Report: SSB Excise Tax in Denver

The CHOICES microsimulation model for Denver was used to calculate the costs and effectiveness over 10 years (2017–27) associated with implementation of a state excise tax on sugary drinks, at a tax rate of $0.02/ounce. The model used data from the U.S. Census, American Community Survey, Behavioral Risk Factor Surveillance System, NHANES, National Survey of Children’s Health, the Medical Expenditure Panel Survey, multiple national longitudinal studies, and obesity prevalence data provided by Denver Public Health and Denver Health and Hospital Authority.

This model-based analysis projected that a sugary drink excise tax would be cost-saving. Compared to no tax, the tax is projected to result in lower levels of sugary drink consumption, fewer cases of obesity, fewer deaths, and health care savings greater than $33 million dollars over the 10-year period under consideration. The analysis also considered the impact on diabetes, dental decay, and equity.

Rising rates of obesity represent one of the greatest public health threats facing the United States, and an estimated 57% of adults and nearly 30% of children in Denver are overweight or obese. Obesity has been linked to excess consumption of sugary drinks. Federal, state, and local governments have considered implementing excise taxes on sugary drinks to reduce consumption, reduce obesity, and provide a new source of government revenue.

This report was developed by Denver Public Health and the CHOICES Project team at the Harvard T.H. Chan School of Public Health. Funded by the JPB Foundation. Results are those of the authors and not the funders. The information in this report is intended to provide educational information on the cost-effectiveness of Sugary Drink Taxes.