Policy lessons from health taxes: a systematic review of empirical studies

Alexandra Wright, Katherine E. Smith, Mark Hellowell

    Research output: Contribution to journalArticle

    39 Citations (Scopus)

    Abstract

    Background: Taxes on alcohol and tobacco have long been an important means of raising revenues for public spending in many countries but there is increasing interest in using taxes on these, and other unhealthy products, to achieve public health goals.Objective: We present a systematic review of the research on health taxes, and aim to generate insights into how such taxes can: (i) reduce consumption of targeted products and related harms; (ii) generate revenues for health objectives and distribute the tax burden across income groups in an efficient and equitable manner; and (iii) be made politically sustainable.Methods: Six scientific and four grey-literature databases were searched for empirical studies of ‘health taxes’ – defined as those intended to increase the costs of manufacturing, distributing, retailing and/or consuming health-damaging products. Since reviews already exist of the evidence relating to traditional alcohol and tobacco excise taxes, we focus on other taxes such as taxes on retailers and manufacturers of unhealthy products, and consumer taxes targeting unhealthy foods, such as sugar-sweetened beverages.Results: Ninety-one peer-reviewed and 11 grey-literature studies met our inclusion criteria. The review highlights a recent, rapid rise in research in this area, most of which focuses on high-income countries and on taxes on food products or nutrients. Findings demonstrate that high tax rates on sugar-sweetened beverages are likely to have a positive impact on health behaviours and outcomes, and, while taxes on products reduce demand, they add to fiscal revenues. Common concerns about health taxes are also discussed.Conclusions: If the primary policy goal of a health tax is to reduce consumption of unhealthy products, then evidence supports the implementation of taxes that increase the price of products by 20% or more. However, where taxes are effective in changing health behaviours, the predictability of the revenue stream is reduced. Hence, policy actors need to be clear about the primary goal of any health tax and frame the tax accordingly – not doing so leaves taxes vulnerable to hostile lobbying. Conversely, earmarking health taxes for health spending tends to increase public support so long as policymakers follow through on specified spending commitments
    LanguageEnglish
    Pages1-14
    Number of pages14
    JournalBMC Public Health
    Volume17
    DOIs
    Publication statusPublished - 19 Jun 2017

    Fingerprint

    Taxes
    Health Policy
    taxes
    health
    Health
    revenue
    gray literature
    health behavior
    Beverages
    Health Behavior
    nicotine
    Food
    Tobacco
    alcohol
    food
    tax increase
    tax burden
    income
    Lobbying
    Alcohols

    Keywords

    • Sin taxes
    • public health
    • hypothecation
    • earmarking
    • sugar tax
    • fat tax
    • soda tax
    • tobacco
    • alcohol
    • systematic review

    Cite this

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    title = "Policy lessons from health taxes: a systematic review of empirical studies",
    abstract = "Background: Taxes on alcohol and tobacco have long been an important means of raising revenues for public spending in many countries but there is increasing interest in using taxes on these, and other unhealthy products, to achieve public health goals.Objective: We present a systematic review of the research on health taxes, and aim to generate insights into how such taxes can: (i) reduce consumption of targeted products and related harms; (ii) generate revenues for health objectives and distribute the tax burden across income groups in an efficient and equitable manner; and (iii) be made politically sustainable.Methods: Six scientific and four grey-literature databases were searched for empirical studies of ‘health taxes’ – defined as those intended to increase the costs of manufacturing, distributing, retailing and/or consuming health-damaging products. Since reviews already exist of the evidence relating to traditional alcohol and tobacco excise taxes, we focus on other taxes such as taxes on retailers and manufacturers of unhealthy products, and consumer taxes targeting unhealthy foods, such as sugar-sweetened beverages.Results: Ninety-one peer-reviewed and 11 grey-literature studies met our inclusion criteria. The review highlights a recent, rapid rise in research in this area, most of which focuses on high-income countries and on taxes on food products or nutrients. Findings demonstrate that high tax rates on sugar-sweetened beverages are likely to have a positive impact on health behaviours and outcomes, and, while taxes on products reduce demand, they add to fiscal revenues. Common concerns about health taxes are also discussed.Conclusions: If the primary policy goal of a health tax is to reduce consumption of unhealthy products, then evidence supports the implementation of taxes that increase the price of products by 20{\%} or more. However, where taxes are effective in changing health behaviours, the predictability of the revenue stream is reduced. Hence, policy actors need to be clear about the primary goal of any health tax and frame the tax accordingly – not doing so leaves taxes vulnerable to hostile lobbying. Conversely, earmarking health taxes for health spending tends to increase public support so long as policymakers follow through on specified spending commitments",
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    author = "Alexandra Wright and Smith, {Katherine E.} and Mark Hellowell",
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    Policy lessons from health taxes : a systematic review of empirical studies. / Wright, Alexandra; Smith, Katherine E.; Hellowell, Mark.

    In: BMC Public Health, Vol. 17, 19.06.2017, p. 1-14.

    Research output: Contribution to journalArticle

    TY - JOUR

    T1 - Policy lessons from health taxes

    T2 - BMC Public Health

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    AU - Smith, Katherine E.

    AU - Hellowell, Mark

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    Y1 - 2017/6/19

    N2 - Background: Taxes on alcohol and tobacco have long been an important means of raising revenues for public spending in many countries but there is increasing interest in using taxes on these, and other unhealthy products, to achieve public health goals.Objective: We present a systematic review of the research on health taxes, and aim to generate insights into how such taxes can: (i) reduce consumption of targeted products and related harms; (ii) generate revenues for health objectives and distribute the tax burden across income groups in an efficient and equitable manner; and (iii) be made politically sustainable.Methods: Six scientific and four grey-literature databases were searched for empirical studies of ‘health taxes’ – defined as those intended to increase the costs of manufacturing, distributing, retailing and/or consuming health-damaging products. Since reviews already exist of the evidence relating to traditional alcohol and tobacco excise taxes, we focus on other taxes such as taxes on retailers and manufacturers of unhealthy products, and consumer taxes targeting unhealthy foods, such as sugar-sweetened beverages.Results: Ninety-one peer-reviewed and 11 grey-literature studies met our inclusion criteria. The review highlights a recent, rapid rise in research in this area, most of which focuses on high-income countries and on taxes on food products or nutrients. Findings demonstrate that high tax rates on sugar-sweetened beverages are likely to have a positive impact on health behaviours and outcomes, and, while taxes on products reduce demand, they add to fiscal revenues. Common concerns about health taxes are also discussed.Conclusions: If the primary policy goal of a health tax is to reduce consumption of unhealthy products, then evidence supports the implementation of taxes that increase the price of products by 20% or more. However, where taxes are effective in changing health behaviours, the predictability of the revenue stream is reduced. Hence, policy actors need to be clear about the primary goal of any health tax and frame the tax accordingly – not doing so leaves taxes vulnerable to hostile lobbying. Conversely, earmarking health taxes for health spending tends to increase public support so long as policymakers follow through on specified spending commitments

    AB - Background: Taxes on alcohol and tobacco have long been an important means of raising revenues for public spending in many countries but there is increasing interest in using taxes on these, and other unhealthy products, to achieve public health goals.Objective: We present a systematic review of the research on health taxes, and aim to generate insights into how such taxes can: (i) reduce consumption of targeted products and related harms; (ii) generate revenues for health objectives and distribute the tax burden across income groups in an efficient and equitable manner; and (iii) be made politically sustainable.Methods: Six scientific and four grey-literature databases were searched for empirical studies of ‘health taxes’ – defined as those intended to increase the costs of manufacturing, distributing, retailing and/or consuming health-damaging products. Since reviews already exist of the evidence relating to traditional alcohol and tobacco excise taxes, we focus on other taxes such as taxes on retailers and manufacturers of unhealthy products, and consumer taxes targeting unhealthy foods, such as sugar-sweetened beverages.Results: Ninety-one peer-reviewed and 11 grey-literature studies met our inclusion criteria. The review highlights a recent, rapid rise in research in this area, most of which focuses on high-income countries and on taxes on food products or nutrients. Findings demonstrate that high tax rates on sugar-sweetened beverages are likely to have a positive impact on health behaviours and outcomes, and, while taxes on products reduce demand, they add to fiscal revenues. Common concerns about health taxes are also discussed.Conclusions: If the primary policy goal of a health tax is to reduce consumption of unhealthy products, then evidence supports the implementation of taxes that increase the price of products by 20% or more. However, where taxes are effective in changing health behaviours, the predictability of the revenue stream is reduced. Hence, policy actors need to be clear about the primary goal of any health tax and frame the tax accordingly – not doing so leaves taxes vulnerable to hostile lobbying. Conversely, earmarking health taxes for health spending tends to increase public support so long as policymakers follow through on specified spending commitments

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    KW - public health

    KW - hypothecation

    KW - earmarking

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    KW - fat tax

    KW - soda tax

    KW - tobacco

    KW - alcohol

    KW - systematic review

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