A penny-per-ounce tax on sugar-sweetened beverages keeps the doctor away and saves money

January 9, 2012

Over the past 10 years, Americans drank more sugar-sweetened beverages than ever—as much as 13 billion gallons a year—making these drinks the largest source of added sugar and excess calories in the American diet and, arguably, the single largest dietary factor in the current obesity epidemic. While many states have a sales tax on soda, experts believe they are too low to impact consumption. In a study conducted at Columbia University Medical Center and the University of California, San Francisco, researchers estimated that if a higher, penny-per-ounce tax were imposed on sugar-sweetened beverages, it would result in an approximately 15% reduction in consumption and reduce the prevalence of obesity, diabetes, and cardiovascular disease.

The study findings are published online in the January issue of Health Affairs.

The researchers estimated that, over a ten year period (2010-2020), the penny-per-ounce could reduce new cases of diabetes by 2.6%, as many as 95,000 coronary heart events, 8,000 strokes, and 26,000 premature deaths. These health benefits represent more than $17 billion over a decade in medical costs avoided for adults aged 25󈞬, in addition to generating approximately $13 billion in annual tax revenue.

"While there is some uncertainty as to what drinks people would choose instead of taxed , our conclusion that a penny-per-ounce tax would reduce consumption by 15% is actually a conservative estimate," said Y. Claire Wang, MD, assistant professor of Health Policy and Management at Columbia University's Mailman School of Public Health. Dr. Wang notes that the tax would have the greatest impact among younger adults and men of all ages, who drink more sugar-sweetened beverages than older adults and women.

Using data from the National Health and Nutrition Examination Survey for the years 2003󈝲 and a questionnaire on food choices and frequency of meals, the investigators looked at two ways that a decrease in sugary beverage consumption would impact health: overall weight reduction and decreased risk of type 2 diabetes, both of which reduce cardiovascular disease risk over time.

According to the investigators, a combination of water, diet drinks, and more nutritious caloric beverages would likely replace the sugar-sweetened beverages, resulting in an estimated savings of as many as 60 calories for every 100 calories of sugar-sweetened drink not consumed.

"With the estimated number of 860,000 fewer obese adults aged 25–-64, and given the greater reductions in consumption among younger people, the longer-term health benefits would be far greater than the impacts during the first 10 years," noted Dr. Wang.

Sugar-sweetened beverages are cheap to buy, but they cost the U.S. plenty: about $174 billion per year on diabetes treatment costs and $147 billion on other obesity-related health problems. Because weight gain is just one factor in how sugary beverages contribute to diabetes and heart disease, the researchers point out, even if all the calories saved by cutting soda consumption were replaced and body weight remained the same, cutting consumption would still reduce diabetes and heart disease.

Some opponents to a soda tax warn that it would disproportionately burden low-income households, which purchase more sugar-sweetened beverages than those in higher-income brackets. Dr. Wang and her colleagues pointed out that the evidence is mixed regarding whether low-income consumers are more price-sensitive when it comes to these beverages. In addition, low-income people and racial and ethnic minorities bear a greater burden of obesity, cardiovascular disease, and diabetes, these groups stand to benefit the most from such a tax policy in terms of their health and savings.

"Sugary soft drinks really are liquid candy, and their low purchase price hides the true costs of health problems associated with them," said Lee Goldman, MD, MPH, Harold and Margaret Hatch Professor of Medicine and Epidemiology and Dean of the Faculties of Sciences and Medicine at Columbia University Medical Center, and also a coauthor on the paper. "Our model estimates that a penny-per-ounce tax would substantially reduce obesity, diabetes and heart disease among adults in the United States."

Explore further: Taxing sugar-sweetened beverages could yield sweet results

More information: The article, "A Penny-Per-Ounce Tax On Sugar-Sweetened Beverages Would Cut Health And Cost Burdens Of Diabetes," by Y. Claire Wang, Pamela Coxson, Yu-Ming Shen, Lee Goldman and Kirsten Bibbins-Domingo appears in the January issue of Health Affairs. See: dx.doi.org/10.1377/hlthaff.2011.0410

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2.3 / 5 (6) Jan 09, 2012
Who ends up with the tax money and what does it get used for? (more wacky political pork projects or paying back loans the Gov't has taken?)
What happens to employees of the health care system w/ far fewer unhealthy people to treat?
3.5 / 5 (11) Jan 09, 2012
What happens to employees of the health care system w/ far fewer unhealthy people to treat?

Seriously? This would actually be a problem to you? My sister treats cancer patients. I HOPE she is out of a job someday. I don't hope more people get cancer so my sister gets a bloated paycheck. W T F.
2.6 / 5 (5) Jan 10, 2012
They should extend medicare to everyone and put this tax revenue in the medicare fund. While you are at it a penny tax on burgers and on frys too. All going to the fund. If you dont use your medicare card and use private insurance you get a tax break. Allow companies to opt out of private insurance as there employees will be covered and instead pay a lower annual or quarterly fee into the fund based on the net profit.
2.4 / 5 (14) Jan 10, 2012
How about we tax Progressive Ideas? If we institute a 15-20% tax, we could raise a lot of money from blowhard progressives and at the same time raise funds!

How about adding a tax on sockpuppets?
3 / 5 (14) Jan 10, 2012
How about we tax churches that preach politics?
3.7 / 5 (3) Jan 10, 2012
While I hate social engineering through the tax code, I can't help but see the benefit of such a tax if, and only if, the tax revenues were spent on the current public healthcare bill. I wouldn't be opposed to increasing it either.
3.4 / 5 (5) Jan 10, 2012
How about we tax churches that preach politics?

So long as we fine public institutions like education every time they bring up politics, religion, and/or life style choices.
Wow! What would they do with all their spare time?
3.8 / 5 (5) Jan 10, 2012
I really despise nannies. Unless someone is committing fraud or physical harm to another it behooves everyone to mind their own business.
5 / 5 (3) Jan 10, 2012
I am quite confident that if a tax were placed on mean spirited behavior, enough revenue would be generated to eliminate the need of all other taxes.
2.3 / 5 (12) Jan 10, 2012
FH, WE AGREE!!!! We should tax churches that preach left wing politics. Like Rev. Wright church that Obama went to. We should also tax any group that is tax exempt that preach politics like Planned Parenthood, Acorn, Unions.
1.9 / 5 (9) Jan 11, 2012
It should simply cost more for over weight people to obtain insurance. Some people can drink and eat sweets and be completely healthy. Case in point, me and the wsm strongman Mariusz Pudzianosky.

ObamaCare WILL be repealed.

It's not the governments job to "impact consumption" in a free country. There is no end to the social engineering that can be done to fix societal problems. This is what a "progressivist" liberalism is,... pouring over endless statistical studies of every perceived "problem" and then implementing leftist social engineering in "nudging" freedom of choice, to inch toward their idealistic fantasy utopia.

The ills of society are the cost of freedom.

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