which bans new taxes on grocery items such as sugary drinks, blocking other Washington cities from adding a sugary drink tax. Funding for the "Yes on 1634" campaign included over $20 million from major beverage producers.[160]
Scientific studies
2015 emails revealed that funding by Coca-Cola for scientific studies sought to influence research to be more favorable to their business interests.[161] A 2016 meta-analysis found that research funded by soda companies was 34 times more likely to find that soda has no significant health impacts on obesity or diabetes.[162]
Individual studies
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Taxing soda can lead to a reduction in overall consumption, according to a scientific study published in the Archives of Internal Medicine in March 2010. The study found that a 10 percent tax on soda led to a 7 percent reduction in calories from soft drinks. These researchers believe that an 18 percent tax on these foods could cut daily intake by 56 calories per person, resulting in a weight loss of 5 pounds (2.3 kg) per person per year. The study followed 5,115 young adults ages 18 to 30 from 1985 to 2006.[163][164]
A 2010 study published in the medical journal Health Affairs found that if taxes were about 18 cents on the dollar, they would make a significant difference in consumption.[165][166]
Research from Duke University and the National University of Singapore released in December 2010 tested larger taxes and determined that a 20 percent and 40 percent taxes on sugar-sweetened beverages would largely not affect calorie intake because people switch to untaxed, but equally caloric, beverages. Kelly Brownell, a proponent of soda taxes, reacted by stating that "[t]he fact is that nobody has been able to see how people will really respond under these conditions."[167] Similarly, a 2010 study concluded that while people would drink less soda as a result of a soda tax, they would also compensate for this reduction by switching to other high-calorie beverages.[168] In response to these arguments, the American Public Health Association released a statement in 2012 in which they argued that "Even if individuals switch to 100% juice or chocolate milk, this would be an improvement, as those beverages contribute some nutrients to the diet."[169]
A 2011 study in the journal Preventive Medicine concluded that "a modest tax on sugar-sweetened beverages could both raise significant revenues and improve public health by reducing obesity".[170] It has been used by the Rudd Center for Food Policy and Obesity at Yale to estimate revenue from a soda tax, depending on the state, year and tax rate.[171]
A 2012 study by Y. Claire Wang, also in the journal Health Affairs, estimates that a penny per ounce tax on sugared beverages could prevent 2.4 million cases of diabetes per year, 8,000 strokes, and 26,000 premature deaths over 10 years.[172]
In 2012, just before the city of Richmond began voting on a soda tax, a study was presented at a conference held by the American Public Health Association regarding the potential effects of such a tax in California. The study concluded that, given that soda's price elasticity is such that taxing it would reduce consumption by 10–20 percent, that this reduction "...is projected to reduce diabetes incidence by 2.9–5.6% and CHD by 0.6–1.2%."[173]
A 2013 study in the American Journal of Agricultural Economics concluded that a 0.5-cent-per-ounce tax on soft drinks would reduce consumption, but "increase sodium and fat intakes as a result of product substitution," in line with the Duke University study mentioned above.[174]
A 2014 study published in the American Journal of Public Health concluded that Sugar-Sweetened Beverages (SSBs) don't have a negative impact on employment. Even though job losses in the taxed industry occurred, they were offset by new employment in other sectors of the economy.[175]
A 2016 modelling study estimated that a 20% tax on SSBs would decrease the consumption of SSBs in Australia by 12.6%. The tax could decline the prevalence of obesity in the Australian population, which could lead to gains in health-adjusted life years. The results showed an increase of 7.6 days in full health for a 20-24-year-old male and a 3.7 day increase in longevity for their female peers.[176]
Between 2016 and 2020, economists from the University of Iowa, Cornell University, and Mathematica, a policy research firm, conducted a multiyear study of local sweetened-beverage taxes in Philadelphia, Oakland, Seattle, and San Francisco. The study examined the taxes’ one-year impacts on purchases, consumption, tax pass-through rates, pricing, and product availability. It was the first to look at the impacts on Oakland's sugar-sweetened beverage tax and the first to look at impacts of the taxes on children's consumption in either Philadelphia or Oakland. The study found that almost a year after Philadelphia and Oakland implemented taxes on sweetened beverages, purchases of sweetened beverages declined overall even as some of the effect is reduced by city residents shopping more in nearby untaxed jurisdictions. Consumption did not decline significantly overall in Philadelphia or Oakland, but there is more evidence of reduced consumption in Philadelphia, particularly among certain groups. Findings from the project have been published in peer-reviewed journals, such as the Journal of Policy Analysis and Management,[177]Economics and Human Biology,[178] the Journal of Health Economics,[179] as well as in working papers hosted by the National Bureau of Economic Research[180] and in Mathematica issue briefs.[181]
Proposals
Colombia
A 2016 proposal for a 20% sugary drink tax, campaigned by Educar Consumidores, was turned down by the Colombian legislature despite opinion polls showing 70% support for it.[52] Health officials and media outlets received substantial pressure against speaking out in favor of the tax.[52]
United States
Some of the most notable early tax proposals include:
In July 2014, U.S. Representative Rosa DeLauro of Connecticut, proposed a national soda tax.[193]
In November 2014, voters in San Francisco and Berkeley, California voted on soda tax ballot measures.[194] The measure was approved in Berkeley[195] and received 55% of the vote in San Francisco, but was short of the needed 2/3 supermajority.[196]
In a May 2017 election, Santa Fe's proposed tax on all sugar-sweetened beverages was voted down.[197]
Public support
A 2016 poll by Morning Consult-Vox finds Americans split on their support of a soda tax.[198] A 2013 poll concluded that "respondents were opposed to government taxes on sugary drinks and candy by a more than 2-to-1 margin."[199] In California, however, support for a tax has been high for a few years. According to a Field Poll conducted in 2012, "Nearly 3 out of 5 California voters would support a special fee on soft drinks to fight childhood obesity."[200]
^ abcSilano, Marco, and Carlo Agostoni. "To Tax Or Not To Tax Sugary Drinks? This Is The Question". Journal of Pediatric Gastroenterology and Nutrition (2017): 1. Web.
^"Diabetes Fact Sheet". World Health Organisation. November 2016. Archived from the original on 26 August 2013. Retrieved 20 March 2017.
^"Sugar-Sweetened Beverages". SugarScience. University of California, San Francisco. 2 September 2014. Archived from the original on 3 December 2016. Retrieved 8 November 2016.
^"The Nutrition Source: Sugary Drinks". Harvard T.H. Chan School of Public Health. Harvard School of Public Health. 4 September 2013. Archived from the original on 23 December 2020. Retrieved 22 March 2016.
^Jevdjevic, M. M; Trescher, A.-L.; Rovers, M.; Listl, S. (2019). "The caries-related cost and effects of a tax on sugar-sweetened beverages". Public Health. 169: 125–132. doi:10.1016/j.puhe.2019.02.010. PMID30884363. S2CID83460786.
^Schwendicke, F.; Thomson, W.M.; Broadbent, J.M.; Stolpe, M. (1 November 2016). "Effects of Taxing Sugar-Sweetened Beverages on Caries and Treatment Costs". Journal of Dental Research. 95 (12): 1327–1332. doi:10.1177/0022034516660278. PMID27671690. S2CID23811520.
^ abGuerrero-López, Carlos M., Mishel Unar-Munguía, and M. Arantxa Colchero. "Price Elasticity Of The Demand For Soft Drinks, Other Sugar-Sweetened Beverages And Energy Dense Food In Chile". BMC Public Health 17.1 (2017): n. pag. Web.
^Colchero, M.A. et al. "Price Elasticity Of The Demand For Sugar Sweetened Beverages And Soft Drinks In Mexico". Economics & Human Biology 19 (2015): 129-137. Web.
^Taubinsky, Dmitry; Lockwood, Benjamin B.; Allcott, Hunt (2019). "Regressive Sin Taxes, with an Application to the Optimal Soda Tax". The Quarterly Journal of Economics. 134 (3): 1557–1626. doi:10.1093/qje/qjz017. S2CID182563060.
^Government of British Columbia (February 2021). "Notice to Sellers of Soda Beverages"(PDF). Government of British Columbia. Archived(PDF) from the original on 16 April 2021. Retrieved 28 May 2021.
^Arthur, Rachel (14 December 2018). "Sugar taxes: the global picture". foodnavigator-latam.com. Archived from the original on 19 February 2022. Retrieved 13 October 2019.
^"Avgiftssatser 2017" (in Norwegian). Government of Norway. 20 December 2016. Archived from the original on 21 March 2017. Retrieved 20 March 2017.
^Finansdepartementet (12 October 2017). "Avgiftssatser 2018". Regjeringen.no (in Norwegian). Archived from the original on 19 February 2018. Retrieved 19 February 2018.
^Finansdepartementet (7 October 2020). "Avgiftssatser 2021". Regjeringen.no (in Norwegian). Archived from the original on 12 February 2021. Retrieved 4 February 2021.
^Arthur, Rachel (14 December 2018). "Sugar taxes: the global picture". www.foodnavigator-latam.com. Archived from the original on 19 February 2022. Retrieved 13 October 2019.
^"2016 budget people's guide"(PDF). South African National treasury and Revenue Service. 24 February 2016. p. 4. Archived(PDF) from the original on 23 January 2022. Retrieved 24 February 2016. Obesity is a worldwide concern. South Africa has the worst obesity ranking in sub-Saharan Africa. This has led to greater risk of heart disease, diabetes and cancer. Government proposes to introduce a tax on sugar-sweetened beverages on 1 April 2017 to help reduce excessive sugar intake.
^Child, Katharine (15 December 2017). "How the sugar tax will work". South Africa Sunday Times. Archived from the original on 30 December 2018. Retrieved 29 December 2018.
^St Helena Government (21 March 2014). "Budget Speech 2014". Archived from the original on 21 June 2015. Retrieved 26 March 2014.
^Sorensen, Christian, Alec Mullee, and Harley Duncan (June 2017). "Soda Taxes: Old and New". The Tax Adviser. 48 (6): 410–414. Archived from the original on 7 November 2017. Retrieved 7 July 2017.((cite journal)): CS1 maint: multiple names: authors list (link)
^Fletcher, Jason M. (December 2010). "The effects of soft drink taxes on child and adolescent consumption and weight outcomes". Journal of Public Economics. 94 (11–12): 967–974. doi:10.1016/j.jpubeco.2010.09.005.
^Andreyeva, T.; Chaloupka, F. J.; Brownell, K. D. (2011). "Estimating the potential of taxes on sugar-sweetened beverages to reduce consumption and generate revenue". Preventive Medicine. 52 (6): 413–416. doi:10.1016/j.ypmed.2011.03.013. PMID21443899.
^Lisa M. Powell, Roy Wada, Joseph J. Persky, Frank J. Chaloupka, "Employment Impact of Sugar-Sweetened Beverage Taxes", American Journal of Public Health 104, no. 4 (1 April 2014): pp. 672-677.
^Cawley, John; Frisvold, David; Hill, Anna; Jones, David (2020). "The Impact of the Philadelphia Beverage Tax on Prices and Product Availability". Journal of Policy Analysis and Management. 39 (3): 605–628. doi:10.1002/pam.22201. S2CID214526627.
^Brendsel, Dave (26 June 2013). "Telluride proposes soda tax". Colorado Department of Public Health and Environment. Archived from the original on 5 November 2013. Retrieved 9 August 2013.
