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Cost Effectiveness of a Sugar-Sweetened Beverage Excise Tax in the U.S.

October 2015

Michael W. Long, Steven L. Gortmaker, Zachary J. Ward, Stephen C. Resch


The article attempts to estimate the effects of a nation-wide excise tax on sugar-sweetened beverages. The article examines effects of taxes of this sort on states that have adopted them as well as other countries. The study estimates that a 1 cent per ounce tax on sugar-sweetened drinks would cost approximately $51 in implementation costs but ultimately lead to 12.5 billion per year in tax revenues and reduce consumption by approximately 20%. The study also suggests that the tax would reduce healthcare spending significantly and increase quality of life for many Americans. It was addressed that a tax of this sort would be regressive, but the regressivity could be offset by progressive healthcare spending.

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Policy Implications

The article can be used to help formulate a tax on sugar-sweetened drinks, not only at the federal level, but state and local as well. The study estimates that this is one of the lowest cost options to increase health outcomes this substantially. The methods used in this study however, can be applied more broadly or more specifically to include different varieties of unhealthy items.

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