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Who Benefits from Repealing Tampon Taxes? Empirical Evidence from New Jersey

36 Pages Posted: 18 Jul 2017 Last revised: 5 Feb 2018

Christopher Anthony Cotropia

University of Richmond - School of Law

Kyle Rozema

University of Chicago - Law School

Date Written: February 5, 2018

Abstract

Many state and local governments exclude some medical products from the sales tax base, including some that are primarily used by men such as hair growth products. However, tampons and other menstrual hygiene products are subject to sales taxes in most states. A recent social movement advocates for the repeal of these “tampon taxes” and several class action lawsuits have been filed against states citing Equal Protection violations. In this article, we use the 2005 elimination of menstrual hygiene products from the sales tax base in New Jersey as a natural experiment to study who benefits from the repeal of tampon taxes. We find that the tax break is fully shifted to consumers, but that the tax break is not distributed equally. Low-income consumers enjoy a benefit from the repeal of the tax law by more than the size of the repealed tax. For high-income consumers, the tax break is shared equally with producers. The results suggest that repealing tampon taxes removes an unequal tax burden and could make menstrual hygiene products more accessible for low-income consumers than previously thought.

Keywords: Tampon Taxes, Tax Incidence

JEL Classification: K34, H22

Suggested Citation

Cotropia, Christopher Anthony and Rozema, Kyle, Who Benefits from Repealing Tampon Taxes? Empirical Evidence from New Jersey (February 5, 2018). Available at SSRN: https://ssrn.com/abstract=2999970 or http://dx.doi.org/10.2139/ssrn.2999970

Christopher Anthony Cotropia

University of Richmond - School of Law ( email )

28 Westhampton Way
Richmond, VA 23173
United States

Kyle Rozema (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

HOME PAGE: http://www.kylerozema.com

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