Report: SSB Excise Tax in Utah

The CHOICES microsimulation model for Utah 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 the Utah Department of Health.

This model-based analysis projected that a sugary drink excise tax would be cost-saving. Compared to no tax, the tax projected to result in lower levels of sugary drink consumption, fewer cases of obesity and fewer deaths. For every dollar invested, this tax is projected to save $28.88 in health care costs, amounting to $132 million dollars in health care savings over the 10-year period. 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. 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 the Salt Lake County Health Department and the CHOICES Project 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.