Taxing sugar-sweetened beverages: Knowledge, beliefs and where should the money go?

Background

The Sugar-Sweetened Beverage (SSB) industry consciously and subconsciously influences consumers to buy its products. Countering unhealthy messaging and behaviour could be tackled through the SSB levy and allocation of revenue toward healthy lifestyle programs. Given the limited information in the UAE on demographic and consumer knowledge and beliefs and allocation of SSB levy, we conducted a study to explore this further. The study objectives were to a) explore the association between demographic factors (nationality, income and education) with knowledge and beliefs for SSB and b) explore participants' views on allocating SSB levy toward healthy lifestyle programs.

Methods

A cross-sectional study of adults in the United Arab Emirates.

Results

The findings suggest knowledge was high for Sugar-Sweetened Beverages (SSB), obesity, and diabetes (1,231, 96.1%), and there was a high awareness of SSB tax (1,066, 83.2%). Knowledge and beliefs about Sugar-Sweetened Beverages were statistically significant for two demographic factors. There was support for the tax revenue to be spent on government programs and greater support for spending to be directed toward specific healthy lifestyle programs such as school health programmes (514, 39.8%), children's diet and nutrition programmes (497, 38.5%), physical activity programmes (480, 37.2%), among others.

Conclusions

The findings shed light on the influence demographic factors have on knowledge and beliefs, public health gaps and potential areas for SSB levy expenditure. Further research is needed to understand how best to implement healthy lifestyle programs within the community to optimise coverage, cost-effectiveness, and health outcomes.

Alcohol prices, the April effect, and the environment, in violence-related injury in England and Wales

Violent injury varies widely across England and Wales as does the price of alcohol. While the links between alcohol consumption and violence are well established in the medical and epidemiological literature, a causal link is questionable. This paper cuts through the causative argument by reporting a link between the general price of alcohol and violence-related injury across the economic regions of England and Wales. It examines the influence of the real price of alcohol and identifies an 'April effect' that coincides with the annual uprating of alcohol prices for excise duties, on violence-related injuries recorded at Emergency Department attendance. The data are monthly frequency of violent injury rates covering the period 2005-2014 across the economic regions. The principal finding is that a one-way relationship between the real price of alcohol and violent injury is established, and tax policy can be used to reduce the incidence of violent injury and the associated health costs.

Fiscal policies in the Federation of Bosnia and Herzegovina: are spending or revenue measures more effective?

We examine the effectiveness of different fiscal policies in the Federation of Bosnia and Herzegovina (FBiH). For this purpose, we use a structural macroeconomic model for the FBiH. In this model, GDP in the Federation is influenced by world demand and by domestic demand in the Federation. Domestic demand comprises consumption of private households, public consumption, and gross fixed capital formation. Employment depends positively on GDP and negatively on the tax wedge, i.e., the net wage plus social security contribution rates (including the unemployment insurance), and the personal income tax rate in the Federation. The latter allows the analysis of the impact of changes in social security contribution rates or in the income tax rate in the Federation of Bosnia and Herzegovina. The following Federation-specific policy instruments are implemented in the model for the FBiH: Pension funds contribution rate in FBiH; contribution rate for health insurance in FBiH; contribution rate for the unemployment insurance in FBiH; benefits from social security; direct tax rates (income tax rate, corporate tax rate); public consumption in FBiH. Our results show that policy measures that reduce the tax wedge on labour income are highly effective in stimulating employment. Due to the large elasticity of imports with respect to demand, pure demand-side measures have little impact on real variables, indicating that a small open economy like the Federation of Bosnia and Herzegovina has only little scope for influencing macroeconomic developments with pure demand management policies. Our results confirm earlier theoretical and empirical studies showing that the labour market can best be influenced positively by reducing the tax wedge. The multipliers of income tax reductions are larger and oscillate more than the effects of the other fiscal policy measures.

Earned Income Tax Credit and Youth Violence: Findings from the Youth Risk Behavior Surveillance System

Family- and neighborhood-level poverty are associated with youth violence. Economic policies may address this risk factor by reducing parental stress and increasing opportunities. The federal Earned Income Tax Credit (EITC) is the largest cash transfer program in the US providing support to low-income working families. Many states have additional EITCs that vary in structure and generosity. To estimate the association between state EITC and youth violence, we conducted a repeated cross-sectional analysis using the variation in state EITC generosity over time by state and self-reported data in the Youth Risk Behavior Surveillance System (YRBSS) from 2005 to 2019. We estimated the association for all youth and then stratified by sex and race and ethnicity. A 10-percentage point greater state EITC was significantly associated with 3.8% lower prevalence of physical fighting among youth, overall (PR: 0.96; 95% CI 0.94-0.99), and for male students, 149 fewer (95% CI: -243, -55) students per 10,000 experiencing physical fighting. A 10-percentage point greater state EITC was significantly associated with 118 fewer (95% CI: -184, -52) White students per 10,000 experiencing physical fighting in the past 12 months while reductions among Black students (75 fewer; 95% CI: -176, 26) and Hispanic/Latino students (14 fewer; 95% CI: -93, 65) were not statistically significant. State EITC generosity was not significantly associated with measures of violence at school. Economic policies that increase financial security and provide financial resources may reduce the burden of youth violence; further attention to their differential benefits among specific population subgroups is warranted.

Optimal income taxation under monopolistic competition

This paper is concerned with cross-dependencies between endogenous market structure and tax policy. We extend the Mirrlees (Rev Econ Stud 38:175-208, 1971) model of income taxation with a monopolistic competition framework with general additively separable consumer preferences. We show that quantity and variety distortions resulting from the market structure require adjustments to income tax policy, which also needs to be complemented with commodity or firm taxation to achieve the constrained social optimum. We calibrate the model and find that in policy design the failure to account for the market structure results in a welfare loss of 1.77%. Motivated by practical cases, we study a policy regime that is solely based on income taxation. We show that departures from the social optimum can be compensated by lower and less regressive income taxes and a smaller government compared to the regime with income and commodity taxes. We also examine the role of consumer preferences for policy outcomes and show that it is substantially amplified by an endogenous market structure.

State earned income tax credits and depression and alcohol misuse among women with children

About 30% of single mothers in the US live at or below the poverty line. Poverty is associated with higher risk of depression and substance use. We investigated associations between state earned income tax credit (EITC) policies and reported depressive symptoms and alcohol misuse among birthing parents who responded to Pregnancy Risk Assessment Monitoring Survey spanning 1990-2017. Nearly half of birthing parents reported no more than a high school education (45.4%; 95% CI: 45.3%-45.6%). An estimated 28.5% of birthing parents reported binge drinking in the three months prior to conception (95% CI: 28.3-28.8%). Among birthing parents, each 10 percentage-point increase in the generosity of state EITC relative to the federal EITC was associated with a lower prevalence of binge drinking (prevalence ratio = 0.96; 95% CI: 0.93-0.99) prior to conception. This association was more pronounced among birthing parents with no more than high school education (prevalence ratio = 0.92; 95% CI: 0.88-0.97). There was no association between state EITC and number of reported depressive symptoms prior to conception or after birth, except among those with lower educational attainment (prevalence ratio = 0.94; 95% CI: 0.89-0.99). Anti-poverty policies such as EITC may reduce the burden of alcohol misuse, especially among people with children.

Longer-term impacts of the Oakland, California, sugar-sweetened beverage tax on prices and volume sold at two-years post-tax

Sugar-sweetened beverage (SSB) consumption is associated with obesity and independently associated with type 2 diabetes and cardiovascular disease. Not only is obesity a growing public health problem, but it is also most recently associated with increased risk of severe illness from COVID-19. Taxes on SSBs are a policy tool used to help curb SSB consumption and are currently implemented in 7 U.S. cities and more than 40 countries. On July 1, 2017, Oakland, California, implemented a 1-cent/ounce tax on SSBs with ≥25 kilocalories/12 ounces. This study estimated the impact of the Oakland tax on prices, volume sold, and cross-border shopping two-years post-tax relative to one-year pre-tax. Universal product code-level Nielsen retail scanner data on non-alcoholic beverage sales were analyzed using a difference-in-differences design with Sacramento, California, as the comparison site. Taxed beverage prices increased by 0.67 cents/ounce, on average, in Oakland relative to Sacramento, corresponding to 67% pass-through. Taxed beverage volume sold decreased by 18% in Oakland relative to Sacramento, with a larger decrease for family-size beverages (23%) relative to individual-size beverages (8%). There was a 9% increase in volume sold of taxed beverages in the two-mile border area surrounding Oakland relative to the Sacramento border area, driven by a 12% increase for family-size taxed beverages. After accounting for this cross-border shopping, there was a net decrease of 6% in taxed beverage volume sold in Oakland. There was no significant change in untaxed beverage volume sold in either Oakland or its border area relative to their respective comparison sites, suggesting there was no substitution to untaxed beverages and cross-border shopping may have been limited to taxed beverages. This two-year post-tax study of the Oakland SSB tax adds to the limited number of longer-term evaluations of local U.S. SSB taxes.

Demand-side or supply-side stabilisation policies in a small euro area economy: a case study for Slovenia

In this paper we analyse the effectiveness of demand- and supply-side fiscal policies in the small open economy of Slovenia. Simulating the SLOPOL10 model, an econometric model of the Slovenian economy, we analyse the effectiveness of various categories of public spending and taxes during the period 2020 to 2030, assuming that no crisis occurs. Our simulations show that those public spending measures that entail both demand- and supply-side effects are more effective at stimulating real GDP and increasing employment than pure demand-side measures. This is due to the fact that supply-side measures also increase potential and not only actual GDP. Measures which foster research and development and those which improve the education level of the labour force are particularly effective in this respect. Employment can also be stimulated effectively by cutting the income tax rate and the social security contribution rate, i.e. by reducing the tax wedge on labour income, which positively affects Slovenia's international competitiveness. Successful stabilisation policies should thus contain a supply-side component in addition to a demand-side component. We also provide a first simulation of potential effects of the Covid-19 crisis on the Slovenian economy, which is modelled as a combined demand and supply shock.

The impact of the Cook County, IL, Sweetened Beverage Tax on beverage prices

This study assessed the extent to which the Cook County, IL, Sweetened Beverage Tax (SBT) of one cent per ounce (oz) on sugar-sweetened and artificially sweetened beverages was passed on to consumers in the form of higher prices. We drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to estimate the impact of the Cook County SBT on prices of taxed beverages, across product categories and sizes, as well as on prices of untaxed beverages. The DID model results showed an over-shifting of the tax with a 119% pass-through rate, on average, across all taxed beverages in Cook County compared to its comparison site. This price change represented, on average, a 34% increase in prices of taxed beverages. For untaxed beverages, prices were estimated to increase slightly by 0.04 cents per oz driven mainly by an increase in milk prices (0.12 cents per oz). We also found some heterogeneity in tax pass-through for the taxed beverages by sweetened beverage product category and size with pass-through being higher, on average, for individual-size (126%) compared to family-size (117%) beverages and higher for energy drinks (145%) compared to other sweetened beverages. Based on the baseline prices of different categories and sizes of beverages, the effective percentage increase in beverage prices resulting from the Cook County SBT ranged from a 52% increase for family-size soda to a 10% increase for family-size energy drinks.

The impact of Seattle's Sweetened Beverage Tax on beverage prices and volume sold

On January 1, 2018 the city of Seattle, WA, implemented a 1.75-cent per ounce (oz) Sweetened Beverage Tax (SBT) on sugar-sweetened beverages with at least 40 calories per 12 oz. This study drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to assess the impact of the SBT on taxed beverage prices in Seattle, the volume sold of taxed beverages in Seattle and in its 2-mile border area (cross-border shopping), and the volume sold of untaxed beverages (substitution) relative to changes in its comparison site of Portland, OR. The DID results showed that, on average, in the first year post-tax implementation, prices of taxed beverages rose by 1.03 cents per oz (p < 0.001) corresponding to a 59% tax pass-through rate. Volume sold of taxed beverages fell, on average, by 22% (p < 0.001) in the first year following the implementation of the tax. Volume sold of taxed beverages fell to a greater extent for family- versus individual-size beverages (31% versus 10%) and fell to a greater extent for soda (29%) compared to all other beverage types. Moderate substitution to untaxed beverages was found - volume sold of untaxed beverages increased by 4% (p < 0.05). The results revealed no significant increases in the overall volume sold of taxed beverages in the 2-mile border area of Seattle relative to its comparison site suggesting that tax avoidance in the form of cross-border shopping did not dampen the impact of the tax.

Distribution of sugar-sweetened beverage sales volume by sugar content in the United States: implications for tiered taxation and tax revenue

This study draws on data on sales volume, brand-level market shares, and sugar content to calculate the distribution of sugar-sweetened beverage (SSB) sales volume by sugar content, propose sugar content thresholds for a tiered tax structure, and estimate tax revenue. The most common SSBs sold had 26 g of sugar/8-oz serving; 70.8% had ≥ 25 g of sugar/8-oz serving, 16.9% were in the 10–15 g range, and 8.7% were in the 16–20 g range. A tiered tax with cut points at < 20 g and < 5 g of sugar/8-oz serving is proposed. A tax of 1¢/oz for SSBs in the second tier and 2¢/oz in third tier is projected to raise $18.2 billion in tax revenue similar to the 1.5¢/oz flat tax projection ($18.0 billion) but would yield 9% lower SSB volume. Understanding the distribution of SSB sales volume by sugar content informs policymakers on tiered tax structures, which may discourage consumption of SSBs with high levels of sugar and incentivize reformulation.

Effects of changes in earned income tax credit: Time-series analyses of Washington DC

Poverty has numerous deleterious effects on health, and the Earned Income Tax Credit (EITC) is the major policy tool used to alleviate poverty in the U.S. We evaluate effects of four distinct changes in earned income tax credit law in Washington, DC on maternal behaviors and infant outcomes. An interrupted time-series design was used with 312 monthly measures from 1990 through 2015 analyzed in 2018 (total n = 225,933 births). States with no EITC were included as the comparison group; analyses involved ARIMA modeling. Outcomes were derived from birth certificates, and included percent of live births below 2500 g, mean birth weight, mean gestation weeks, first trimester prenatal care, and maternal smoking during pregnancy. We found a pattern of significant improvements across all three infant outcome measures, with the size of the effect estimate monotonically matching the magnitude of the tax credit—ranging from a 1.9 (-2.9, -0.9) reduction in rate per 100 births of low birth weight for the smaller 10% credit, to a 4.7 (-5.4, -4.0) reduction with the 40% credit. Results for maternal smoking and prenatal care were mixed. Results suggest that earned income tax credit policies improve birth outcomes; mechanisms for this effect deserve further study.

Taxing sugar-sweetened beverages: impact on overweight and obesity in Germany

BACKGROUND

Consumption of sugar-sweetened beverages (SSBs) increases the risk of overweight and obesity. Taxing SSBs could decrease daily energy consumption and body weight. This model-based study evaluated the impact of a 20% SSB-sales tax on overweight and obesity in the context of Germany.

METHODS

The population aged 15-79 years was modelled. Taxation was assumed to affect energy consumption via demand elasticities, which affected weight and BMI. Model-based analysis was performed to estimate the tax impact on BMI in different age, gender and income groups.

RESULTS

Implementing a 20% SSB tax reduced energy consumption mainly in younger age groups, males, and those with low income. Taxation decreased the mean BMI in younger groups, with the largest decrease in those aged 20-29 years, while effects in groups 60 years or above were minimal. In absolute terms, taxation was estimated to avoid 1,028,000 (-3% relative reduction) overweight individuals and 479,000 obese individuals (-4%). Overweight decreased the most in males aged 20-29 years (408,000 fewer cases /-22%), the same applied for obesity (204,000/-22%).

CONCLUSIONS

An SSB tax could have significant impact on overweight and obesity, which could translate into substantial reductions of morbidity and mortality.

Towards Establishing Fiscal Legitimacy Through Settled Fiscal Principles in Global Health Financing

Scholarship on international health law is currently pushing the boundaries while taking stock of achievements made over the past few decades. However despite the forward thinking approach of scholars working in the field of global health one area remains a stumbling block in the path to achieving the right to health universally: the financing of heath. This paper uses the book Global Health Law by Larry Gostin to reflect and take stock of the fiscal support provided to the right to health from both a global and an African perspective. It then sets out the key fiscal challenges facing global and African health and proposes an innovative solution for consideration: use of the domestic principles of tax to design the global health financing system.