Optional email code. As cities and states seek to address rising rates of heart disease, type 2 diabetes and obesity, many are looking to sugary drink taxes. Communities around the country are considering these taxes to raise revenues to address health, education and other important community needs; reduce consumption of an unhealthy product; and call attention to the health risks of sugary drinks. Interest in sugary drink taxes is not limited to the US — more than 35 nations across the globe have also adopted taxes. Seven cities and the Navajo Nation have implemented sugary drink taxes in the US. Dozens of countries across the globe also tax sugary drinks. Early evidence from Berkeley, CA and Mexico shows that taxes are successfully reducing consumption and sales of sugary drinks while increasing water consumption. They are raising substantial revenues that are being used to address important community needs. Revenue is earmarked for healthy food access and early childhood programs.
A sugary drink tax, soda tax, or sweetened beverage tax SBT    is a tax or surcharge food-related fiscal policy designed to reduce consumption of drinks with added sugar. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks. Advocates such as national medical associations and the World Health Organization promote the tax as an example of Pigovian taxation, aimed to discourage unhealthy diets and offset the growing economic costs of obesity. Tax design approaches include direct taxes on the product and indirect taxes. VAT value added tax is the most common type of tax and is also added on at the time of purchase, at an amount that is dependent on the value paid for the item. The amount of both VAT and sales tax are directly proportional to the amount of money paid for an item and do not consider the volume of food or drink. Most taxes on sugar-sweetened beverages SSBs are set volumetrically i.
See More Publications Like This. Sugary Drink Taxes. Excise taxes on sugary drinks have become increasingly common in recent years. In June , the Legislature passed a law prohibiting local governments from levying such taxes. The Legislature may now face two decisions. This report provides information and perspectives for the Legislature to consider as it weighs these choices. Sugary drink tax proponents tend to emphasize two goals: a fiscal goal of raising revenue and a policy goal of improving health. Defining the Tax Base. On one hand, policymakers could take a relatively aggressive approach by taxing a broad range of sugary drinks, maximizing potential health benefits. On the other hand, policymakers could take a relatively cautious approach by limiting the tax to drinks—such as soda—that provide no beneficial nutrients. Choosing the Type of Tax.