Promoting Health Equity by Tiered Soda Tax Based on Sugar Content

Yudi Ruan


As an emerging public health measure, a soda excise tax is gaining popularity around the world and inciting controversies at the same time. This paper explores a more effective way to design soda taxes to promote health equity in the United States, compared to the volumetric soda taxes that have been adopted by several U.S. localities. Employing three criteria—efficiency, equity, and complexity—this paper comprehensively evaluates a tiered sugar content tax based on the U.K. model. The paper also addresses additional concerns about the tax, including paternalism, tax avoidance, under-shifting, federalism, regulatory capacity, and substitutes for sugar sweetened beverages (SSBs). As a result, this paper proposes a tiered soda tax based on sugar content, ideally levied at the state or federal level, as a tool to promote health equity in the United States.