Improving Value

Sin Taxes

Sin taxes are financial incentives designed to discourage unhealthy behaviors like smoking, the consumption of sugary beverages, and excessive drinking. By taxing cigarettes, for example, policy makers hope to discourage an unhealthy behavior by making it more expensive. Since smoking adds to society’s disease burden and increases healthcare costs for everyone, this is a way to raise revenue for these added healthcare costs. The revenue these taxes can produce can be earmarked for public health initiatives.

Soda taxes have recently been passed in several U.S. cities. As of November 2016, Philadelphia, and the California cities of San Francisco, Oakland, Albany and Berkeley had passed soda taxes. These taxes are meant to spur consumers to decrease consumption of sugary drinks and, ultimately, reduce healthcare costs. Another strategy, used in England, targets soda makers by taxing sugar. It has been successful in encouraging soda makers to cut the amount of sugar in their products.

Click here for more information on public health strategies.