Studies confirm sugar-sweetened beverage tax effects
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Sugar-sweetened beverages (SSBs) are the leading source of added sugars in the U.S. diet, and their consumption is linked with a range of health harms, including obesity, type 2 diabetes and cardiovascular disease. In response, SSB taxes (some of which have also applied to artificially sweetened beverages) have
been implemented in eight local US jurisdictions, one of which later repealed its tax. Lisa Powell, PhD,
distinguished professor of health policy and administration and director of the Policy, Practice and Prevention Research (P3RC) Center, is a national expert exploring the impacts of these taxes.
In a series of recent journal articles and research briefs, Powell and fellow researchers found that about 70 percent of the cost of SSB taxes are passed along to consumers and that taxes succeed at reducing demand for sugar-sweetened beverages, to the tune of an average 20 percent reduction across U.S. municipalities with a tax.
Researchers like Powell are studying not only the effects on demand for taxed SSBs but other behaviors that might change. For example, consumers might avoid sweetened beverages but substitute consumption with salty snacks or sweets. Results have been mixed: some studies did see evidence of substitution to sweets, but overall there has been a decrease in grams of sugar sold from SSBs. Another unintended consequence may be that consumers may cross municipal boundaries to avoid a tax. For example, for the tax that was in place in Cook County, IL, Powell’s research identified about one-quarter of reduction in demand for SSBs was offset by cross-border shopping, suggesting that taxes at larger geographic levels such as the state or national level may be even more effective.
Opponents of SSB taxes often argue that tax increases will lead to job losses, but studies available for the Philadelphia and San Francisco taxes have refuted these claims. Powell notes that consumers are likely to reallocate spending to other goods and services, including untaxed beverages often produced by the same companies that produce the taxed products. Governments also will spend the revenue generated by SSB taxes.
“Studies with longer follow-up periods are showing that the impacts [on demand] are sustained, suggesting taxes may permanently reduce demand for sugary beverages and help lower rates of health harms,” Powell said