Taxing sweetened drinks by sugar content could slash US obesity rates and save billions

A new study, led by Harvard University

Taxing sweetened drinks by grams of sugar could slash obesity rates by 630K people and save Americans $1.8 billion in healthcare costs, study says

  • Seven US cities tax sugar-sweetened beverages based on the volume of the drink
  • Researchers have proposed a tax on sweetened drinks per gram of sugar 
  • They estimate a sugar tax would help adults lose three pounds, reduce obesity by 2.5 million fewer adults and result in 47,000 fewer type 2 diabetes cases 
  • Economic costs, mainly in healthcare savings, are estimated at $1.8 billion, up from $1.4 billion with the traditional soda tax

Taxing sweetened drinks by how much sugar they contain could slash rising obesity rates and save in healthcare costs, a new study suggests.

Currently, seven US cities tax sugar-sweetened beverages (SSBs) by the volume of the drink.

While the policy has helped cut sales on fizzy drinks, researchers, led by Harvard University’s TH Chan School of Public Health, found a sugar tax would yield even greater results.

It would help the average adult lose 0.7 more pounds, cut obesity rates by an additional 630,000 adults and lower type 2 diabetes cases by 11,000 more people per year.

And the annual economic gain would be $1.8 billion nationwide.

 A new study, led by Harvard University’s TH Chan School of Public Health, estimates that if there was a tax on how much sugar a sweetened drink has, the US would save $1.8billion in healthcare costs (file image)

Berkeley, California, was the first US city to tax SSBs, settling on a penny-per-ounce tax that went into effect in March 2015. 

One year after the introduction of the tax, sales of sugary drinks fell by 9.6 percent while their sales in surrounding areas rose 6.9 percent.

The city’s water sales of increased by 15.6 percent post-tax and sales for other non-taxed drinks such as unsweetened teas, milk and fruit juices also rose.  

But this tax structure was quite as effective as health experts hoped.

The authors of the new study say drinks contain various amounts of sugar, and those differences can be leveraged to better incentivize people to buy healthier beverages.

A 20-ounce bottle of Vitaminwater contains about 32 grams of sugar while a 12-ounce can of Coca-Cola contains about 39 grams of sugar. 

‘This tax structure gives consumers no incentive to substitute from high-sugar to low-sugar sugar-sweetened beverages, even though the latter are less harmful,’ the authors write.

‘The harm from sugary drinks comes from the sugar, and [sugary drinks] vary substantially in sugar per unit volume. A basic economic principle is that…taxes should be proportional to the harm caused.’

Instead of taxing one to two cents per ounce, the researchers suggests a tax of, for example, 0.5 cents per gram of sugar.  

The team reports that taxing sugary drinks by volume has helped adults drink about three fewer ounces of sugar-sweetened beverages per day and lose about 2.3 pounds.

And they estimate that, with a nationwide tax, there would be 2.1 million fewer adults with obesity and lower the number of type 2 diabetes cases by 36,000 per year. 

What’s more, a tax based on how much sugar is in a drink would help the average adult lose an additional 0.7 pounds, resulting in a total loss of three pounds. 

Researchers estimate, in an analysis published in the journal Science, that – with a sugar tax – there would be 2.5 million fewer adults with obesity and 47,000 fewer type 2 diabetes cases per year. 

And the additional annual economic gain, the study suggests, would be $400 million, raising savings from $1.4 billion with the traditional tax to $1.8 billion with the sugar tax.

‘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 wrote.

‘Our calculations suggest that this idea offers valuable low-hanging fruit for improving public health.

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