For years, doctors, public health professionals, and policymakers have been trying to deter people from unhealthy lifestyles choices, such as smoking and poor eating habits. One strategy employed by states in the constant battle to reduce consumption of unhealthy products is the use of excise taxes, with many countries applying such taxes to the sale of cigarettes and alcoholic beverages. In fact, the concept of taxing tobacco and alcohol dates back to the 1776 publication of The Wealth of Nations in which Adam Smith argued, "Sugar, rum, and tobacco, are commodities which are no where necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” Excise taxes serve two purposes. They are a source of revenue for governments, which can be earmarked for healthcare expenses, and they discourage the consumption of harmful products.

Today, many developed and developing countries including European Union nations, Australia, South Africa, Egypt, Turkey, Bangladesh and Vietnam apply excise taxes to unhealthy products. Research has shown that both for tobacco and alcohol, excise taxes are an effective way of reducing consumption. With respect to tobacco, a 10 percent price increase in cigarettes is shown to reduce demand by 4 percent in high-income countries and by 8 percent in low-middle income countries. Taxes imposed on cigarettes have not only prevented people from starting to smoke, but have also reduced rates of relapse for those who recently quit smoking.

Noting the impact of excise taxes on cigarette consumption and tobacco-associated disease, some European countries have also applied similar taxes to the sales of unhealthy foods. Hungary was among the first countries to introduce special taxes on foods that have a high sugar, fat, salt or caffeine content. It is estimated that these special taxes will result in 170 million Euros of additional revenue for the Hungarian government, which will be earmarked for health care expenditures and obesity reduction programs. Denmark has introduced a saturated fats tax; the tax is added to foods that have a saturated fat content of 2.3 percent or greater. France has also begun applying special taxes to drinks that have high sugar contents.

Some experts are pushing for the expansion of these taxes to other European nations. Dr. Mike Rayner, director of the Health Promotion Research Group at Oxford University, says that a quarter of British adults suffer from obesity. He argues that a 12 pence tax added on soft drinks in the United Kingdom would sufficiently reduce the consumption of these beverages to save several thousand lives each year. "We're in the grip of an obesity crisis. As a nation we're consuming too many calories and eating too much cheap, energy-dense food, like crisps, chocolate bars or fizzy drinks", he says. Rayner recognizes that tackling only one type of food may not be the solution. With regards to the system currently in place in Denmark, which taxes only foods with saturated fats, he says, "They've got the right idea, but a lot of the low-fat foods in Britain are high in salt, so we might be tackling one problem only to create another.”

In the Untied States, there has also been a push to deter people from consuming unhealthy foods through special excise taxes. Much of the effort has focused on taxes applied to sugary drinks. In 2009, the Centers for Disease Control stated that a chief strategy for reducing the obesity epidemic in the US would be to promote lower consumption of sugary drinks. The Institute of Medicine has also advocated fiscal policies to promote consumption of less sugary beverages. Currently, 40 states impose a tax on sugary drinks, but critics have argued that the rates of these taxes are too low to result in changes in behavior. In 2011, 15 states proposed new legislature that would place additional special taxes on sugary drinks, but these proposal did not pass state legislatures.

Studies looking at impact of excise taxes on food consumption are limited, but there is some evidence to support the concept. A study published in the Archives of Internal Medicine in 2010, examined the trends of pizza and soda prices over a 20-year period and found that small increases in the price of these foods resulted in lower levels of consumption. There is also data to suggest that food price increases may be a more effective method than health intervention messages in promoting healthy eating habits.

Making conclusive assertions based on these studies is challenging because it is hard to examine the effects of taxes on long-term health outcomes in a controlled fashion. Ultimately, data showing the impact of these taxes on the incidence of diabetes and cardiovascular disease would provide more conclusive evidence. In the meantime, as nations deal with epidemics of diabetes, obesity, and cardiovascular disease, applying such taxes in a piloted fashion and carefully studying their results will provide more information and likely have a positive impact on the long-term health of the population.