Legal and administrative feasibility of a federal junk food and sugar-sweetened beverage tax to improve diet

The motivation for conducting the study was that junk food taxes could disincentivise consumption of unhealthy foods and potentially reduce the incidence of diseases related to unhealthy diets in the United States.

A systematic literature review was conducted to examine food definitions and US federal and international tax bills, laws and mechanisms to identify potential approaches. The criteria considered for a junk food tax were: effectiveness in terms of public health goals and previous federal taxes and mechanisms that could be used as models. The feasibility of the tax was assessed by analysing the achievability of implementation (based on how similar taxes have fared in the past) and compatibility with other federal taxing mechanisms and laws (for example, has the federal government previously defined similar categories of food to be taxed?).

The results of this review show that multiple sources (scientific literature, US and international food tax bills and laws, and existing federal taxes) suggest that foods to be taxed should be defined either through specific categories of food, or through a combination of food categories and nutrient content. Another viable strategy is to tax sugar, with the tax increasing as the sugar content of the food rises. A manufacturer excise tax was found to be a feasible taxation strategy.

Some limitations of the study are:

1. May have not captured all relevant bills or laws.
2. Lack of analysis related to the feasibility of assessing a tax directly on sugar processors and refiners, as opposed to on manufacturers of sugary foods.

Issues outside the scope of the present investigation include regressivity of the taxes, access to healthy food, complements and substitutes, the need for concurrent incentives or subsidies for healthier food, the optimal levels of taxation, and the best use of tax revenues.

Abstract

Objectives. To evaluate legal and administrative feasibility of a federal “junk” food (including sugar-sweetened beverages [SSBs]) tax to improve diet.

Methods. To assess food definitions and administration models, we systematically searched (1) PubMed (through May 15, 2017) for articles defining foods subject to taxes, and legal and legislative databases as well as online for (2) US federal, state, and tribal junk food tax bills and laws (January 1, 2012–February 28, 2017); SSB taxes (January 1, 2014–February 28, 2017); and international junk food tax laws (as of February 28, 2017); and (3) federal taxing mechanisms and administrative methods (as of February 28, 2017).

Results. Articles recommend taxing foods by product category, broad nutrient criteria, specific nutrients or calories, or a combination. US junk food tax bills (n = 6) and laws (n = 3), international junk food laws (n = 2), and US SSB taxes (n = 10) support taxing foods using category-based (n = 8), nutrient-based (n = 1), or combination (n = 12) approaches. Federal taxing mechanisms (particularly manufacturer excise taxes on alcohol) and administrative methods provide informative models.

Conclusions. From legal and administrative perspectives, a federal junk food tax appears feasible based on product categories or combination category-plus-nutrient approaches, using a manufacturer excise tax, with additional support for sugar and graduated tax strategies.

Reference

Pomeranz, J.L., Wilde, P., Huang, Y., Micha, R. and Mozaffarian, D., 2018. Legal and Administrative Feasibility of a Federal Junk Food and Sugar-Sweetened Beverage Tax to Improve Diet. American journal of public health, 108(2), pp.203-209.

Read the full study here. Read a Vox article on the paper here: Mexico and Hungary tried junk food taxes and they seem to be working. See the Foodsource resource What interventions could potentially shift our eating patterns in sustainable directions? and FCRN information on food taxes here.

Note that the UK government is also introducing a soft drinks industry levy - this will come into force in April 2018.