Last month, Philadelphia became the second city in the U.S. to implement a tax on sodas and sugary drinks. The City Council passed the 1.5-cents-per-ounce soda tax with a vote of 13 to 4 but not without heavy opposition from some groups, who often conflated the soda tax with a grocery tax, saying it would unfairly burden low-income consumers.
Grocery taxes exist in 16 states, and recent research suggests that tax is the real source of financial pressure for low-income people, and contributes to food insecurity.
Researchers from Auburn University, Cornell University, and the University of Kentucky found the average rate for grocery taxes was 4.3 percent.
The three states with the highest level of food insecurity are Mississippi, Arkansas and Alabama, according to 2014 data from Feeding America. All three states have a grocery tax in place, with the grocery tax in Mississippi and Alabama equal to their relative sales taxes.
A study in Kansas published earlier this year also showed that charging state sales tax on groceries harms the poor, local economies, and the state's budget – because some residents drive to other states to purchase food.
Many states have been successful in eliminating their grocery tax. In 2013, West Virginia removed their whopping 6 percent food tax, even though it cost the state $174 million in revenue. Gov. Earl Ray Tomblin called the tax "regressive," saying, "the elimination of the food tax allows families to keep more of their hard-earned money." Since then, West Virginia families have saved $162 million each year. South Carolina also eliminated its grocery tax in 2007.
The new study also examines the differential impact of the grocery tax on those who participate in the Supplemental Nutritional Assistance Program, and those who do not, since food purchased using SNAP benefits is tax-free. The researchers found that grocery taxes had a positive impact on increasing the probability of non-SNAP participants being food insecure.
Based on these results, the study suggests that besides eliminating the food tax, targeting households that are eligible for, but not currently participating in, the SNAP program, is the best way to reduce food insecurity in states with a grocery tax.