Could a Soda Tax Save Lives?

At 12 cents a can, revenue from a soda tax would add up quickly.

​In April last year, the California state Assembly Committee on Revenue and Taxation shot down AB 669, Assemblymember Bill Monning's attempt to pass a penny-per-ounce tax on all sweetened beverages, such as sodas, energy drinks, and sweetened fruit-juice drinks. Monning's office estimated that the tax, which would be paid by distributors, would raise $1.7 billion every year for a children's health fund and would spur people to drink less soda. Now researchers from UCSF and Columbia University say a one-cent-per-ounce soda tax would save lives, too. Their article, published in this month's issue of Health Affairs, uses several mathematical models to predict that a national soda tax wouldn't just raise $13 billion a year in revenue but $17 billion in savings from reductions in diabetes and obesity.


Calculating that a federal soda tax would cause people to drink 15 percent less soda and that they'd replace only 40 percent of those calories with additional food or drinks, the researchers estimated that the tax "would reduce new cases of diabetes by 2.6 percent and the prevalence of obesity by 1.5 percent. Although small, these percentage reductions would, over the course of ten years, result in 95,000 fewer instances of coronary heart disease, 8,000 fewer strokes, [and] 26,000 fewer premature deaths." And if the tax disproportionately affects the poor, all the better, the researchers say; that's the income group with the highest rates of diabetes and obesity.

Why such a big tax -- close to 20 percent on some beverages? Because other studies have shown that smaller soda taxes don't change behavior.

These figures, of course, are based on mountains of speculation. Would raising the cost of a 20-ounce bottle of soda by 20 cents really cause people to buy 15 percent less? Sodas are heavy profit-generating drinks; why wouldn't producers just suck up some of the cost of the tax, encouraging people to keep buying? And would former soda drinkers only compensate for 40 percent of the calories they've just saved with other drinks and snacks?