What a one-cent soda tax buys
Americans consume an impressive 13.8 billion gallons of sugar-sweetened beverages, like soda and sports drinks, each year. .That works out to 45 gallons per person. What would happen if all 13.8 billion gallons of sugary drinks came with a one-cent-per-ounce tax? The United States would raise about $13 billion in revenue, while reducing health-care costs by about $17 billion, a new study finds.
Previous research has indicated that a one-cent tax on every ounce of sugary drinks — a 12-cent tax on a can of Coke, say — decreases consumption by somewhere between 10 and 25 percent. This team, led by Columbia University’s Claire Wang, estimates a 15 percent reduction in consumption and focuses on the impact on adults age 25 to 64. And she finds a pretty significant public health impact:
We estimate that such a tax could reduce new cases of type 2 diabetes by 2.6 percent and the prevalence of obesity by 1.5 percent. Although small, these percentage reductions would, over the course of ten years, result in 95,000 fewer instances of coronary heart disease, 8,000 fewer strokes, 26,000 fewer premature deaths (Exhibit 1), and more than $17 billion in savings from medical expenditures averted across the US population.
Such a tax would have also raised an estimated $13 billion in revenue if enacted in 2010 and, over five years, generate $79 billion.
There’s just one small problem, and it comes with moving this policy into practice: While more than a dozen states now tax soda and other sugary beverages, none do it at as high of a rate as the authors explore here. Previous research has suggested that taxes below on cent per ounce do raise revenue, but are too weak to reduce soda consumption. While plenty of state legislatures have weighed legislation to create a one-cent tax, none have actually turned those proposals into law.