Researchers from Tufts and Harvard conducted a modeling study to estimate the health and economic impacts of a national sugary drink tax. They examined three different ways of structuring the tax: (1) a uniform tax based on volume ($0.01/oz); (2) a uniform tax based on sugar content ($0.01 per teaspoon of added sugars), and (3) a tiered tax (<5 g of added sugars/8 oz: no tax; 5-20 g/8 oz: $0.01/oz; and >20 g/8 oz: $0.02/oz). Sugary drinks were defined as juice drinks, sports drinks, pre-sweetened iced tea or coffee, soft drinks/sodas, and electrolyte replacement drinks with 5 or more grams of added sugars per 12 ounces.

Key Findings:

Over a lifetime, a national sugary drink tax would generate substantial revenue and health gains.

The simulation found that, compared to the status quo, over a lifetime, a uniform volume-based tax could:

• prevent 850,000 cases of heart disease;

• prevent 269,000 cases of diabetes;

• generate $80.4 billion in tax revenue; and

• save $53.2 billion in net health care costs.

However, the tiered and uniform tax by sugar content structures could doublethose gains.

In the simulation model, a tiered tax would:

• prevent 1.67 million cases of heart disease;

• prevent 531,000 diabetes cases;

• generate $142 billion in tax revenue;

• gain 4.85 million quality-adjusted life years across the population; and

• save $105 billion in net health care costs.

Similarly, the simulation estimated that a uniform tax by sugar content would:

• prevent 1.8 million CVD events;  

• prevent 550,000 diabetes cases;

• generate about $42 billion in tax revenue; and

• save $105 billion in net health care costs.

These health and economic gains were also seen under a variety of scenarios tested, including whether the tax had less than a full pass-through rate or over a shorter time period (10 years).

More importantly, the health gains were largest for young adults (ages 35-44 years), Black and Latinx consumers, and persons with low income.

In the U.S., all current local sugary drink taxes are volume-based, but tiered and sugar-based taxes have been implemented in other parts of the world. The American Heart Association supports all three options as a way that states or communities can encourage changes in consumer behavior and urge the industry to reformulate its products to have less added sugars.