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Sweetened beverage taxes: Economic benefits and costs according to household income

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  • Jones-Smith, Jessica C.
  • Knox, Melissa A.
  • Coe, Norma B.
  • Walkinshaw, Lina P.
  • Schoof, John
  • Hamilton, Deven
  • Hurvitz, Philip M.
  • Krieger, James

Abstract

Taxing sweetened beverages has emerged as an important and effective policy for addressing their overconsumption. However, taxes may place a greater economic burden on people with lower incomes. We assess the degree to which sweetened beverage taxes in three large US cities placed an inequitable burden on populations with lower incomes by assessing spending on beverage taxes by income after taxes have been implemented, as well as any net transfer of funds towards lower income populations once allocation of tax revenue is considered. We find that while lower income populations pay a higher percentage of their income in beverage taxes, there is no difference in absolute spending on beverage taxes per capita, and that there is a sizable net transfer of funds towards programs targeting lower income populations. Thus, when considering both population-level taxes paid and sufficiently targeted allocations of tax revenues, a sweetened beverage tax may have characteristics of an equitable public policy.

Suggested Citation

  • Jones-Smith, Jessica C. & Knox, Melissa A. & Coe, Norma B. & Walkinshaw, Lina P. & Schoof, John & Hamilton, Deven & Hurvitz, Philip M. & Krieger, James, 2022. "Sweetened beverage taxes: Economic benefits and costs according to household income," Food Policy, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:jfpoli:v:110:y:2022:i:c:s0306919222000574
    DOI: 10.1016/j.foodpol.2022.102277
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    References listed on IDEAS

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    1. Cawley, John & Frisvold, David, 2023. "Review: Taxes on sugar-sweetened beverages: Political economy, and effects on prices, purchases, and consumption," Food Policy, Elsevier, vol. 117(C).

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