Mariah Baker, National Center for Health Research
Sugar-sweetened beverage (SSB) taxes have been used to deter individuals away from unhealthy, sugary beverages and decrease the occurrence of chronic diseases. SSBs are drinks that are sweetened with some form of added sugar, including drinks such as soda, sports drinks, energy drinks, and prepackaged coffee and tea beverages. There are many different types of added sugar that may be in these drinks, including sucrose (table sugar), honey, and high fructose corn syrup. Easy access to SSBs and the lack of healthier options increase the amount of SSBs consumed and increase the risk of obesity, diabetes, and heart disease, especially in populations already at risk. Communities are now looking for ways to incentivize healthier choices and decrease the high consumption of sugary drinks, and SSB taxes are one solution to this increasing problem.
What Are SSB Taxes?
SSB taxes are an increased tax on sugar-sweetened beverages, usually with the exception of 100% fruit juices, milk or milk-alternative products, baby formula, alcohol, and diet drinks. SSB taxes benefit populations in two ways. First, they aim to decrease the consumption of harmful beverages by making them less affordable. And secondly, the revenue made from the taxes goes back into the community. SSB taxes are one of the only public health policies that generate more revenue than they cost to implement, and the funding is usually used to finance public health or education programs. SSB taxes use a similar strategy to what was used to decrease tobacco consumption. For the tax to be effective, it needs to increase the price of SSBs enough to deter individuals from purchasing them. SSB taxes are considered excise taxes, which are different from standard sales taxes in that the tax is paid by the retailer instead of the customer. Most SSB taxes in the US are along the lines of one to two cents per ounce of beverage.
Do SSB Taxes Work?
The World Health Organization recommends SSB taxes as an effective way to reduce overall sugar consumption and decrease non-communicable diseases such as diabetes and heart disease. SSB taxes have been implemented in numerous countries, including Norway, Mexico, and England. As of 2021, no state in the US has a SSB tax, but seven localities do, including four cities in California, as well as Philadelphia, PA, Seattle, WA, and Boulder, CO.
For example, in 2015, Berkeley, CA became the first locality in the US to implement a SSB tax. Berkeley passed a 1 cent per ounce tax, which resulted in an average price increase for customers of 0.47 cents per ounce. Because the tax has only been in effect for six years, there is not much data on long-term health effects, but the recent data on SSB drinking habits are promising. One year after the SSB tax was implemented SSB consumption dropped by 21%. Three years after the tax was implemented, consumption had dropped by about 50%, and water consumption had increased by almost 30%. The tax revenue brings around $1.5 million every year. Most of the revenue is used to fund nutrition education programs such as the Berkeley Unified School District’s Cooking and Gardening Program, which plants gardens on school campuses and teaches children about how food is grown.
In 2017, Philadelphia, PA established a SSB tax at 1.5 cents per ounce on beverages that were sweetened with sugar or artificial sweeteners (Philadelphia is the only area that has extended their tax to artificially sweetened beverages in addition to SSBs). The tax led to a price increase between 0.65 cents per ounce and 1.56 cents per ounce, depending on which store the SSB was sold in. One year after implementing this tax, researchers found that the purchase of SSBs decreased by 51% in larger stores and a separate study showed a decrease of almost 40% in small, independent stores.[2,5] However, their data also shows that more SSBs were purchased in cities bordering Philadelphia, indicating that consumers may have been going outside of the city to purchase beverages that weren’t taxed.
A 2021 paper by some of the same researchers examined purchasing trends at small independent groceries in Philadelphia, following the establishment of the sugar-sweetened beverage tax. They randomly evaluated sampled shoppers’ purchases on particular days, rather than adding all the purchases that individuals made during a specific week or month. Compared to shoppers in Baltimore, which does not have a sugar-sweetened beverage tax, Philadelphia shoppers’ purchases on those days contained 42% fewer ounces of sugar-sweetened beverages. When examining total purchases (not just beverages) of those shoppers on those days, the researchers also found that Philadelphia residents’ purchases had an average of 70 fewer calories and 20 fewer grams of sugar than Baltimore residents’ purchases following the implementation of the tax, compared with before. These reductions in purchases were most significant in low-income communities. The study only looked at small, independent stores and not at large supermarkets. It is expected that the impact of the taxes might be higher at the smaller, independent stores, since smaller stores are more likely to pass the entire tax onto customers, which may not be the case at a large supermarket. It is therefore possible that shoppers increased their purchases of sugar-sweetened beverages at the larger supermarkets, where prices are generally lower, including for beverages. The researchers also evaluated whether Philadelphia residents might have increased their shopping outside the city to save money on sugar-sweetened beverages, and the results indicated a small increase of one shopping trip per month.
Another 2021 study analyzed changes in the amount of sugar sold in SSBs after Seattle began their SSB tax in 2018. The researchers analyzed purchases made at supermarkets, and they counted the total amount of sugar sold due to the sale of SSBs, in order to compare the amount of sugar sold before and after the SSB tax was implemented. They found that, on average, there was a 23% decrease in the total amount of sugar sold at 2 years post-tax. The biggest reduction was in the amount of sugar sold in “family-sized” sodas.
In 2022, a systematic review and meta-analysis looked at the impact of taxes on SSBs based on 62 studies conducted around the world. When researchers conduct a systematic review and meta-analysis, they combine data from well-designed studies so that they can draw conclusions based on large numbers of patients who were evaluated in smaller studies. The review concluded that the SSB taxes were linked to a 15% decrease in the sales of these beverages, as measured by selling 15% fewer ounces of these beverages. This may not seem like a big decrease, but it is a larger impact than has been documented from raising taxes on tobacco and alcohol. However, when the researchers separately looked at changes in the self-reported consumption of SSBs, that did not seem to change much in this study. This was possibly because there were few studies that looked at consumption rather than sales, and they were considered to be lower quality studies because they relied on surveys that depend on people’s memory of how often they drank SSBs. The authors of the 2022 review point out that more high-quality studies are needed to determine how consumption changes in children and adults. If SSB taxes do reduce consumption, that could decrease the number of empty calories that individuals consume and improve health over a lifetime. The authors also reported the taxes do not appear to have any negative overall impact on local economies.
However, there aren’t any published studies in the US that link SSB taxes to decreased obesity or chronic disease, but several studies have projected possible long-term impacts. A 2010 study estimates that SSB taxes lead to a moderate decrease in soft drink consumption, specifically in children and teens. Although there was evidence that some children and teens replace SSBs with other high-calorie items in their diets, such as milk or smoothies, this may not be as bad as it sounds. Although milk and smoothies can be high-calorie foods, there may be other health benefits to these beverages, such as a higher protein or vitamin and mineral content. In 2020, the American Heart Association (AHA) published a health impact and cost-effectiveness analysis. The study estimates that a national, volume-based SSB tax would prevent 850,000 cardiovascular disease events (heart attack, stroke, etc.) and 269,000 cases of diabetes. The AHA also estimated that the tax could result in over $80 billion in tax revenue over a lifetime. A 2021 study done in Mexico found that SSB taxes seemed to help reduce obesity in adolescent girls (though not boys). Within 2 years of a city initiating a 10% or more SSB tax, researchers found a 3% decrease in the chance of an adolescent girl being obese or overweight. On average, the SSB tax was associated with weight loss of less than one pound, and that was only among the girls who had higher BMIs prior to the tax. Nevertheless, that small average weight loss resulted in a statistically significant difference that could be attributed to the increase in the cost of sugar-sweetened beverages, especially when prices increased by at least 10%.
Why Focus on SSBs?
SSBs make up the largest source of added sugar in the standard American diet. On average, U.S. adults consume almost 150 calories every day from SSBs. Dietary Guidelines for Americans 2020-2025 suggests that added sugars should make up no more than 10% of your total calorie intake. The AHA recommends that men have no more than 36 grams (150 calories) of total added sugar per day and that women should consume no more than 25 grams (100 calories) of total added sugar per day. For context, most “single-serving” drinks sold in drugstores or gas stations are sold in 20-ounce bottles which can contain between 200-250 calories from added sugar (see the infographic below to learn how much sugar is in your favorite drinks). The problem with SSBs is that a single drink can often contain double the amount of daily recommended sugar!
Here are some examples of popular SSBs and their sugar content.
- 20-ounces of Coca-Cola – 65 grams of added sugar – 240 calories from sugar
- 20-ounces of Schweppes Ginger Ale – 54 grams of sugar – 210 calories from sugar
- 20-ounces of Gatorade – 34 grams of sugar – 130 calories from sugar
- 20-ounces of Lemon Snapple – 45 grams of sugar – 190 calories from sugar
- 13.7-ounces of prepackaged Starbucks Vanilla Frappuccino – 46 grams of sugar – 185 calories from sugar
While drinks sweetened with artificial sweeteners, such as Sucralose, Aspartame, and Saccharin, aren’t usually considered SSBs, they have their own set of drawbacks. Artificial sweeteners may also put someone at an increased risk for obesity, heart disease, and diabetes when consumed in large quantities. You can learn more about artificial sweeteners here.
What Are the Health Effects of Drinking Too Many SSBs?
Consuming too much sugar can have serious adverse health effects. SSBs are linked to increased weight gain, which is a significant risk factor for many chronic diseases. Currently, almost 70% of adults in the U.S. are overweight. Being overweight or obese leads to an increased risk for diseases such as Type II Diabetes, heart disease, and several different types of cancer. One study showed that just one to two SSBs per day has been linked to the development of diabetes. Eating and drinking too much sugar isn’t only bad for your heart, weight, and blood sugar. SSBs also affect dental health, especially in young children. Drinking one to two SSBs per day could increase your risk of developing a cavity by over 30%, and babies between the age of 10 and 12 months that were given more than three SSBs per week had 83% higher odds of having a cavity by age six than those who were not given SSBs.[13,14]
Not all Americans drink the same amount of SSBs. Young people, males, lower-income individuals, and Black and Mexican Americans all consume more SSBs than their older, female, higher-income, and White counterparts. One analysis shows that the richest 10% of Americans drink 2.5 fewer sugary drinks per week than the poorest 10%. There are a few theories as to why this is, beginning with the fact that low-income neighborhoods often have less access to healthy food and those food choices that are established during childhood usually stick with people into their adult lives. The different levels of consumption between populations is particularly important because it can be a factor in health inequities throughout populations. For example, low-income and Black and Mexican Americans have higher rates of diabetes and heart disease, which puts them at an even higher risk for chronic diseases related to SSBs. It is concerning that the populations most at risk for chronic diseases related to SSBs are the same populations who are drinking the most of them. One study on the impact of the SSB tax in Philadelphia suggested that young adults, low-income Americans, and Black and Hispanic Americans would reap the most benefit from the tax. This is because the tax creates a greater financial strain for low-income populations than for higher-income populations, making low-income populations less likely to drink SSBs and thus improving their health.
What’s The Argument Against SSB Taxes?
While there is plenty of research done on how SSBs contribute to poor health, not everyone agrees with implementing an SSB tax. Those who oppose the tax claim that it does little to lower overall sugar consumption. One argument is that people may stop drinking sweetened beverages but may fill in those missing calories with candy or other high-sugar snacks. Critics also point out a lack of data. There is clear data linking SSB consumption to chronic disease, and studies done on the taxes in Berkeley, CA, and Philadelphia, PA, show that taxes reduce consumption but, there aren’t any studies explicitly linking SSB taxes to decreased obesity or chronic disease. More studies are needed over longer periods to show that SSB taxes prevent adverse health outcomes.
While there is still an argument for implementing SSB taxes, actually passing them is another story. A few localities have passed SSB taxes only for them to be repealed soon after. For example, Cook County, IL, which includes Chicago, enacted a SSB tax in 2016, but it was repealed less than a year later. Other states, such as Arizona and Michigan, have preemptively blocked local governments from enacting future taxes. California is even more complicated. In 2018 California signed a law that prohibits local governments from adopting new SSB taxes, but the law did not affect SSB taxes that were already implemented in Berkeley, Albany, Oakland, and San Francisco. In 2021, NCHR wrote to the California State Assembly to advocate for the repeal of this law. Repealing the law wouldn’t require local governments to tax SSBs but would give them the option to implement these taxes at the city or county level. You can read the letter here.
The Bottom Line
SSBs are consumed in alarming quantities in the United States. These beverages lead to obesity, diabetes, and heart disease, adding to the already high chronic disease levels. SSB taxes are a great policy option that can be implemented to incentivize the reduction of consumption of these beverages while helping increase revenue to benefit the community. While this strategy alone will not alleviate the obesity epidemic or the increase in cases of heart disease and diabetes, it is one option that may benefit communities when paired with other programs, such as healthy eating informational campaigns. This would lead to healthier people over time and less spending on healthcare, as preventative diseases are a significant burden on the healthcare system.
All articles are reviewed and approved by Dr. Diana Zuckerman and other senior staff.
The National Center for Health Research is a nonprofit, nonpartisan research, education and advocacy organization that analyzes and explains the latest medical research and speaks out on policies and programs. We do not accept funding from pharmaceutical companies or medical device manufacturers. Find out how you can support us here.
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