Archive for January 12th, 2011

Predicting the Impact of a Tax on Sugary Drinks

January 12th, 2011 | 1 Comment | Source: Archives Int. Medicine, BurrillReport, NPR

Several studies have confirmed the link between excessive intake of sugary drinks and obesity, especially in kids and teenagers. Other studies have shown that steep taxes on cigarettes can cut smoking rates. So it’s plausible that a steep tax on sugary drinks could cut their consumption as well.

fanta Predicting the Impact of a Tax on Sugary DrinksA dozen states have followed this logic; they already impose taxes on sugar-laced drinks. But how big an impact can we expect from a national tax on such beverages?

Not that much, according to a new study by Eric Finkelstein and colleagues at Duke. What is more, the impact would end-up being localized to middle-class Americans, leaving the rich and poor relatively untouched.

To reach these conclusions, Finkelstein’s group looked at the association between beverage prices, energy intake, and body weight using a multivariate regression model. Their data set was derived from the 2006 Nielsen Homescan panel, in which a nationally-representative sample of US households  uploaded their store-bought food and beverage purchases into a database every week for one year.
 
The scientists found that a 20% and 40% tax on all sugary drinks would reduce calorie intake by a bunion-sized 7 and 12 calories per day, respectively. This would result in an average weight loss of 0.7 and 1.2 pounds per person per year, respectively. Interestingly however, nearly all of this impact accrued to those in the middle-income tax bracket.

The scientists also calculated that the 40% tax would generate about $2.5 billion per year in tax revenue, and that the lion’s share of this money would come from high-income households. They suggested that extending the tax to restaurants and vending machines would increase the take, but only modestly.

sprite Predicting the Impact of a Tax on Sugary Drinks“Although small, given the rising trend in obesity rates, especially among youth, any strategy that shows even modest weight loss should be considered,” Finkelstein commented.

But Susan Neely, president of the American Beverage Association didn’t think much of the idea. “Taxes are not going to teach our children how to have a healthy lifestyle,” she has said.

Regardless, public support for a soda tax would be weak, at best. Last April, a survey conducted by NPR and Thomson Reuters revealed that 51% of Americans were moderately or strongly opposed to such a tax. Only about a third liked the idea. Responses were not affected by income or age, although party affiliation did: 70% of Republicans were against the sugar tax, whereas only about 55% of Democrats were against the idea.

Finkelstein’s write-up appears in the Archives of Internal Medicine.

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