A simulation model of different designs of taxes on sugary drinks and their effects on obesity, cardiovascular disease, and diabetes suggests that all tax designs would generate substantial health gains as well as lower health costs in the United States, according to new research published in the American Heart Association’s journal Circulation. However, some of the models performed better than others.

The researchers created a nationally representative microsimulation model to test three types of taxation on sugary drinks: a flat “volume tax” by drink volume ($0.01 per ounce), the only type used in U.S. cities to-date; a “tiered sugar content tax” by three levels of sugar content (ranging from $0.00 for less than 5 grams of added sugars per 8 ounces, to $0.02 per ounce of added sugars for more than 20 grams of added sugars per 8 ounces); and a “fixed sugar content tax” by absolute sugar content ($0.01 per teaspoon of added sugars, regardless of the number of ounces).

Under the simulation scenario, the researchers found all three tax structures would generate tax revenue, lower healthcare costs, and prevent cardiovascular disease events and diabetes cases. However, the tiered tax and sugar content tax could generate the largest health gains and cost savings. The researchers noted that any of the tax designs could be effective public health policy tools that may be able to reduce consumption of sugary drinks and thus improve health and overall well-being.

Younger adults (aged 35–44), blacks and Hispanics, and adults with lower incomes were estimated to experience the largest health gains. Thus, the research suggested that all three sugary drink tax designs may reduce health disparities, particularly among these subgroups.

“Overwhelming evidence confirms that food prices have a big impact on purchasing decisions. Taxing sugary drinks influences consumer choices, reducing consumption,” said study author Yujin Lee, a postdoctoral fellow of the Friedman School of Nutrition Science and Policy at Tufts University, in a press release. “U.S. cities have introduced volume taxes on sugary drinks. But our findings suggest that a tiered, fixed sugar content tax would be best, reducing consumer intakes while also encouraging manufacturer reformulations to reduce the sugar content of their products.”

Researchers estimated the potential health impact, quality-adjusted life-years (a measure of disease burden) costs, and cost-effectiveness of volume-based and sugar content-based (tiered, fixed) sugary drinks taxes in the United States. They used nationally representative data and a validated computer simulation model that incorporated data on adults aged 35–80 across three National Health and Nutrition Examination Survey cycles (2009–2014) to derive sociodemographics, cardiometabolic risk factors, and lifestyle habits. Net costs were calculated from adding the expense of the government’s implementation of tax collection plus the industry’s compliance and reformulation costs, then subtracting health care savings from fewer medical screenings, treatments, medications, surgeries, and supplies, discounted at 3% annually.

Given that the projections and modeling are based on observational data, the study does not establish a causal link between the health and cost effects of these sugary drink tax designs in U.S. adults. Rather, the estimates provide evidence that can be considered and incorporated into the design, implementation, and evaluation plans of potential taxes, including at local, state, or federal levels. The model’s population also did not include children, adolescents, or adults under age 35.

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