This narrative review examines key research from 2018 to early 2024 that addresses the taxation of unhealthy products, specifically tobacco, alcohol, and sugar-sweetened beverages (SSBs). It begins with a brief review of recent trends in consumption of these products, examines trends in relevant tax policies, reviews evidence on the impact of these taxes on prices, demand and health outcomes and ends with a discussion of the most recent research on industry counterarguments to implementing and raising taxes. Consumption trends are uneven for tobacco: while some countries show declines, worrisome upward trends, particularly for youth, remain in some regions/countries. Alcohol and SSBs show more consistent upward consumption trends, globally. Progress on taxation for tobacco and alcohol has been uneven recently. Though tobacco taxation has a much higher starting point than for the other two products, much of the modest progress in the 2010s has stalled in most countries. Across countries with excise taxes on cigarettes, the average tax share of cigarette retail price was 42 percent in 2022, scarcely higher than the 41.4 percent in 2020, and far below the World Health Organization benchmark of 70 percent. The result is 87 percent of smokers live in countries where cigarettes were equally or more affordable in 2022 than in 2016. Alcohol taxes comprise a much lower share of price compared to tobacco and have shown scant improvement across most countries in the last decade – indeed, the number of countries reporting the use of alcohol excise taxes is decreasing. While there has been a substantial increase in the number of countries with SSB taxessince 2018, SSB taxes as a share of prices is, on average, very low, at only 18.4 percent. By contrast, evidence from the US suggests SSB taxes should increase prices by at least 40%. For each of these products, failure to regularly increase tax rates – at a minimum, in line with inflation – is leading to an erosion of impact. Research on demand is unequivocal for all three products: consumer demand is significantly responsive to price. This implies that taxes are an excellent tool for decreasing demand. The evidence that higher taxes on these products improve a wide variety of health outcomes continues to build. Similarly, there is mounting evidence showing that 1) higher taxes on unhealthy goods are progressive at a population level; 2) health taxes scarcely negatively affect overall employment, if at all; and 3) illicit trade does not undermine the overall goals of these taxes, is generally much smaller than these industries claim, and can be successfully mitigated by improved tax administration including enhanced enforcement.

Drope, J., & Powell, L. M. Using Fiscal Policy to Promote Health: A Five-Year Update on Taxing Tobacco, Alcohol and Sugar-Sweetened Beverages.