Sugary drink tax

A sugary drink tax, soda tax, or sweetened beverage tax (SBT) is a tax or surcharge (food-related fiscal policy) designed to reduce consumption of sweetened beverages by making them more expensive to purchase. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks. Fruit juices without added sugar are usually excluded, despite similar sugar content, though there is some debate on including them. This policy intervention is an effort to decrease obesity and the health impacts related to being overweight. The tax is a matter of public debate in many countries and beverage producers like Coca-Cola often oppose it. Advocates such as national medical associations and the World Health Organization promote the tax as an example of a Pigouvian tax, aimed to discourage unhealthy diets and offset the growing economic costs of obesity.

Design Tax design approaches include direct taxes on the product and indirect taxes. Indirect taxes include import/export taxes on sugar or other ingredients before it has been processed and local/regional/international taxes. Sales tax (indirect tax) is paid by the person consuming the item at the time of purchase and collected by the government from the seller. VAT (value added tax) is the most common type of tax and is also added on at the time of purchase, at an amount that is dependent on the value paid for the item. The amount of both VAT and sales tax are directly proportional to the amount of money paid for an item and do not consider the volume of food or drink. For this reason, a large (bulk) item would have less tax compared to a smaller cheaper item (i.e., there is less tax impact on larger packages of a food item). Most taxes on sugar-sweetened beverages (SSBs) are set volumetrically (i.e., with a constant rate per unit volume), and that "only three SSB taxes worldwide are proportional to sugar content." The study argued that such volumetric taxes "are poorly targeted to the actual health harms from SSBs," and suggested taxing the amount of sugar in beverages, rather than the volume of liquid accompanying the sugar. A design change such as this has been proposed to "boost a SSB tax's health benefits and overall economic gains by roughly 30%." Increased taxes on sweetened products have been suggested to promote companies to re-formulate their product in order to keep consumer costs affordable by decreasing use of the taxed ingredient (i.e., sugar) in their product. Government revenues from these taxes sometimes are put towards improving public health services, however this is not always the case. Some point to substitutes like fruit juice, energy-dense snacks and biscuits as ways a tax on processed sugar in drinks might be limited. Jurisdictions where cross-border shopping is convenient can also have the benefits of the tax reduced as some will buy sugary drinks from areas where they are not taxed.

Regressive vs. progressive tax The regressive component of the tax is that consumers on lower incomes would spend relatively more up-front due to higher prices than consumers on higher incomes. The progressive components of the tax include both the health savings and benefits to those who are most price-sensitive and the potential for tax revenue to subsidize healthier foods or other priorities for low-income people.

Health concerns related to excess sugar in the diet Type 2 diabetes is a growing health concern in many developed and developing countries around the world, with 1.6 million deaths directly due to this disease in 2015 alone. Unlike sugar from food, the sugar from drinks enters the body so quickly that it can overload the pancreas and the liver, leading to diabetes and heart disease over time. A 2010 study said that consuming one to two sugary drinks a day increases your risk of developing diabetes by 26%. Heart disease is responsible for 31% of all global deaths and although one sugary drink has minimal effects on the heart, consuming sugary drinks daily are associated with long term consequences. A study found that men, for every added serving per day of sugar-sweetened beverages, each serving was associated with a 19% increased risk of developing heart disease. Another study also found increased risks for heart disease in women who drank sugary drinks daily. Obesity is also a global public and health policy concern, with the percentage of overweight and obese people in many developed and middle income countries rising rapidly. Consumption of added sugar in sugar-sweetened beverages has been positively correlated with high calorie intake, and through it, with excess weight and obesity. The addition of one sugar-sweetened beverage per day to the normal US diet can amount to 15 pounds of weight gain over the course of 1 year. Added sugar is a common feature of many processed and convenience foods such as breakfast cereals, chocolate, ice cream, cookies, yogurts and drinks produced by retailers. The ubiquity of sugar-sweetened beverages and their appeal to younger consumers has made their consumption a subject of particular concern by public health professionals. In both the United States and the United Kingdom, sugar sweetened drinks are the top calorie source in teenager's diets. A French study published in 2019 on the British Medical Journal also enlighted a possible link between the consumption of sugary drinks (beverages containing more than a 5% of sugar) and a higher or increased risk of developing cancer. Even if the researchers were unable to prove a clear causality between the two factors, they stated that their results can be taken as a confirm that "reducing the amount of sugar in our diet is extremely important." Dental caries, also known as tooth decay or dental cavities, is the most common noncommunicable disease worldwide. Sugary drink taxes have been discussed as a potential means to reduce the health and economic burden of dental caries.

Comparison to tobacco taxes Proponents of soda taxes cite the success of tobacco taxes worldwide when explaining why they think a soda tax will work to lower soda consumption. Where the main concern with tobacco is cancer, the main concerns with soda are diabetes and obesity. The tactics used to oppose soda taxes by soda companies mimic those of tobacco companies, including funding research that downplays the health risks of its products.

Impact

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