New research out of Cornell University is proving how even the slightest mandated sales tax on grocery food items is likely causing food insecurity within low-income neighborhoods.
Harry Kaiser co-authored the study dubbed, “Putting grocery food taxes on the table: Evidence for food security policy-makers.” Researchers found that one-third of all U.S. counties do not exempt grocery foods from the general sales tax, which can become a major problem for the lowest income families, Cornell Chronicle reports.
Kaiser and his team of researchers discovered that, across 14 states, the average grocery tax is just over 4%, via Eurek Alert. Currently, a total of 17 states impose a tax on grocery food items with several states considering their options on whether to remove or impose the taxes.
“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,” Kaiser said. “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 sold at retail outlets like grocery and convenience stores and left out dining at restaurants. With a threshold that was based on the federal poverty level, Kaiser and his co-authors looked at data taken from low-income households in the 48 contiguous states plus Washington D.C. and excluded households with annual income above $30,000.
In Alabama, for example, the grocery sales tax can go as high as 9%, leading to an average annual expense of $630 in grocery taxes. For households with an income below $30,000, the annual sales tax on groceries could take out a sizeable portion of their household income. If states removed the mandated sales tax on grocery food, Kaiser’s team predicts that the average food insecurity for households near the poverty level will decrease by 3.2%.
“We hope that by sharing our current data and findings on grocery taxes as it relates to food insecurity,” Kaiser said, “policymakers will take a much closer look at the tax burden in certain areas which are hit hardest.”