To impose higher taxes on sodas and sweetened drinks means generating more revenue for the government as it aims to foster weight loss. But among other concerns, the household income effect on consumers whether in the highest or the lowest income levels would be minimal and same as with loss of weight, according to a new research conducted at the Duke National University of Singapore Graduate Medical School.

This study was led by Eric Finkelstein, PhD, who is an associate professor of Health Services at the abovementioned School. This involved observing the differential impact on the number of calories and weight on a 20-40% tax on sodas and sweetened beverages from among various income groups. The study came at a time when policy makers are trying to consider adding taxes on sweetened beverages as tool for improved health and raising the revenue in its aim of offsetting budget deficits. Several researches showed that excessive consumption of drinks containing more sugar is a way to gain weight and has caused obesity in the country.

Information gathered from a US household database by the researchers have tracked the food and beverage purchases from stores during a period of twelve months. The database included information on the size of households, cost and quantities of drinks and foods, demographics, and the UPC code. The team examined purchases of drinks like sodas, the diet kinds, sports and energy drinks, fruit juices, whole and skim milk. They used statistical methods to see how the products affect household purchasing habits.

The research calculated real weight loss and weight loss on household income that resulted from reductions on soda purchases brought about by tax and weight gains caused by switching from beverage to another. When consumers shift from an ordinary cola to the diet kind or water, it cannot make up for gains. If the shift happens to other higher calorie beverages, then the effects of the tax is attenuated.

Study shows that if the government imposes a sales tax raising the price of these beverages as purchased by twenty percent, a generated income estimated at $1.5B a year in taxes will be seen. If taxes are raised to forty percent would be able to cash in $2.5B in a year, costing an average household around twenty eight dollars.Actual weight losses cannot be guaranteed as its effect on the number of calories would be relatively minimal. But due to its higher price, this alone is left to guarantee a decrease in weight for some, but still, there are people coming from lower income brackets that would tend to shift to other generic brands to suit their budget. People coming from higher income groups would be unfazed by the changes on the tax amount as they can afford to buy drinks and likewise can afford themselves in gaining much more weight. There had been an idea that sprang out from the mind of the co-author of this study; a secondary benefit from the tax can be used by the government in funding obesity prevention and this can be benefited by some coming from the lower income levels.