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Updated Online Tool Offers Estimates of Revenue from Taxes on Sugar-Sweetened Beverages

January 21, 2014

A federal excise tax of a penny-per-ounce on sugar-sweetened beverages would generate over thirteen billion dollars in revenue per year, according to an estimate derived by researchers at the Rudd Center. In collaboration with researchers from the University of Illinois at Chicago, researchers at the Rudd Center have updated the Center’s Revenue Calculator for Sugar-Sweetened Beverage Taxes, an online tool which offers estimates of revenue from taxes on sugar-sweetened beverages.

According to research published in the journal Diabetes Care, sugar-sweetened beverages - such as sodas, sports drinks, sweetened teas, and fruit drinks - have been shown to be a major contributor to the U.S. obesity and diabetes epidemics, and the prospect of taxing these beverages has been receiving increased attention across the county.

The Revenue Calculator for Sugar-Sweetened Beverage Taxes serves as a resource for food policy makers and advocates who are deciding whether to pursue a tax on sugar-sweetened beverages and how much revenue such a tax would raise for their state or city.

Researchers used the most recently available public and proprietary data on beverage consumption, population, pricing, as well as socio-demographic information on the variation in sugar-sweetened beverage consumption to populate the updated calculator. With new data and functionality, the online tool allows users to generate expected revenue from a penny-per-ounce tax on sugar-sweetened beverages by beverage type, state, city and year (2013-2017).

While many states have considered legislative proposals to impose sugar-sweetened beverage taxes, none has passed to date. The researchers assert that excise taxes on sugar-sweetened beverages would generate considerable revenue for states, cities and the nation that could be earmarked for much needed public health programs.

Funding for proprietary data and updating the calculator has been provided in part by the National Cancer Institute, National Institutes of Health (1R01CA172814-01A1), Robert Wood Johnson Foundation Healthy Eating Research and Bridging the Gap programs, and Voices for Healthy Kids, an initiative of the Robert Wood Johnson Foundation and American Heart Association.

Collaborators on the project include the Rudd Center’s Director of Economic Initiatives, Tatiana Andreyeva, PhD; Harold Goldstein, DrPH, Executive Director, California Center for Public Health Advocacy; Frank J. Chaloupka, PhD, Professor of Economics, University of Illinois at Chicago; and Lisa Powell, PhD, Professor of Health Policy and Administration, University of Illinois at Chicago.