U.S. sweeteners: Combating excess consumption with an excise tax?

Abstract

AbstractObesity is a public health problem in the United States that has been linked to excess sweetener consumption. The American Heart Association (AHA) recommends no more than 6–9 teaspoons/capita/day, while the U.S. Food and Drug Administration (FDA) recommends 200 calories/capita/day of caloric sweetener consumption. Both recommendations are well below the reported 2016 sweetener consumption levels. We quantify the input tax rates needed to reduce the current excess sweetener consumption level to the AHA and FDA recommended standards. We calculate the joint tax in the United States on two major sweeteners, sugar and High Fructose Corn Syrup (HFCS), to be 31 and 24 cents per pound, respectively, based on the AHA standard, and 19 and 17 cents per pound, respectively, using the FDA standard. These taxes would be roughly the magnitude of the existing sugar and HFCS prices. In both cases, the tax incidence on producers is much smaller than on consumers. Our focus is very different from past studies in that it deals with the effect of taxes on inputs to meet the recommended target rather than a selective tax (sugar‐sweetened beverage tax). If a sweetener tax were implemented, U.S. sugar and HFCS producers would lose US$398–US$489 and US$683–US$844 million per year, respectively.