Soda Pop: To Tax or Not To Tax?

One piece of diet advice I dole out on a regular basis is, “if you love to eat, don’t drink your calories!”  The reason I discourage people from drinking calories is because beverage calories tend to be easier to give up and some people consume so many calories from soda that if they cut back, they could probably eat more food and still save calories.  I have actually seen patients with a 2+ a day soda habit lose 5-10 pounds from making the one simple change of kicking the soda habit.

Sugar-sweetened beverages which include sodas, fruit drinks, and other soft drinks have no nutritional value.  Even the vitamins in juice are not worth the calories, especially when sugar or high-fructose corn syrup is added.  Even 100% juice is rarely the healthiest source of vitamins given that you can get 100% of your daily vitamin C from a supplement and save about 200 calories.  The even worse news about soda is that consumption is associated with increased risk for obesity and type 2 diabetes, especially among children.  Among adolescents, soda accounts for about 10% of total calorie intake.  This means complete elimination of sodas could have a tremendous impact on population rates of obesity and type 2 diabetes.  The elimination of such beverages from the American diet is unlikely to happen, but as a country we might need to rein it in a bit, guys.

One measure put forth to reduce intake of sodas is to tax them.  Soda and other sugary beverages tend to be pretty inexpensive (although not as inexpensive as good old fashioned H2O—unless you buy your H20…more on this later).  The thinking is that if the tax were high enough, people would purchase the much cheaper low or no sugar beverages (diet sodas, milk) or simply drink water instead, thereby reducing soda consumption and perhaps waistlines as a result.  In a rare show of fence sitting, I am going to play out both PRO and CON sides of the debate for you and let you decide for yourself.


1.       The strongest case for the soda tax is the stunning success of other similar taxes, the tobacco tax and the alcohol tax.  Smoking rates fell from 23.2% to 2.6% in California from 1965-2007, coinciding with tobacco taxing.  As a leader in tobacco tax, lung cancer rates in California also dropped 25% compared to the rest of the country.  Alcohol taxing has also been associated with reduced rates of alcohol-related disease and death.  These outcomes are extremely compelling.

2.       One purpose of the tax is to channel it toward obesity prevention programs, subsidies for healthy foods and nutrition programs.  This has been the case for tobacco taxes as well, funds go toward anti-smoking public health campaigns including statewide quitlines which have been very effective in further reducing smoking rates.  This means the tax itself affects smoking rates and the programs it funds has an even further impact.  At this time, national obesity prevention campaigns and services are needed.  A tax of 18% in New York was projected to bring in $400 million in the first year.  That’s a lot of soda.

3.       Placing a tax on sodas will raise the demand for healthier beverages by beverage companies, who may end up reformulating their products or offering new, healthier products.  Consumers will get more choices and healthier choices will be incentivized.


1.       Thirty three states now have taxes on sodas but no evidence currently exists that taxes have impacted consumption. It is suggested that taxes have been too small to impact consumption.  Larger taxes are being considered in many states.  The problem is we do not know how large a tax needs to be to be effective.  Statistical models project that 20% tax would have an effect, but this has not been tested.  More evidence of the amount of tax is needed and whether that amount is feasible.

2.       Taxing food may have very different results behaviorally than cigarette and/or alcohol taxes.  First, abstinence is not an option, so people will end up switching to a different beverage, not quitting drinking. But what?  Research is needed to explore how the rest of diet changes as a result of people shifting away from sodas.  A “sugar correction” might occur elsewhere (e.g., instead of a soda, you now buy a bottle of water and a candy bar).  In Europe, alcoholic beverages called, Alcopops, were taxed to discourage consumption in young adults.  Guess what happened?  They ended up buying other forms of alcohol that were not subject to a tax.

3.       The soda market may change in ways that are not in the direction of good health.  For example, companies might create lower sugar formulations that do not reach the threshold of getting taxed, but end up being consumed in larger quantities by consumers to achieve the same sugar consumption.  One finding among smokers of “light” cigarettes is that they smoke harder and deeper and end up getting the same amount of nicotine into their blood for their efforts. Another possibility is a proliferation of flavored drink powder packets that we can add to any bottle of water.  These skirt the tax laws, but allow the consumer to have his sugar and eat it too.

4.       The tax may increase the consumption of diet sodas.  This will spare sugar consumption but there is some evidence that sugar substitutes in diet beverages actually increase sugar cravings and sugar intake, and that diet beverage consumption is associated with obesity itself.


5.       The ideal scenario is that people switch from sodas to water.  However, we must keep in mind that while soda is cheap, water is free.  The cost differential between soda and water is already quite steep.  A soda tax will have a relatively small impact on the magnitude of the cost differential, except in the case of bottled water.  However, don’t let soda companies fool you into buying water, 50% of bottled water is municipal water that is put through a filter just like your filter at home.

The reality:  The soda tax is probably coming and sodas will become more expensive.  I think the most likely impact on health will be from programs and initiatives funded by the tax, rather than a direct impact of the tax itself.  Funding for nutrition and obesity prevention programs would be a good thing.  Let’s hope that is where the money ends up going though.

Tax or no tax, my advice remains… if you like to eat, don’t drink your calories.

For more on soda tax see the Yale Rudd Center for Food Policy and Obesity report on soda taxes.

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  1. Tremalien says:

    First I want to say that your advice is spot on. Whenever I want to start cutting calories the first thing to go is my sugary beverages. It’s amazing how many calories you can cut by drinking water instead of soda.

    As for the tax, I’m a touch weary. It starts with taxing soda but where does it stop. How long until they start taxing my Nutter Butters?

    Also, with the cheap cost of Kool-Aid and a cup of sugar, I don’t think taxing soda will cut down sugar consumption, I think it will just cut down on soda consumption.

    So if they are doing it on hopes of reducing obesity I think it’s a bust. If they are doing it to raise more state revenue they should just legalize and tax marijuana.

  2. John Pagoto says:

    Absolutely!! Extra Taxes for Soda Pop would be a great way to raise funds cash straped states like Michigan! Are you hearing this Govenor Ricky? I would include so-called Energy Drinks in the mix too! Tax them regardless if they are carbonated or not so they can’t slip under the radar.

  3. Scott says:

    Tax the shite out of it.

  4. Barb, RN says:

    I don’t think taxing would help. People will still drink soda pop.They can’t tax everything that’s bad for you.A person just needs willpower to avoid bad foods. I went to a class once given by a diabetes instructor. She showed us a plastic cola bottle with sugar in it.The sugar filled about a third of the bottle. She said that was how much sugar was in regular cola. It was nauseating. Never felt like drinking regular cola again.

  5. Mike B says:

    as i stated before, Sherry has helped me get healthier. One of the first things she did for me was to cut out the drinking of my calories. I was one of those 2+ sodas a day plus juice. That change alone has helped a lot over the long haul, and now when i have a coke (not often) I enjoy it and a can is almost to much to drink in a sitting.

  6. Mark Harmel says:

    Add the penny-per-once tax and see what it does for SSB consumption. We need to try experiments to see what works.

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