Obesity rates have increased dramatically over the past 30 years, becoming a national and global epidemic. In the United States, more than one in three adults are obese, and one in three children are considered overweight or obese.1,2 Obesity increases an individual's risk for the development of several chronic diseases, including cardiovascular disease, diabetes, hypertension, dyslipidemia, various types of cancer (colon, endometrial, and breast), sleep disturbances, liver disease, and arthritis. There are also several psychological issues associated with obesity, including depression, bullying, and discrimination.3,4 Individuals with an elevated body mass index (BMI) have a decreased quality of life.5
In addition, healthcare costs associated with obesity continue to rise. In 2008, the annual burden was nearly 10% of all medical healthcare expenses, or approximately $147 billion.6,7 According to the Centers for Disease Control and Prevention (CDC), the obese population per capita incurred medical expenses of $1,429 greater than normal weight individuals in 2006.1
One reported cause of obesity is the consumption of sugar-sweetened beverages (SSBs).8 During 2009, 13.8 billion gallons of sugary beverages were consumed.9 In many areas of the country, legislators and public health professionals have been discussing imposing a variety of policies to reduce consumption, including taxing SSBs. This article presents the arguments supporting and opposing a beverage tax. Proponents for taxation of SSBs agree that revenue will be generated to educate the general population, decreased obesity rates will lead to lower healthcare costs, and general healthcare morbidities associated with obesity will be lowered, leading to greater life expectancy. Opponents report the tax would be regressive, causing an increased financial strain on the poor. Opponents also suggest that purchasers of SSBs will simply alter their diets by consuming other energy-dense foods, minimizing the potential impact the tax will have on obesity rates.
Obesity is an ongoing epidemic in the United States. Its prevalence has increased dramatically over the past 30 years. The causes of obesity are multifaceted in nature. Increased caloric intake, sedentary lifestyle, excess electronic/multimedia use, being a member of specific minority groups (Black and Hispanic), living in lower socioeconomic households, increasing prices of fresh fruits and vegetables compared to less-nutritious, high-energy-dense foods, and residing in rural regions have all been associated with increased obesity rates.10–12 The consumption of soft drinks and other SSBs has been proposed as a major contributor toward this epidemic. A meta-analysis by Brownell et al. reported that longitudinal studies funded from outside the beverage industry showed a stronger association between the ingestion of SSBs and increased BMI.8
The consumption of soft drinks and other SSBs has increased nearly 500% in the last five decades.13 The average household consumes over 94 gallons of nonalcoholic beverages annually, of which 45 gallons are SSBs. This represents 15.8 fl oz (467.3 mL) of SSBs consumed per capita daily.14 It is estimated that anywhere between 7% and 10% of an individual's daily energy intake is coming from SSB consumption.15,16 The CDC reports that adolescents consume 11% of their daily caloric needs from SSBs, while adults consume approximately 9% of daily caloric needs from SSBs.12 Nearly 80% of adolescents and 63% of adults consume SSBs daily. The Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamp Program, estimated that in 2011, recipients spent nearly $1.7 to $2.1 billion on SSBs in grocery stores alone.17
Excessive sugar consumption has a direct impact on uric acid levels, which elevate BP, raise triglycerides, and increase insulin resistance. This increased sugar consumption may lead to overproduction of dopamine in the brain, causing compensatory changes similar to nicotine and alcohol, which results in the need for additional intake.18 The amino acid ghrelin, which is synthesized within the gastrointestinal tract, may have a significant impact on hunger. Elevated levels may signal hunger. After a meal is consumed, the plasma levels of ghrelin decrease, the individual feels satiated, and is no longer hungry. The consumption of SSBs may not affect the ghrelin levels, allowing the levels to remain elevated. The body continues to recognize the elevated levels, which leads to the subsequent ingestion of additional calories.18,19
Proposed taxation for SSBs
In an attempt to curb excessive caloric intake, the American Medical Association has adopted a policy that supports the taxation of SSBs and plans to use the revenue to support obesity education in schools.20 Advocates for public health presented testimony in front of the Senate Finance Committee supporting the taxation of SSBs. They posited that this tax would decrease obesity rates and generate revenue that could be used to finance new healthcare reform.21 There was also a recommendation by the White House Task Force on Childhood Obesity to study the effects of a tax on energy-dense foods, including SSBs.22
Current tax rates
The majority of states currently tax sodas and other SSBs. This tax rate has been reported as modest, averaging 5.2%.23 Some states impose a tax as little as 2%, while others have rates as high as 7%.22 Unfortunately, the current tax rates have done little to slow the obesity epidemic. Arkansas, Tennessee, Virginia, and West Virginia have gone beyond the routine sales tax by implementing an excise tax on soda. According to the CDC,1 obesity rates in these states are 30.1%, 30.8%, 26.0%, and 32.5%, respectively. Of note, no states reported obesity rates higher than 30% in 2000.1
Type of taxation
There have been times throughout history when the government has intervened for the benefit of society. This includes administrating vaccinations to school children, the introduction of Medicare to assist with healthcare expenses, and more recently, the Affordable Care Act. Now, government assistance to curb the obesity problem may also include the use of taxes.25 Although sales taxes are the most common form of taxation and would reportedly generate ample revenue to fund obesity educational programs, they may do little to dissuade the purchase of SSBs. Sales taxes are not added until the customers are checking out and paying for their goods. Many may be unaware of the amount of tax being added to their purchases. The use of a sales tax may also encourage consumers to purchase in bulk or opt for cheaper brands rather than keep them from buying SSBs.26
An excise tax would be another option for taxing SSBs. An excise tax could be placed on the amount of sugar added to a beverage, or it could be based on the volume or number of ounces per SSB sold. Consumers may be unaware that the increase is the result of an excise tax but will be aware they are paying more for a product. The higher price may cause some consumers to purchase less of the product, much like the taxation on tobacco products helped to decrease its use.
Brownell et al. estimated that a penny-per-ounce excise tax could generate as much as $14.9 billion the first year alone if implemented nationally.8 A tax revenue of $79 billion could have been generated between 2010 and 2015.14 This is an impressive total considering Beverage Digest reported that total sales of soda and other SSBs for 2009 was $115 billion. These figures would depend on the beverages' own price elasticity. It is suggested that the price elasticity would be -0.8 to -1.0, or for every 10% increase in the tax of sugary beverages, there would be an 8% to 10% reduction in its consumption. A study in Ireland from the 1980s found that for every 10% increase in price, there was an 11% decrease in soda consumption.25
Economic Research Services posited that a 20% tax on beverages purchased in stores and restaurants could decrease consumption by 37 calories per day for adults, which is the equivalent of 3.8 lb (1.7 kg) per year. The change for children would be 43 calories per day or 4.5 lb (2 kg) per year. This would result in obesity rates dropping from 33.4% to 30.4% in adults and decreasing the prevalence in children (at or above the 85th percentile) from 32.3% to 27%.27
According to Brownell and Frieden,26 a tax increase of one-penny-per-ounce may reduce consumption by as much as 13%. Taking into consideration that some individuals may replace sugary drinks with other food choices, total calorie intake may be reduced by about 8,000 kilocalories per year. This would equate to slightly more than 2 lb (0.9 kg) for the typical consumer. The overall risk of obesity and other comorbid conditions would be expected to decline. Andreyeva et al.14 reported the weight loss could be as significant as 5 lb (2.3 kg) per year.
One 18-month, randomized control trial conducted in the Netherlands studied more than 600 children between the ages of 4 and 12 who were randomly assigned to receive 8 fl oz (236.6 mL) of a sugar-free beverage (sugar-free group) or a 104-calorie sugar-containing beverage (sugar group) per day.28 At the conclusion of the study, the children were weighed, and there was a recorded increase of 16.2 lb (7.35 kg) in the sugar group compared to 14 lb (6.35 kg) in the sugar-free group (95% confidence interval for the difference). The study concluded that replacement of a sugary beverage with a nonsugary beverage significantly reduced the rate of weight gain in children with a normal BMI.
The use of high excise taxes on tobacco products to reduce cigarette smoking is a contributing factor for the initiation of a similar tax on SSBs.26 The use of large taxes on tobacco products is touted as the single most effective strategy at reducing smoking habits. These taxes generate a significant amount of revenue and are seen as a primary reason for getting current users to quit smoking, preventing youth from starting to use tobacco products, and preventing prior users from restarting their old habit.29
Disadvantages of SSB taxation
Soda taxes have previously been implemented in the United States dating back to the World War I tax package, which was to be used to fund support for the war effort.24 Although the amount of tax has been considerably low, the increasing consumption of SSBs has shown that a tax system may not be as effective as anticipated.
According to Mytton et al., observational data show that food purchases are relatively inelastic to price changes. While some food sales may decline, other equivalent product sales (substitutes) increase.25
An excise tax on SSBs may be regressive. A regressive tax is one in which families of lower socioeconomic status pay a higher percentage of their income toward taxes compared to higher income families.26 A family earning $200,000 and a family earning $20,000 both pay $100 annually in an excise soda tax; the percentage of annual income for the lower-income family will be higher. This reduces the availability of accessible income to support the poorer family with other expenses, such as purchasing healthier food choices. The decreased available income again leads to the purchase of other cheaper, high-energy-dense foods.
There are several studies proposing the potential weight loss of consumers who decrease their consumption of SSBs. The study by Andreyeva et al. reported a potential significant weight loss by consumers as a result of an imposed excise tax but admittedly did not take into consideration food and drink substitutions by consumers.14 Failure to consider these substitutions may skew results and alter the weight loss and success of an excise tax.
Manufacturers and suppliers may have an option to absorb some of the excise tax, and only pass a small percentage of it along to consumers. Compromised sales could lead to smaller increases in the price of certain products. The beverage manufacturer could also distribute the tax evenly across several products to minimize the purchasing strain placed on their customers and to keep profits at acceptable levels.22,27 Both of these options would continue to generate revenue for obesity education, but the primary purpose of the tax–to have a significant impact on obesity rates–would be severely compromised.
SNAP assists over 21 million households or approximately 15% of the population and helps maintain adequate nutritional intake.17 Many recipients are financially drawn to energy-dense foods to meet the caloric requirements of their families. SNAP recipients consume more SSBs than the general population. Although SNAP recipients do not pay sales tax, if an excise tax is passed on to consumers, it may have an impact on their purchasing power, or may alter their purchases toward other energy-dense foods/beverages. This is referred to as cross-price elasticity, and it occurs when the price of one product (SSB) increases, leading to a higher demand for other substitute products.25 Fruit juice and whole milk are considered substitutes for soda, and both have been associated with increased obesity rates. Wojcicki and Heyman report that an increase in sucrose without the fiber present in the whole fruit is a clinical factor leading to obesity, liver injury, and metabolic syndrome.30 One hundred percent fruit juice would likely be exempt from an SSB tax.
The beverage industry, like the tobacco industry, has ample funding to continue advertising across various venues. When New York attempted to implement an 18% sales tax on SSBs, PepsiCo threatened to move its corporate headquarters.8 This move could have resulted in numerous job losses as well as lost revenue for the state.
According to the CDC, Morbidity and Mortality Weekly Report, states collected $243.8 billion in excise taxes and revenue generated from tobacco settlements.31 Of this, only $8.1 billion was appropriated by state and federal agencies to control tobacco use. This was only 27.7% of what the CDC recommended for best practices to significantly reduce tobacco-related illnesses. Even with the implementation of the tobacco excise tax, there are an estimated 46 million smokers in the United States, resulting in 443,000 tobacco-related deaths annually. There is no evidence to support that an excise tax on SSBs would have significantly different results.
Obesity rates have escalated over the past 30 years. Without the implementation of drastic interventions, there is likely to be no slowing in the increasing obesity rates of the U.S. population. The implementation of an SSB tax has been proposed as one such implementation to dissuade consumers from overindulging in excessive caloric consumption. The true effect of taxing SSBs will remain unknown until actually implemented. Whether the tax is designed to reduce consumer consumption or generate revenue, it will ultimately be the consumer that will decide its success. A tax may decrease the number of daily calories ingested from sugary drinks or simply force consumers to purchase alternate products.
Taxing sugary drinks should not be seen as the sole answer to this nation's battle with weight. No single strategy addresses all of the causative factors in the obesity epidemic. This includes the proposed tax on SSBs. Perhaps the answer lies in a collaborative effort, including the following:
- revenue generated to fund education
- making healthier foods more affordable
- promoting the value and benefit of physical activity
- promoting personal, autonomous behaviors that will remain throughout life.
Giving consumers the tools necessary to make healthy choices and support personal accountability is paramount to the health of the public. This could be accomplished through the use of various multimedia venues. Educators could utilize TV and radio ads to discuss the negative consequences of SSBs. Internet advertising on prominent sites, including Facebook, Twitter, and other social media outlets, could promote physical activity. These sites could discuss the health benefits of water consumption, exercise, and review potential consequences of unhealthy dietary patterns. Schools should remove all soda machines and replace them with economical and readily available water dispensers.
Although governmental interventions have had some success in curbing unhealthy behaviors in the past, it is the responsibility of the healthcare industry to educate patients on diet and exercise. As the number of nurse practitioners (NPs) continues to expand, the educational opportunities become almost endless. Whether working in an acute care setting, long-term-care facility, an office setting, or even a retail clinic, the NP should take every opportunity to discuss the dietary and physical activity patterns of their patients. The NP should also provide any necessary resources, including nutritional counseling and nutritional referrals. By addressing this epidemic with patients, the overall physical, emotional, and psychological health of this population will flourish.
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