Soda Tax: What Can a Penny Do?

We've seen it with tobacco. As taxes went up, use went down. Public health advocates have been salivating over the prospect of a tax on sugar-sweetened beverages to gain a similar foothold in the obesity epidemic and the myriad health problems excess weight causes. But hard evidence on the health effects of such a tax has been limited.

A new study in today's Health Affairs, quantifies the impact quite nicely. A nationwide penny-per-ounce tax, the authors estimate, would reduce sugar-sweetened beverage consumption by 15 percent. They say that modest reduction will lead to modest weight loss, which in turn leads to modest reductions in diabetes. After the researchers crunched all the numbers, all those modest reductions would, over ten years, result in 26,000 lives saves (or avoiding "premature deaths" as researchers prefer to say).

There would also be 95,000 fewer instances of heart disease and 8,000 fewer strokes.

Why all the fuss about sugar-sweetened beverages? Americans guzzled 13.8 billion gallons of them in 2009. "These beverages represent the largest source of added sugar and excess calories in the American diet and have been linked to weight gain and type 2 diabetes," the authors write.

Kirsten Bibbins-Domingo, an epidemiologist at UC San Francisco, was the senior author of the study. "We knew that diabetes was a big problem and if you could do something to reduce risk of diabetes, that you would have a big impact. But we're always surprised when we look at the numbers when a relatively small impact could have such a large and measurable benefit in terms of diabetes."

In addition to the lives saved, the researchers estimated that $17 billion dollars in health costs would be saved.

"It's a very important study," says Harold Goldstein of the California Center for Public Health Advocacy. "We know that sugary drinks are a major contributor to the obesity epidemic so this study that a soda tax simultaneously reduces consumption, improves the health of Americans and lowers health care costs is an important addition to what we know about potential benefits of a soda tax."

Juliet Sims of Oakland's Prevention Institute says a soda tax is an obesity fighting strategy they've been interested in for several years, but for more than just public health reasons. "Companies need to pay their fair share. We're the ones paying the price in terms of our health and dollars on the back end. Soda's cheap and soda companies have created a world in which a soda is always in arm's reach, but we're the ones paying that price."

Unlike sales tax which shows up at the register, after the decision to buy has already been made, a soda tax would be an excise tax. It would show up as purchase price. Diet beverages right next to their full-sugar counterparts on the shelf, would show a lower price.

The researchers admit that even the modest number of people who reduce drinking sugar-sweetened beverages will likely still consume at least some of those calories in other ways. But sugar-sweetened beverages have insidious health risks. The study notes that women who drink one sugar-sweetened beverage per day may increase her risk of developing diabetes by 83-98 percent.

"It's pretty clear that the sugar-sweetened beverages have some impact on diabetes beyond the calories we're talking about," Bibbins-Domingo says. "They increase your risk of diabetes beyond increasing your weight. They have an independent effect on diabetes."