New Online Tool Offers Estimates of Revenue from Taxes on Soft Drinks

Developed by the Yale University Rudd Center in collaboration with Frank J. Chaloupka, Ph.D., professor of economics, University of Illinois at Chicago.

    • September 3, 2009

Over the last three decades, consumption of sugar-sweetened beverages (SSBs) among children and adolescents in the U.S. has been steadily increasing. Today, nearly one-third of all youth in the country—more than 23 million children and teens—are overweight or obese. This puts them at greater risk for heart disease, type 2 diabetes and other serious diseases.

In the past decade, states and localities have begun to consider taxing sugar-sweetened beverages (SSBs)—including sodas, sports drinks, sweetened tea, fruit drinks and punches—in order to generate revenue, reduce consumption of unhealthy beverages and promote public health. According to the Congressional Budget Office (CBO), the taxation of soft drinks and other snack foods generates about $1 billion in yearly revenue for states.

The Yale University Rudd Center for Food Policy and Obesity has released a Revenue Calculator for Soft Drink Taxes. The calculator can produce expected tax revenues on a state by state basis and in select major cities based on the tax amount and the type of beverage. For example, a 1 cent tax per ounce on sugar-sweetened beverages would yield the following revenues in the following states and cities:

  • $135 million/year in Chicago
  • $29 million/year in Seattle
  • $138.5 million/year in Arkansas
  • $232.8 million/year in Colorado
  • $143 million/year in Mississippi