POLICY BACKGROUND
The policy of local tax payment of one cent per ounce on soda and sugar sweetened beverage (SSB) was approved in November 2016 in San Francisco, California to reduce the public’s exposure to obesity and type 2 diabetes. This is a state level policy and will be implemented from January 2018 onwards. Distributors of SSBs in San Francisco will be responsible for paying this tax; the tax will not apply to retail sales of SSBs1. A beverage that contains added sugar and 25 or more calories per 12 ounces is a sugar sweetened beverage1. This includes few soft drinks, sports drinks, iced tea, juice drinks and energy drinks1. The tax will also be applied on syrups and powders that can be turned into SSBs. Approximately 12 percent of adults in California consume soda at least once per day2. Berkeley passed a similar local soda tax in 2014 in the United States. Soda and SSBs may not be the only cause of obesity, however, the consumption of beverages that are high in added sugar and calories contributes significantly to negative health outcomes. SSBs are associated with weight gain because of their increased sugar content. High sugar content is associated with high blood glucose levels and high calorie intake, which increases the deposition of fat (Adipose tissue) in the peripheral tissues leading to obesity. In addition to changing behavior, an SSB tax can provide additional revenue to the city, which the city can then use for any governmental purpose or for public welfare1.
Obesity is a major concern in the United States due to its increasing prevalence in the nation. It is a leading cause of mortality and morbidity within the nation, and the high prevalence of obesity largely influences the healthcare system in the United States. It is reported that 69% of adults in the United States are overweight, and more than one-third (35%) are obese3. Among adults in California the prevalence of obesity increased from 19 percent in 2001 to 25 percent in 2011-122. Adults who consumed soda/SSBs one or more times per day were more prone to being obese than those who consumed these sugary beverages less often2. Diabetes is also increasing at an alarming rate across the United States. From 1980 through 2014, the number of Americans diagnosed with diabetes increased fourfold from 5.5 million to 22 million3. SSBs contain added sugar which can increase the exposure of the population to type 2 Diabetes. Thus, SSBs are one such factor that increases the risk for obesity and type 2 diabetes.
EFFECTS
Intended effects:
‘ Reducing the rates of Obesity: Consumption of SSBs like soda has been associated with higher calorie intake, lower dietary quality, and increase in weight. Local tax on SSB will help in reducing the consumption of these drinks, which is directly linked to causing obesity. It has been reported that a higher proportion of adults who consume soda daily were obese (30 percent) compared to adults who consume soda less frequently (24 percent)2.
‘ Reducing the occurrence of Diabetes: SSBs tend to increase the blood sugar and insulin levels due to their high sugar content. If consumed in large amounts, they lead to an increased dietary glycemic load4. Obese individuals are more prone to increased glucose intolerance and insulin resistance induced by a high glycemic diet, which increases the risk of type 2 diabetes4.
‘ SSBs are also linked to high incidence of dental caries, and subsequent oral health issues in children and adults. The proposal will help in reducing the rates of dental caries, and thereby improving the oral health of the population1.
‘ A study published by the American Journal of Public Health showed that there was 21% reduction in SSB consumption and 63% increase in water consumption in Berkeley after the implementation of SSB tax5. Adding a tax on SSBs will make buying them expensive, which can make an individual who is thirsty consume water instead of having soda/SSBs.
Unintended effects:
‘ Consumers may be likely to substitute soda with other calorie containing products, which will lead to similar health consequences of obesity, diabetes, and incidence of dental caries.
‘ People with high socioeconomic status will still be at risk because they can afford to buy these beverages even after the local tax is applied.
INTEREST GROUPS
In favor of the proposed bill:
‘ San Francisco Medical Society is a professional association representing physicians, medical students, residents and fellows. It believes that obesity, diabetes, and heart disease are linked to overconsumption of sugar, and soda is a leading cause of dietary sugar. Taxes can not only decrease the consumption of SSBs, but the revenue collected may also be used to educate the population, prevent overconsumption, and treat related health conditions6.
‘ National Association for Advancement of Colored People (NAACP) is in favor of soda tax, because it wants to advocate for people from low-income and communities of color, and address the health needs of their communities1.
‘ The American Heart Association supports taxing SSBs, because it will help in reducing the consumption of these drinks in the US population, and improve cardiovascular health3.
‘ California Dental Association supports the bill, because SSBs are associated with high incidence of dental caries in children and adults1.
Opposing the proposed bill:
‘ American Beverage Association represents the beverage industry in the United States. It considers the local tax as a ‘grocery tax’, because it will lead to higher prices on other goods. This will affect small businesses and customers in an expensive city like San Francisco1. They argue that the tax is on distributors, and not paid by customers who buy the drink.
‘ A few restaurants and grocery owners oppose the bill, because they believe that the tax will affect their profits1. It will affect their business, because they will be forced to pass on the tax to customers, and grocery prices will rise. Also, they argue that the government is implementing the tax for health safety, but there is no dedication of revenue to health programs1.
RECOMMENDED ACTIONS:
The recommendation is to support the bill
‘ The bill will help in reducing the consumption of SSBs, and thus, it will help in maintaining the health of the people in the community. It will reduce the risk of obesity and diabetes in the population.
‘ Due to increase in the price of SSBs, consumption of water, fruit juices and whole milk will tend to increase. These alternative drinks are most likely better for health than SSBs. After implementing similar tax in Berkeley, there was a decrease in the consumption of SSB, and increase in the sales of water5.
‘ According to a study by Harvard's T.H. Chan School of Public Health, it was found that Bay Area taxes could result in approximately 20% drop in soda consumption and decrease the incidence of diabetes by 4% in the area after the taxes take full effect7.
‘ The government should provide health education campaigns to address the consequences of SSB consumption amongst the population, which will help reduce the consumption of SSB among high socioeconomic status population as well.
‘ Further research should be done to address the consequences of tax on SSBs, including health gains, population affected, monetary savings to the health sector, and revenue generated by the government. This will help other States in implementing similar tax for the welfare of the population.