Unhealthy snack taxes
Snack taxes are generally applied to unhealthy products high in sugar and fat. Adding an excise tax (a fee per ounce) or a sales tax (a percentage of the product’s price) to unhealthy products increases the price of unhealthy snacks for consumers. The funds generated may be used to subsidize healthy foods or to support other public health ventures.
What could this strategy improve?
Expected Benefits
Our evidence rating is based on the likelihood of achieving these outcomes:
Reduced unhealthy food consumption
Potential Benefits
Our evidence rating is not based on these outcomes, but these benefits may also be possible:
Improved weight status
What does the research say about effectiveness?
There is some evidence that snack taxes reduce consumption of unhealthy foods, especially when taxes are larger and more broadly applied1, 2, 3, 4, 5, 6. Unhealthy snack taxes increase the price of snacks for consumers7; taxes that change the relative prices of healthy and unhealthy foods have been shown to affect both consumption patterns and obesity levels3, 8. Small taxes appear to have little effect on consumption; however, larger price increases may more effectively change consumption1, 2. Additional evidence is needed to confirm effects.
Increasing fast food prices has been associated with improved weight status, particularly among adolescents9, and a higher likelihood of fruit and vegetable consumption2. Broader application of snack taxes may be necessary to avoid shifts in unhealthy eating behavior7; for example, model-based studies suggest that a saturated fat-only tax may increase sodium consumption3. States without snack (or sugar sweetened beverage) taxes are more likely to have high increases in state-level obesity prevalence than states with snack taxes in place10. Taxes in small geographic areas may also have minimal effects on consumption, since consumers can easily purchase unhealthy snacks in neighboring areas without such taxes7.
Snack taxes have the potential to raise significant funds that could be used to subsidize purchases of fresh fruits and vegetables by households with low incomes or to support other obesity prevention efforts2. States can also provide tax credits or rebates to households with low incomes to encourage substitutions, minimizing the regressive income effect of such a tax7.
Taxing foods by product type, such as specific nutrients included, calorie makeup, or a combination, can improve the implementation and administration of taxes11.
How could this strategy advance health equity? This strategy is rated potential to decrease disparities: suggested by intervention design.
Unhealthy snack taxes are designed to increase the cost of food products high in calories or fat and are a suggested strategy to reduce disparities in health outcomes, especially related to obesity and unhealthy snack consumption. Obesity prevalence among children and adolescents ages 2 to 19 is highest in groups with low to middle incomes16. Families with low incomes spend a larger portion of their income on food and price changes from snack taxes are likely to have a greater effect on the purchasing decisions of families with low incomes than wealthier families17. Unhealthy snack taxes may also impact the decision making of youth more than adults2. Greater reductions in the consumption of unhealthy snacks may lead to more health benefits and larger reductions in obesity rates among families with low incomes and among youth2, 3, 17.
What is the relevant historical background?
One of the first snack taxes was passed in 1919 when Congress declared candy a luxury item and approved a 5% excise tax. In 1924, Republicans successfully led a campaign to repeal such taxes on candy and soda. However, in 1932, in response to the Great Depression, Congress approved an excise tax which included candy and chewing gum, among other luxury items18.
Many unhealthy snacks include high levels of sugar. The federal government provides subsidies that encourage the overproduction of sugar which ensures lower prices because it is so widely used in the U.S.19, 20. Low prices of a former luxury commodity has led to increased consumption21.
In the present day, the obesity epidemic has been linked to the American diet and its high content of calories and sugar22. To combat this epidemic, various strategies have been utilized such as snack taxes, soda taxes, and nutrition labeling. The U.S. Department of Agriculture (USDA) proposed updated standards in 2023 that would limit added sugars and sodium, in addition to increasing whole grains23.
Equity Considerations
- Is there a snack tax in your community? How does it reduce the purchase and consumption of unhealthy snacks? How can it be altered to be more effective?
- What other interventions, such as decreasing the cost of healthy snacks, could be paired with an unhealthy snack tax to support positive change?
- Who opposes and who supports unhealthy snack taxes in your community? Why?
Implementation Examples
The Navajo Nation passed the Healthy Diné Nation Act of 2014 and was the first U.S. community to pass a tax on junk food, which includes a 2% tax on the sale of all food items with minimal to no nutritional value. All revenue collected from this tax is allocated to the Community Wellness Development Projects Fund, which supports projects to improve the community’s physical and social environment, such as community gardens, healthy food initiatives, farmers’ markets, playgrounds, walking and biking trails, or swimming pools12, 13, 14.
Bridging the Gap provides annual state sales tax rates for snack products, including candy, chips, pretzels, ice cream, popsicles, milkshakes, and baked goods for all 50 states and Washington, D.C.15.
Footnotes
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1 Niebylski 2015 - Niebylski ML, Redburn KA, Duhaney T, Campbell NR. Healthy food subsidies and unhealthy food taxation: A systematic review of the evidence. Nutrition. 2015;31:787-795.
2 AHA-Mozaffarian 2012 - Mozaffarian, D., Afshin, A., Benowitz, N.L., Bittner, V., Daniels, S.R., Franch, H.A., Jacobs, D.R., Kraus, W.E., Kris-Etherton, P.M., Krummel, D.A., Popkin, B.M., Whitsel, L.P., & Zakai, N.A. (2012). Population approaches to improve diet, physical activity, and smoking habits: A scientific statement from the American Heart Association (AHA). Circulation, 126(12), 1514-1563.
3 Eyles 2012 - Eyles H, Ni Mhurchu C, Nghiem N, Blakely T. Food pricing strategies, population diets, and non-communicable disease: A systematic review of simulation studies. PLoS Medicine. 2012;9(12):e1001353.
4 Sacks 2011 - Sacks G, Veerman JL, Moodie M, Swinburn B. “Traffic-light” nutrition labelling and “junk-food” tax: A modelled comparison of cost-effectiveness for obesity prevention. International Journal of Obesity. 2011;35(7):1001-1009.
5 Epstein 2010 - Epstein LH, Dearing KK, Roba LG, Finkelstein E. The influence of taxes and subsidies on energy purchased in an experimental purchasing study. Psychological Science. 2010;21(3):406-414.
6 French 2001 - French SA, Story M, Jeffrey RW. Environmental influences on eating and physical activity. Annual Review of Public Health. 2001;22:309-335.
7 Cawley 2015 - Cawley J. An economy of scales: A selective review of obesity's economic causes, consequences, and solutions. Journal of Health Economics. 2015;43:244-268.
8 Urban-Engelhard 2009 - Engelhard C, Garson A, Dorn S. Reducing obesity: Policy strategies from the tobacco wars. Washington, D.C.: Urban Institute; 2009.
9 Powell 2013 - Powell LM, Chriqui JF, Khan T, Wada R, Chaloupka FJ. Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: A systematic review of prices, demand and body weight outcomes. Obesity Reviews. 2013;14(2):110-128.
10 Kim 2006 - Kim D, Kawachi I. Food taxation and pricing strategies to “thin out” the obesity epidemic. American Journal of Preventive Medicine. 2006;30(5):430-437.
11 Pomeranz 2018 - Pomeranz JL, Wilde P, Huang Y, Micha R, Mozaffarian D. Legal and administrative feasibility of a federal junk food and sugar-sweetened beverage tax to improve diet. American Journal of Public Health. 2018;108(2):203-209.
12 George 2021 - George MD, Holder R, Shamblen S, Nienhius MM, Holder HD. Alcohol compliance checks and underage alcohol-involved crashes: Evaluation of a statewide enforcement program in South Carolina from 2006 to 2016. Alcoholism: Clinical and Experimental Research. 2021;45(1):242-250.
13 Navajo-Snack tax - The Navajo Nation Council. Resolution of the 22nd Navajo Nation Council: The Healthy Diné Nation Act of 2014; 2014:CN-54-14.
14 TNS-Duara 2015 - Tribune News Service (TNS), Duara N. Navajo Nation experiments with junk food tax. Governing the States and Localities. 2015.
15 BTG-Soda or snack - Bridging the Gap (BTG). Soda/snack taxes.
16 CDC-Childhood obesity facts - Centers for Disease Control and Prevention (CDC). Overweight & obesity. Childhood obesity facts.
17 Rudd-Friedman 2012 - Friedman R, Brownell K. Sugar-sweetened beverage taxes: An updated policy brief. New Haven: Yale Rudd Center for Food Policy & Obesity; 2012.
18 Sheu 2006 - Sheu W. The evolution of the modern snack tax bill: From World War I to the war against obesity. 2006.
19 USDA-Sugar and Sweeteners - U.S. Department of Agriculture (USDA). Sugar & sweetener. Policy.
20 IN Sugars - Indiana Sugars. Why is sugar a government subsidized commodity? 2021.
21 Bosma 2023 - Bosma U. How the world got hooked on sugar. TIME. 2023.
22 Temple 2022 - Temple JA, Ou SR, Reynolds AJ. Closing achievement gaps through preschool-to-third-grade programs. Frontiers in Education. 2022;7.
23 NPR-Bustillo 2023a - Bustillo X. The USDA wants to limit added sugars and sodium in school meals. National Public Radio (NPR). 2023.
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