The information in this report is intended to provide educational information on the cost-effectiveness of sugary drink excise taxes.
Executive Summary
Sugary drink consumption has been linked to excess weight gain, obesity, incidence of type 2 diabetes, heart disease, and cancer. Federal, state, and local governments have considered implementing excise taxes on sugary drinks to reduce consumption, prevent obesity, and provide a new source of government revenue.1-3 In Massachusetts, legislative measures to introduce a tiered sugary drink excise tax have been proposed.4,5 The most recent proposed bills specify that tax revenue be dedicated to benefits, services, and programs, including universal free school meals and provision of healthy meals in Head Start and other high need early education settings, for communities most impacted by health inequity and burdened by chronic health outcomes related to sugary drink consumption.4,5
We modeled implementation of a state excise tax on sugary drinks in Massachusetts. Consistent with current policy proposals, we assumed tiered tax rates depending on the sugar content of the beverage: $0.01/ounce for beverages with more than 7.5 but less than 30 grams of sugar per 12 fluid ounces and $0.02 for beverages with more than 30 grams of sugar per 12 fluid ounces. CHOICES cost-effectiveness analysis compared the costs and outcomes of implementing a tax with the costs and outcomes expected if the tax were not implemented over 10 years (2023-2032).
The sugary drink excise tax on distributors is projected to be cost-saving. This means that the tax would save more in future health care costs than it costs to implement. This is without consideration of the potential revenue that would be generated, where a tiered $0.01-$0.02/ounce statewide excise tax on sugary drinks in Massachusetts could raise as much as $226 million to $322 million in annual revenue.6 Among Massachusetts residents, the tax is projected to decrease sugary drink consumption, prevent over 62,000 of cases of obesity, and save $937 million in health care costs. People who consume sugary drinks are projected to spend less on these drinks with the excise tax in place. We also project that Black and Hispanic/Latinx Massachusetts residents will experience a greater than average reduction in obesity levels after the tax is implemented, leading to improved health equity. These results are summarized below and in the complete report. Projected results for a $0.02/ounce state excise tax based on the volume of sugary drinks were similar.
Continue reading in the full report.
Contact choicesproject@hsph.harvard.edu for an accessible version of this report.
Citation
McCulloch SM, Barrett JL, Reiner JF, Cradock AL, Gortmaker SL. Massachusetts: Sugary Drink Excise Tax. The CHOICES Learning Collaborative Partnership at the Harvard T.H. Chan School of Public Health, Boston, MA; February 2024. For more information, please visit www.choicesproject.org.
The design for this brief and its graphics were developed by Molly Garrone, MA.
Funding
This work is supported by The JPB Foundation and the Centers for Disease Control and Prevention (U48DP006376), and the National Institutes for Health (R01HL146625). The findings and conclusions are those of the author(s) and do not necessarily represent the official position of the Centers for Disease Control and Prevention or other funders.
For further information, contact choicesproject@hsph.harvard.edu
References
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American Public Health Association Taxes on Sugar-Sweetened Beverages. 2012.
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Falbe J, Rojas N, Grummon AH, Madsen KA. Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California. American Journal of Public Health. 2015;105(11):2194-2201.
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World Health Organization. Global action plan for the prevention and control of noncommunicable diseases 2013–2020 [Internet]. Geneva: WHO. Updated appendix 3, “Best buys” and other recommended interventions for the prevention and control of noncommunicable diseases; [updated 2017; cited 2019 Sep 17]. Available from: https://iris. who.int/bitstream/handle/10665/94384/9789241506236_eng.pdf?sequence=1
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Massachusetts Senate Docket No. 959. An Act to promote healthy alternatives to sugary drinks. https://malegislature.gov/Bills/193/SD959. Filed January 18, 2023. Accessed March 9, 2023.
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Massachusetts House Docket No. 1813. An Act to promote healthy alternatives to sugary drinks. https://malegislature.gov/Bills/193/HD1813. Filed January 18, 2023. Accessed March 9, 2023.
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UCONN Rudd Center. Revenue Calculator for Sugary Drink Taxes. Release: April 13, 2021. http://www.uconnruddcenter.org/revenue-calculator-for-sugary-drink-taxes. Accessed December, 2023.
See the report for the full list of references.
See the sugary drink excise tax report for the impact on the Boston, MA population.