Food. Producing it, procuring it, and preparing it takes up a lot of our time. Most love it, some have a complicated relationship with it, but all of us need it.
Due to the realities of our modern system, most people don’t work the soil or hunt animals to get food — and neither can they afford to. Instead, they buy it at a grocery store, where others better equipped for the task have done the work for them. Such is one of the many marvels of a market economy.
Unfortunately, we’re sometimes punished for obtaining what we need to survive.
According to the Pew Charitable Trusts, lower-income families spend a considerably larger percentage of their money on basic necessities like food than anyone else. This makes sense because these necessities are called necessities for a reason: they’re not optional. If you have less money to spend, you’ll still have to pony up for food, shelter, and toilet paper (unless you’re very dedicated).
Now, many governments in the United States charge sales taxes in order to pad their budgets. These taxes are collected by retailers at the time of the purchase, so many people hardly think about them. And, because they’re in proportion to the amount of money spent, some suggest that they’re “voluntary” or “optional.”
The obvious hole in this reasoning is that, like I just pointed out, a lot of these expenses are not optional. Not only that, but one of the implications of the data is that any tax on food would disproportionately affect lower-income families. Realizing this, governments wrote in exemptions for grocery purchases. Well, not all of them.
The above map shows which states (plus Washington, D.C.) include groceries in their sales tax, which ones tax groceries at a lower rate, which ones exclude groceries from taxation, and which ones charge no sales tax at all.
What the map does not reveal is that some localities — such my own Chandler, Arizona — flout the wisdom of their own states and impose an additional tax that includes grocery purchases.
Grocery tax is a poverty fine. It’s an unavoidable penalty that disproportionately affects the poor.
According to the USDA, a low-cost food plan for a family of four can cost $838.90 a month, or $10,066.80 a year. Assuming these costs remain more or less consistent throughout the country, my city may charge a frugal family of four roughly $151.00 every year just for feeding themselves (at the rate of 1.5%). And, it gets worse. At a combined rate of 10%, families in Montgomery, Alabama may pay as much as $1,006.68 every year.
These taxes can be found across the country, and in many areas, they either pass unnoticed or are accepted without question. To make matters worse, the people who this problem impacts the most have very little influence. Having only recently discovered how common and insidious the poverty fine is, my question is, are we going to let this slide?