How a sugar tax could cut down on obesity while enhancing economic gains

A team of researchers believe that by taxing sugar-sweetened beverages (SSBs) by the amount of sugar they contain could result in massive health benefits and economic gains.

At the present, seven U.S. cities tax SSBs based on volume. However, this tax doesn’t take into account the actual amount of sugar in each beverage.

“Despite their different sugar content and resulting different harms, all sugar-sweetened beverages are taxed at the same rate per liter under a volumetric tax,” the team, made up of researchers from New York University, the Harvard T.H. Chan School of Public Health, the Wharton School at the University of Pennsylvania, and the University of California, Berkeley stated. “This tax structure gives consumers no incentive to substitute from high-sugar to low-sugar SSBs, even though the latter are less harmful. Thus, while a volumetric tax reduces consumption of SSBs in general, it does not provide the maximum possible health benefits.”

“A basic economic principle is that such corrective taxes should be proportional to the harm caused,” the authors said. “The harm from sugary drinks comes from the sugar, and SSBs vary substantially in sugar per unit volume.”

Although they believe a tax on included sugar would be more beneficial than a tax on liquid volume, the authors stated that the latter is still instrumental in fighting obesity. By the researchers’ calculations, a 34-cent-per-liter volumetric tax results in the average U.S. adult to drink 2.9 fewer ounces of SSBs per day (a 22% reduction). This decrease in sugar intake could result in a 2.3-pound weight loss for said average adult. 

Furthermore, if a nationwide volumetric SSB tax is initiated, researchers estimate obesity rates would drop by 2% (a 2.1 million decrease of obese adults), and would lower the number of new Type 2 diabetes diagnoses by 2.3% (about 36,000 new cases per year).

And such a tax would also result in massive health care savings — about $1.4 billion per year nationwide.

But taxing based on SSB sugar amounts would yield even greater results, the researchers said. U.S. adults would consume 2.3 fewer grams of sugar per day under this tax in comparison to the volumetric tax, thus helping them lose an additional 0.7 pounds. Obesity would drop in an additional 630,000 adults, Type 2 diagnosis would be slashed by another 0.7%, and the economic gain would skyrocket to an additional $400 million.

“Once there is agreement to tax SSBs, it seems natural to tax the harmful sugar, instead of the liquid that comes with the sugar,” the authors said. “Our calculations suggest that this idea offers valuable low-hanging fruit for improving public health.”

This study is published in Science.

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By Olivia Harvey, Earth.com Staff Writer

Paid for by Earth.com

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