A Healthy Tax on Soft Drinks Could Fund Programs and Lower Consumption

We’re drinking so much sugar-sweetened soda that it’s become a taxing problem, according to a Health Policy Report published recently in the New England Journal of Medicine. Between 1977 and 2002, Americans doubled their intake of sugary beverages. Unfortunately, that’s not good news for anyone but the beverage companies. Although high fructose corn syrup, sucrose, and fruit juice concentrates are naturally derived sweeteners (as opposed to artificial low- or no-calorie sweeteners), this added sugar has been linked to obesity, diabetes, and heart disease.

The policy report cites a number of scientific studies that link sweetened beverages with increases in obesity, diabetes, and heart disease.  For example, a two-year study of middle-school students showed that their risk of obesity increased by 60 percent with every sugar-sweetened beverage they drank per day. In light of escalating healthcare costs (which are passed on to the government when those affected are unable to pay), it seems prudent to take action to stem this rising tide of sugary beverages.

The policy report proposes adding a tax to soft drinks as a way not only to generate funding for healthcare programs, but also to persuade people to cut down their intake of soft drinks-another “sin” tax, so to speak, similar to the taxes on alcohol and tobacco products. “Excise taxes could be levied on producers and wholesalers, and the cost would almost certainly be passed along to retailers, who would then incorporate it into the retail price; thus, consumers would become aware of the cost at the point of making a purchase decision,” wrote primary author Kelly Brownell, PhD, from the Rudd Center for Food Policy and Obesity at Yale University. “The reasons to proceed are compelling.”

A tax of a penny per ounce of beverage would increase the cost of a 20-ounce soft drink by 15 to 20 percent. According to the authors’ estimates, this added cost would cause people to reduce their calorie consumption from sweetened beverages by at least 10 percent, enough to actually lose weight and reduce their health risks. 

Public support for taxes on food and beverages aimed at fighting obesity has already increased, according to the policy report, but opposition remains. Many of the objections to the tax sound familiar, in that they are similar to those used in the past by tobacco companies to oppose cigarette taxes. They include the obvious observation that a tax would not resolve the entire obesity crisis and the fact that a tax would place a greater financial burden on the poor. In response, the authors point out that the poor, who are most affected by illnesses related to unhealthy diets, would actually benefit because they would drink more water, which is both free and healthy. Moreover, the tax revenues would be channeled to programs promoting childhood nutrition, obesity prevention, and healthcare for the uninsured, all boons for people in financial straits.

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Source: New England Journal of Medicine Health Policy Report

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