New Rudd Center Study Backs Soft Drink Tax

Yale University’s Rudd Center for Food Policy and Obesity has released a new study claiming that “a penny per ounce” tax on sugar sweetened beverages “has the potential to reduce consumption and generate significant revenue.” Tatiana Andreyeva, et al., “Estimating the potential of taxes on sugar-sweetened beverages to reduce consumption and generate revenue,” Preventive Medicine, April 2011. To estimate revenues from an excise tax on sugar-sweetened beverages, the study’s authors evidently constructed “a model projecting beverage consumption and tax revenues based on best available data on regional beverage consumption, historic trends and recent estimates of the price elasticity on sugar-sweetened beverage demand.”

Using this model, the authors described the public health impact of beverage
taxes as “substantial,” estimating that a penny-per-ounce tax would reduce
sugar-sweetened beverage consumption by 24 percent and lower “the daily
per capita caloric intake from sugar-sweetened beverages from the current
190-200 cal to 145-150 cal, if there is no substitution to other caloric beverages
or food.” They also found that a national penny-per-ounce tax “could
generate new tax revenue of $79 billion over 2010-2015.” The paper concludes
that “a modest tax on sugar-sweetened beverages could both raise significant
revenues and improve public health by reducing obesity.”