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Improving Value

Sin Taxes

Sin taxes are taxes used to discourage certain behaviors and sometimes to raise revenues for health enhancing activities. These taxes are generally levied on goods or activities associated with poor health outcomes, such as cigarettes, alcohol, gambling and sugar-sweetened beverages. 

Overall, the evidence with respect to the role of sin taxes in reducing consumption of alcohol, tobacco and sugar-sweetened beverages is quite strong. The evidence with respect to sugar-sweetened beverage taxes is the thinnest — while these taxes drove down sugary beverage consumption in the city where the taxes were implemented, studies foud that sugar-sweetened beverage consumption rose in neighboring towns.1 Furthermore, the impact of beverage taxes on obesity rates remains to be seen. By comparison, the linkages between tax levels and alcohol and tobacco use, and positive health impacts, is quite strong.

With respect to tobacco cessation in particular, using a multi-component approach that includes educational initiatives and environmental changes has proven more effective than using just one approach in isolation.2

 

Notes

1. Roberto, Christina A., et al., "Association of a Beverage Tax on Sugar-Sweetened Beverages With Changes in Beverage Prices and Sales at Chain Retailers in a Large Urban Setting," JAMA, Vol. 321, No. 18 (May 14, 2019). 

2. Farrelly, M. C., et al., "Youth Tobacco Prevention Mass Media Campaigns: Past, Present, and Future Directions," Tobacco Control, Vol. 12 (June 1, 2003). 

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