Sugary Drink Taxes

Sugary drinks are beverages with added caloric sweeteners that include sodas, fruit drinks, sports drinks, ready-to-drink tea and coffee, enhanced water, and energy drinks. They are a significant source of "empty" calories and a major contributor of added sugars in the American diet. The negative health effects of excessive consumption of sugary drinks, including weight gain and increased risk of type 2 diabetes, cardiovascular disease, dental caries, and osteoporosis have prompted recommendations to target taxes at sugary drinks. Such taxes have been implemented so far in more than 40 countries and 8 localities in the US. Evaluations of these interventions provide increasingly strong evidence of reduced purchases of sugary drinks as a result of their taxation. They also bring in significant tax revenue that can be used to further support public health.

Tax Policies and Sugary Drinks

Using tax policy has been proposed as a potential mechanism for increasing relative prices of unhealthy products and improving food choices and population diet. Current tax policy proposals include two methods of raising prices of unhealthy products with the aim of reducing purchases of such foods and improving diet quality in the population.

One approach is to tax foods with poor nutrient profiles, such as foods high in saturated fat, sodium or added sugars. An alternative approach is to impose a tax on unhealthy food categories, such as sugary drinks, energy-dense foods or snacks. Inferences about the effects of tax policy rely on assumptions about the effects of food prices on purchases and consumption patterns. The Rudd Center is committed to expanding the knowledge base about the role of food prices in affecting food choices to inform future policy decisions in this area. A couple of examples include:

  • Our team has conducted one of the first systematic literature reviews on the impacts of food prices on consumption.
  • Our director of economic initiatives is currently leading a comprehensive systematic literature review of implementing fiscal and pricing policies on foods and non-alcoholic beverages in children and adults. The review was commissioned by the World Health Organization to inform the WHO guideline development process and craft guidelines on fiscal policies to promote healthy diets across the world.

Resources


Tax Revenue Calculator

The Revenue Calculator for Sugary Drink Taxes estimates potential annual revenue from excise taxes on sugary drinks. (Zero-calorie/reduced calorie beverages such as diet drinks are not currently included in our estimation. Note that powders (e.g., fruit drink powder mixes) are also not included in our estimation.

Centering Sugary Drink Taxes in Equity

In October 2019, more than 20 national experts in sugary drink taxes and equity came together as the Sugary Drink Tax Equity Workgroup to develop recommendations on how to design equitable sugary drink tax policy. Sugary drink taxes are effective in raising revenues to promote health equity and address important needs in communities disproportionately affected by diabetes and other health conditions caused by sugary drinks. They reduce sales of sugary drinks. They need to promote equity.

After engaging in a year-long participatory process, the Workgroup has released its policy recommendations in the form of a full report, brief, and one-page infographic. The recommendations will help sugary drink tax advocates and policymakers design sugary drink taxes that are centered in equity and benefit communities most negatively impacted by the beverage industry and sugary drink products.

Sugary Drink FACTS

Explore this website to learn all about children’s drinks - including sweetened fruit drinks and waters and unsweetened 100% juice - and other sugary drinks, such as soda, sports drinks, iced teas, and energy drinks. You’ll find a comprehensive analysis of the ingredients in these drinks and how they are marketed, including on-package claims and advertising.

Visit the Website

Howard County Unsweetened

Howard County parents are concerned about sugary drinks — all that sugar, the empty calories, and the potential for severe chronic health problems. Things are changing. Soda sales in the County are down 20%. Howard County Unsweetened wants to make it easier for parents to serve the best stuff to their kids. Their Better Beverage Finder lets you find beverages any parent can love. The Better Choices Coalition works to make healthy food and drink more available. Check out their videos, too.

Visit the Website