First Sugar Tax in US proves Successful

April 21, 2017 Taxation in USA

Sugar taxesWASHINGTON D.C – America’s first tax on soda and other sugary drinks seems to have paid off, with consumers buying fewer sugary drinks, but the level of taxes and revenues not dropping.

On April 18th the results of a new study were published in the medical journal PLOS Medicine, with an evaluation of the outcomes of the first tax on sugar sweetened beverages enacted in the USA.

In March 2015 a “penny per ounce” tax was added to the sale of sugar-sweetened beverages in the USA, a measure which saw an effective cost hike of USD 0.12 per can of drink sold, and a rise of USD 0.68 per two litre bottle sold.

The results of the study suggested that the overall sales of the drinks fell by nearly 10 percent during the course of the past year.

It was also seen that bottled water, and other untaxed drinks, sold better, however, the researchers were not able to isolate the sales increase exclusively to the effects of the tax.

The data used for the report indicated that approximately 67 percent of the tax hike was passed to consumers when measured against all sugar sweetened beverages, however, the entirety of the tax was passed on in cases of sodas and energy drinks.

Further, researchers showed that the overall tax revenues in the taxed areas rose, while total consumer spending and store revenue did not drop.