Junk Food Taxes: Do They Work?


The Navajo nation recently became the first place in the United States to impose a tax on junk food in an effort to address concerns about obesity in their communities. A “sin tax” to disincentivize the consumption of foods associated with health risks is not new, but it is gaining momentum as communities recognize the need to create food environments that are health promoting. So far, soda and sugar-sweetened beverages have been the primary targets.

Soda and sugar-sweetened beverages have been implicated as a major source of excess calories, leading to weight gain.  Nationally, Americans consume an average of 1 gallon of soda each week, or about 1000 calories completely void of nutrients.  Sugar-sweetened beverages account for roughly half of the 250-300 additional calories American are consuming compared to 60 years ago.  In response, taxes have been proposed in many states to discourage the purchase and consumption of sugar-sweetened beverages.  Thirty-four states currently have a sales tax imposed on soda sold in grocery stores, and 39 states tax vending machine sales.

The most prevalent argument in support of a sugar-sweetened beverage tax (SSB) is the effect on public health.  Health care costs for Americans with obesity are 36% higher than for Americans with a normal weight and prescription drug costs are 77 % higher.  Current estimates suggest a loss of $30 billion in productivity on the job each year due to lifestyle related health issues. Taxes are currently imposed on cigarettes and alcohol in an attempt limit their consumption and encourage healthy behavior.  Many public health advocates believe that a SSB tax would be reasonable and effective as well because consumers generally respond to higher prices by decreasing consumption.  The funds from taxes would ideally be used in nutrition and health education programs, and this is exactly what the Navajo nation plans to do.

The theory that increased price of SSB would reduce obesity rates is not currently well supported by the research.  Most taxes on soda are a sales tax that consumers do not see when they are making the purchase decision.  Current sales tax rates of 3-4% in participating states has not significantly affect the weight status of adolescents.  In addition, one study found only a 0.16% reduction in BMI in states with a sales tax on soda. Due to consumers’ propensity to substitute consumption choices, other studies show that any reduced soda consumption increases consumption of not only water, but milk, alcohol and juice.  Therefore, it is not clear that a tax on SSB would reduce BMI for overweight and obese individuals.

Current academic research fails however to present a holistic picture of the SSB tax, focusing specifically on weight loss.  While substitution of milk and juice for soda may not reduce weight, it will contribute necessary micronutrients that are typically inadequate to the diet of Americans like potassium, magnesium and calcium. We also know that BMI is not a strong indicator of health, as people with BMI scores in the overweight and obese categories can achieve positive health outcomes through health-promoting lifestyles, while people in the normal BMI category are at risk of poor health outcomes if they pursue health-detracting lifestyles (HAES cite). Viewing the tax through a health-based evaluation paradigm, rather than a weight-based paradigm may show more desirable outcomes.

As suggested in the research studies, current sales tax rates are too low and not visible enough to significantly impact consumer choices.  A higher rate in the form of an excise tax is another way to influence SSB consumption.  One study suggests it would take a 10% increase in price to produce an 8% reduction in soda purchases.  An excise tax (included in shelf price vs. at the register) of this magnitude, might be a more effective strategy for directing consumers away from soda.  This is more than double the tax rate imposed in participating states, and 5 times that of the Navajo nation. Furthermore, the increased price would be visible at the point of selection (when purchasing decisions are made) rather than at the point of payment.

While taxes are not the comprehensive solution to changing health-detracting behaviors, they can help shape the food environment to be more health promoting. If the Navajo nation looks beyond weight-based measures of success to health-based measures, their policy for shaping the food environment may ultimately become a model for other places in the United States to emulate.


1. http://time.com/3762922/junk-food-tax-obesity-navajo-nation/

2. Pratt, Katherine. A Constructive Critique of Public Health Arguments for Antiobesity Soda Taxes and Food Taxes. Tulane Law Review [online]. 2012; 87 (1): 73-140. Available from: LexisNexis Academic.

3. Kiviat, Barbara. Tax and Sip. Time [online]. 2010;176 (2): 51-52. Available from: EBSCOhost.

4. Powell, LM. Associations between state-level soda taxes and adolescent BMI. Journal of Adolescent Health.

5. Bacon, L. (2010). Health at every size: The surprising truth about your weight. BenBella Books.

6. Wansink, B., Hanks, A. S., Cawley, J., & Just, D. R. (2014). From coke to coors: a field study of a fat tax and its unintended consequences. Wansink, Brian, et al.” From Coke to Coors: a field study of a sugar-sweetened beverage tax and its unintended consequences.

7. Andreyeva, T., Long, M. W., & Brownell, K. D. (2010). The impact of food prices on consumption: a systematic review of research on the price elasticity of demand for food. American journal of public health, 100(2), 216.

2009; 45 (3) Suppl pg:S57 -63

One thought on “Junk Food Taxes: Do They Work?

  1. Pingback: What health professionals need to know about “sugar taxes” | Foodkindness

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