Estimating the Potential of Taxes on Sugar-Sweetened Beverages to Reduce Consumption and Generate Revenue

Consuming sugar-sweetened beverages (SSBs) is linked to weight gain and obesity. Could a tax on SSBs improve public health by reducing obesity? These investigators sought to figure that out by estimating revenues from an excise tax and the expected impacts on consumption.

Using historic sales and trends, they projected sales to 2015 of various types of SSBs (carbonated sugar soft drinks, fruit drinks that are not 100% juice, sports drinks, ready-to-drink teas, flavored/enhanced waters, energy drinks and ready-to-drink coffee). Producers and retailers were assumed to pass any tax on completely to consumers.

On average, excluding milk, daily non-alcoholic beverage consumption per person was 15.8 ounces or 190 calories in 2009. Trending slower growth and a penny-per-ounce tax that exempts diet beverages, this model predicts consumption of all SSBs to decline by 24 percent over five years, with some categories declining more than others. Additionally, $79 billion in tax revenue would be generated between 2010–2015. Substantial revenues could be enjoyed by city and state SSB taxation.

Taxes on SSBs could help national and state budget deficits and reduce sugar consumption, which could reduce obesity and improve public health. If some tax monies were invested in obesity-prevention initiatives, even more benefits could be reaped.