Taxes & Subsidies
Taxes and subsidies are powerful policy tools used to influence food prices, purchasing decisions, dietary habits, and health.
Research evidence shows that subsidies for healthful foods, such as fruits and vegetables, increase purchases and intake of those items. Taxes on unhealthful foods also impact dietary behaviors. Eight U.S. cities and counties and over 100 countries have adopted excise taxes on sweetened drinks. Evaluations of those taxes show they significantly reduce purchases of taxed items, reduce intake of sweetened drinks and added sugars, and improve health outcomes, including dental caries, weight status, and perinatal health.
Policy Questions
Did Philadelphia’s 1.5-cent-per-ounce excise tax on sweetened beverages reduce purchases of taxed beverages?
After accounting for cross-border shopping, volume sales of taxed beverages declined 38% one year after tax implementation compared to sales in a similar city without a tax.
Did Philadelphia’s 1.5-cent-per-ounce excise tax on sweetened beverages improve dental health?
The tax was not associated with changes in dental health among all Philadelphians. Among patients on Medicaid, however, the number of new decayed, missing, and filled teeth declined 22% for older children/adults and 30% for younger children two years after tax implementation.
Does a 50% same-day incentive for fruits and vegetables help lower income families with children make healthier food purchases?
Compared to families randomized to a control group, families randomized to receive a 50% discount on fruits and vegetables over six months increased weekly spending on those items by 27%.
Impacts & Key Findings
-38%
Philadelphia’s 1.5-cent-per-ounce sweetened beverage tax reduced volume sales of sweetened drinks by 38% one year after tax implementation compared to sales in a similar city without a tax.
-30%
Philadelphia’s 1.5-cent-per-ounce sweetened beverage tax reduced dental caries among young children on Medicaid by 30% two years after tax implementation.
27%
A 50% same-day incentive for fruits and vegetables increased weekly spending on those items by 27% over six months.
