Sticky Business: Will Taxes on Sugary Sodas Help to Dilute America’s Cardiometabolic Crisis?

US cities are slapping taxes on sugar-sweetened drinks, supported by the AHA. Some observers say the predicted health benefits are tough to swallow.

Sticky Business: Will Taxes on Sugary Sodas Help to Dilute America’s Cardiometabolic Crisis?

Doctors’ advisories and healthy eating campaigns have had little impact on America’s sweet tooth, prompting groups like the American Heart Association (AHA) to push for taxes on sugary drinks. Over the past 5 years, more than half a dozen US cities have implemented so-called “soda taxes” in the hopes of decreasing sugar consumption and incentivizing healthier habits. Countries like Mexico, Chile, and the United Kingdom have also passed nationwide levies on sweetened beverages.

Most of the research to date suggests that these taxes do help trim back spending on sugary drinks, but whether the trends will be sustained, the laws upheld, and the people most at risk effectively targeted remains unknown. And at the heart of the matter is the central question: will slimming down the waistlines—and wallets—of consumers ultimately reduce the incidence of cardiometabolic diseases? TCTMD set out to look for answers.

Scope of the Problem

It is no secret that Americans consume far too much sugar on a daily basis. Sugar-sweetened beverages, such as soda and sports or energy drinks, are the largest single source of added sugar in the American diet, providing 27% of the total. Including fruit drinks other than 100% juice, that percentage climbs to 40% of added sugar.

The National Center for Health Statistics estimates that, on average, sugary drinks contribute 145 calories to what Americans consume each day. Nearly 63% of youths aged 2-19 and 49% of adults have at least one of these beverages daily. Moreover, 10.5% of youths and 7.5% of adults have at least three or more daily.

Consuming these types of sweetened beverages provides no nutritional benefit, making them an ideal target for public-health campaigns, Jim Krieger, MD, MPH, executive director of Healthy Food America, told TCTMD. The organization works to influence health policy by encouraging nutritious eating. “They have no nutritional value, period, whereas other sweet foods, even if they contain sugar, salt or fat, they also have protein potentially, and other nutrients,” he said. “Sugary drinks have no other nutrients, so there is no nutritional benefit from consuming them.”

Berkeley, CA, became the first city in the United States to pass a tax on sugary beverages in 2014. Three other California cities, San Francisco, Oakland, and Albany, followed suit in 2016. Other cities around the country, including Seattle and Philadelphia, have also implemented soda taxes in the hope of curbing consumption.

Dariush Mozaffarian
Dariush Mozaffarian, MD

“It’s one of the emerging signs that the public and policy makers recognize that the government has a role in making the food supply safe,” Dariush Mozaffarian, MD (Tufts Friedman School of Nutrition Science and Policy, Boston, MA), told TCTMD. “I say that because our food supply is the only part of our economy that I can think of where we have products that are knowingly harming people that we allow on the market,” he added.

 

Health Effects of Sugar-Sweetened Beverages

The link between sugary drinks and weight gain is well established. One meta-analysis of over 120,870 nonobese adults found that every 12-ounce sugar-sweetened beverage consumed was associated with an additional 1.1-pound increase in weight over 4 years. This effect was evident even after adjusting for confounding factors, such as sedentary lifestyle, smoking, and other dietary habits.

In another study that combined data from nearly 70 trials, groups who increased their intake of sugars gained an average of 0.75 kilograms over 2- to 6-month intervention periods, while groups that decreased intake of dietary sugars lost roughly the same amount over the same period. Additionally, children with higher sugar-sweetened beverage intake were 55% more likely to be become overweight or obese compared to children who drank little to no sugar-sweetened beverages.

Our food supply is the only part of our economy that I can think of where we have products that are knowingly harming people that we allow on the market. Dariush Mozaffarian

But while increased weight from sugar consumption is perhaps the most obvious link with an increased risk of cardiac disease, that is not the whole story, Frank Hu, MD, PhD (Harvard T.H. Chan School of Public Health, Boston, MA), told TCTMD.

“Obesity is certainly one of the pathways through which sugary beverage increase risk of cardiovascular disease, but what we have found is even after adjusting for [body mass index], is there is still a significant positive relationship between sugary beverages and the risk of cardiovascular disease,” he said. “This indicates that empty calories or obesity are not the whole story, and there are other potential biological mechanisms through which sugar-sweetened beverages influence risk of cardiovascular disease.”

For example, Hu said, consumption of sugar-sweetened beverages has also been linked to increased insulin resistance and dyslipidemia. One analysis combining 11 studies and over 310,800 individuals found that people who consumed one to two servings of these beverages daily had a 26% higher risk of developing type 2 diabetes compared to those who had less than one serving per month.

“Although sugar-sweetened beverages increase risk of metabolic syndrome and type 2 diabetes, in part because of their contribution to weight gain, an independent effect may also stem from the high levels of rapidly absorbable carbohydrates in the form of added sugars, which are used to flavor these beverages,” the authors of that analysis concluded.

Research has also tied sugary-beverage consumption to coronary heart disease: in a long-running study of over 88,500 women, individuals who consumed over two servings of these drinks daily had a significant 35% greater risk of CHD compared to infrequent consumers. In adults over 45, individuals who drank over 24 ounces of sugar-sweetened beverages daily had twice the risk of death due to CHD compared to participants with little to no consumption.

Taxing Soda to Curb Consumption

But will using taxation to curb consumption actually reduce adverse cardiometabolic outcomes? Organizations like the AHA and the American Diabetes Association think the answer to that question is yes and have been strong supporters of soda taxes. These groups, and others, point to previous successes in taxing tobacco to decrease consumption. In 1965, 42% of adults smoked cigarettes; cigarette taxes were implemented nationwide in 1969, and these taxes were further increased in 2009 under the Children’s Health Insurance Reauthorization Act. By 2014, the US Centers for Disease Control and Prevention estimated that the proportion of US adults who smoke had dropped to 16.8%.

Erin Michos, MD
Erin Michos, MD

“One of the best examples of taxation on a product for the goal of improving public health is the tobacco tax,” Erin Michos, MD, MHS (John Hopkins University School of Medicine, Baltimore, MD), told TCTMD. “Because it worked for tobacco, I think it will work for sugary-sweetened beverages as well.”

Indeed, early research indicates that sugary-drink taxes similarly curb consumption. Mexico implemented a nationwide tax of 1 peso per liter (roughly 5 cents per liter) at the beginning of 2014. By the end of the year, researchers found consumption of sugar-sweetened beverages decreased 5.5%, and in 2015, consumption dropped an additional 9.7%.

Sugary-beverage taxes also had an even larger effect in Chile, where the monthly purchased volume of SSB dropped by 21.6%. In Berkeley, purchases of sugary-sweetened beverages decreased by 9.6%, while water purchases increased 15.6%.

In US jurisdictions where soda taxes have been introduced, these have typically been excise taxes, where the tax is included in the price of the item. They are paid by the producers of these beverages and in US cities are generally 1 cent per ounce, though the per-ounce tax is 1.5-cent and 2-cents Philadelphia, PA, and Boulder, CO, respectively.

While the assumption has been that manufacturers, distributers, and stores will increase drink prices in response to the tax, research has suggested that just 20% to 67% of the soda tax in Berkeley was ultimately passed on to consumers.

Sales taxes are another approach. Rather than relying on companies to translate these taxes into price hikes, sales taxes are directly paid by the consumer. While not as common as excise taxes, countries such as Chile have used sales taxes on sugar-sweetened beverages to curb consumption. Beverages with a sugar concentration above 6.25 grams per 100 milliliters (roughly 14.8 grams per 8 ounces) faced a 18% tax rate, while beverages below that cutoff were taxed at 10%.

If someone is not aware of the tax, and they don't see the increased price on the shelf, it is not going to influence their decision. Kristen Madsen

The downside to these sales taxes, however, is they are only implemented at checkout, Kristen Madsen, MD, MPH (UC Berkeley School of Public Health, CA). “If someone is not aware of the tax, and they don't see the increased price on the shelf, it is not going to influence their decision,” she explained to TCTMD. “Unless they are paying attention, they may not even know [the increase] was attributed to the soda.”

A third type of tax is a variation on excise taxes, where sugary beverages are taxed at different levels depending on their sugar content. In the United Kingdom, which recently implemented a sugary-beverage tax in April, drinks with roughly 18 to 28 grams of sugar per 12-ounce can are taxed 9 cents per serving, while those above the 28-gram threshold are taxed 12 cents per serving.

Consequently, beverage companies have been reformulating their products to reduce sugar content and avoid this increase in tax. “Having a company reduce their sugar by 30 or 40 percent could be much bigger than the consumer response [to excise taxes],” Mozaffarian predicts.

Unanswered Questions

While the data show that these taxes do curb consumption, the real question is whether this decrease will lead to improved health. Additionally, some physicians and policy makers wonder whether these taxes will impact the individuals they are intending to target.

Sean Cash, PhD
Sean Cash, PhD

“Some of the research we have done on snack-food taxes strongly implies that the people who are going to respond most are the ones who perhaps we are least interested in reaching,” economist Sean Cash, PhD (Tufts Friedman School of Nutrition Science and Policy), told TCTMD. Often the people most likely to decrease sugary-beverage consumption in response to taxes are infrequent consumers or already motivated to change their behavior, he continued.

“If you were thinking, ‘Hey, I want to drink less soda,’ and a soda tax comes to your town, then that might be just the thing to push you over to drinking less, because you were already receptive to that, as you were already contemplating a behavioral change,” Cash added.

Taxation-based strategies also tend to target more educated populations, who may have more robust health and nutrition knowledge to begin with, Madsen noted.

In Chile, soda purchases decreased the most in households of higher socioeconomic status (SES), while there was no statistically significant change in soda consumption in low-SES homes. Higher-income households do tend to drink more soft drinks in Chile, lead author Ryota Nakamura, PhD (University of York, England), told TCTMD in an email, but the disparity between the two groups is still evident. “I would not say that the policy was fully successful alone,” he said. “Reducing socioeconomic inequality in health is an important part of public health policy, and the sugar-sweetened beverage tax in Chile did not appear to reduce the inequality.”

Kristen Madsen, MD, MPH
Kristen Madsen, MD, MPH

Data from Mexico, however, showed the opposite effect: lower-income households decreased their taxed-beverage consumption the most, compared to middle- and high-income households. Additionally, a study in Berkeley evaluating sugary-beverage consumption 4 months after implementation of the soda tax found that lower-income neighborhoods decreased daily intake of sugary beverages by 21% and drank more water, although the survey-based nature of the study may have muddied the results.

Additionally, it is not clear whether one less soda a day will have drastic health impacts, Robert Eckel, MD (University of Colorado Hospital, Aurora), told TCTMD. “I think people are going to adjust their calorie intake to maintain rather than keep off their reduced weight, although the benefit health-wise in terms of cardiovascular disease may be modest and transient,” he said, “The taxation itself, though it may reduce consumption, I think it’s going to be compensated for by other changes in behavior such as more food intake or less physical activity.”

Do These Taxes Unfairly Target the Poor?

One argument against these soda taxes is they disproportionately affect lower-income households. Since families of lower socioeconomic status tend to be higher consumers sugary beverages in the United States, it stands to reason that they would also bear the brunt of these taxes in their purchases. This is a key reason Senator Bernie Sanders (I-VT) opposed the tax in Philadelphia in 2016, believing it would be a financial burden to the city’s lowest-income individuals.

On the other hand, impact on lower-income families could be mitigated if revenue from these taxes goes back into lower-income communities through funding health and education programs, Krieger said.

Jim Krieger, MD, MPH
Jim Krieger, MD, MPH

“The taxes are a much broader progressive policy if the revenues that are raised are reinvested in low-income communities to address the exact diseases and problems that are caused by sugary drinks like diabetes or obesity or other important community needs like early childhood development,” Krieger told TCTMD. “That is exactly what has happened in all seven jurisdictions that have taxes now in the US—the revenues are being targeted and selectively reinvested in low-income communities to support healthy eating, physical activity, diabetes prevention programs, better school food, and access to early learning services.”

Mozaffarian also noted that these tax revenues should be used to provide subsidies for healthier foods, which would offset some of the economic burden. “That's what has been missing,” he said. “All of the soda taxes so far in the United States and even internationally are not paired to making healthy food cheaper. So that would be more than double the bang for your buck.”

Local Taxes May Not Be Enough

Ironically, the people whose behavior a tax is trying to change—frequent consumers of sweetened beverages—might be the least responsive, Cash noted. They will either continue to buy these drinks despite the price increase or avoid the tax altogether by buying groceries at the nearest town without a sugary-beverage tax in place, he said. This circumvention serves as a third option for consumers who don’t want to stop drinking soda but also refuse to pay more for the tax. “If you really love soda, you will have a stronger desire to maybe find a way of buying your soda without the tax,” he noted, “so maybe driving to the Costco the next town over—especially if that is something that is easy for you to do—is going to be your response rather than buying less of it or paying the tax.”

The taxes are a much broader progressive policy if the revenues that are raised are reinvested in low-income communities to address the exact diseases and problems that are caused by sugary drinks like diabetes or obesity or other important community needs like early childhood development. Jim Krieger

The data suggest that Berkeley soda drinkers may be doing this to some extent; sales of soda and other sugary drinks have increased 6.9% in cities surrounding Berkeley. This was a big tactic with consumers who opposed the now-repealed sugary-beverage tax in Cook County, which covers the general Chicago area. “Folks who were against the soda tax had social media campaigns where they were texting around and posting photos of their receipts [showing] whether they were being charged the tax,” he said. “That was actually part of the discussion there—people tweeting about avoiding the tax.”

That is another issue with these local taxes, Madsen said. If someone is able to drive just one town over to get their soda fix, that might not be enough to see impact. “If we really want to change consumer behavior, shouldn't we be thinking about larger geography?” she asked. “I'm very interested in data that looks at whether or not there are differences in the impact based on the size of the jurisdiction.”

Industry Opposition

Some of the largest challengers to these taxes are, of course, the American Beverage Association (ABA) as well as individual companies. In response to the growth of sugary-drink taxation, especially across California, they have begun backing legislation to prevent the spread of local taxes. In July, the ABA celebrated a victory when the California state government passed a bill, SB-872, preventing additional local taxes on nonalcoholic beverages or on any other groceries for the next 12 years. While previously implemented taxes will remain in place, no additional towns or cities in California can implement a sugary-drink tax until December 2030.

Sticky Business: Will Taxes on Sugary Sodas Help to Dilute America’s Cardiometabolic Crisis?  Many people believe the California government was strong-armed into passing this bill. Prior to the vote on SB-872, beverage companies spent millions of dollars backing a ballot initiative proposing a two-thirds majority, rather than a simple majority, to be necessary to pass any local tax legislation across California. This would make it difficult for any tax increases to move forward in the future. In exchange for passing the local tax ban on “groceries,” the companies agreed to drop the ballot initiative.

“With all the work that the [AHA] and other organizations have done to try to raise awareness about the health concerns for sugary drinks, it was really a disappointment to see the governor sign the bill,” David Lee, MD, president of the AHA Western States Affiliate.

In response to this legislation, however, the California Medical Association and California Dental Association proposed placing a new bill to implement soda taxes across California on the 2020 ballot.

“Probably, it will come around that industry will have a short-term victory, but a long-term loss from that,” Krieger said, “but the bottom line is the industry is doing whatever it takes to try to prevent taxes—just like big tobacco—to block adoption of a very important and effective health strategy.”

Tip of the Iceberg

These taxes may be a step in the right direction, but taxes alone will not solve the obesity problem, stressed many of the experts interviewed by TCTMD. “Taxes are a blunt tool for what is actually a fairly complicated problem, which is diet,” Cash said. While 40% of added sugars come from soft drinks and other sugar-sweetened beverages, most of added sugars come from elsewhere. Additionally, calories saved through decreasing sugary-beverage consumption could end up being replaced with other foods.

“I opine that if you reduce soda consumption by teenagers, young adults or even older adults that they are going to compensate for that with other food,” Eckel said. “Now let's say they don't—that ultimately we take 75 to 150 calories away in the form of sodas, and they don't compensate. Well, that is going to be a modest weight reduction, and when people start losing weight you don't maintain that weight loss until you really own a dietary and physical activity approach that allows for that weight loss to continue.”

We need to make it easier to access good-quality food: perhaps supplement the cost of whole fruits and vegetables for those at financial risk and make it harder or less attractive to have access to the stuff that has no health benefits. Erin Michos

Many researchers, however, say the benefits of reducing consumption go beyond cutting excess calories to decreasing risk of diabetes and heart disease. Additionally, replacing these beverages is a relatively easy step for consumers, Mozaffarian noted. “It's pretty easy to replace them with either seltzer water or artificial sweeteners or natural low-caloric sweeteners, so it's kind of an obvious next step,” he said. “But it’s not a panacea—it's not the end all and be all of food policy.”

In the end, these taxes should be one of an array of interventions focused on improving public access to healthy choices, Michos believes. “Just telling patients to eat healthier and exercise more is not enough,” she said in an email. “There is too much easy access to poor-quality foodsprocessed foods and sugary beverages. Access to addictive junk food is too easy. Rather, we need to make it easier to access good-quality food: perhaps supplement the cost of whole fruits and vegetables for those at financial risk and make it harder or less attractive to have access to the stuff that has no health benefits.

Disclosures
  • Cash, Eckel, Hu, Madsen, Michos and Nakamura report no relevant conflicts of interest.
  • Krieger reports serving as a volunteer member of the sugary-beverage community advisory board that makes recommendations to Seattle, WA, about use of tax revenues, but receives no compensation or support from the revenues.

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