Grocery taxes put low-income families at risk for food insecurity

https://www.eurekalert.org/pub_releases/2021-05/cu-gtp052621.php

 

News Release 26-May-2021
Cornell University

 

Approximately one-third of all U.S. counties do not exempt grocery foods from the general sales tax, which means the lowest-income families living in those areas are most susceptible to food insecurity. New research from Cornell University finds that even a slight grocery tax-rate increase could be problematic for many.

"An increase of 1% to 4% may sound small, but after several trips to the grocery store, the extra costs can create serious burdens for the lowest-income families," said co-author Harry Kaiser, professor of applied economics and management in the Charles H. Dyson School of Applied Economics and Management. "We found that even the slightest increase in tax rate correlated to an increased likelihood of food insecurity. Grocery taxes that rose by just one percentage point led to a higher risk of hunger in households."

The study focused on sales taxes on foods at retail outlets such as grocery and convenience stores. Kaiser and his co-authors found that, across 14 states, the average grocery tax is just over 4%.



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In Alabama, for example, where the grocery tax rate is as high as 9%, the average annual expense in grocery taxes is $630. For households living at or near the poverty level, this tax expense represents a sizeable portion of their household income.

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