Who Would Benefit from Repealing Tampon Taxes? Empirical Evidence from New Jersey

40 Pages Posted: 18 Jul 2017 Last revised: 19 Jul 2017

Christopher Anthony Cotropia

University of Richmond School of Law

Kyle Rozema

University of Chicago - Law School

Date Written: July 12, 2017

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” on the grounds that tampon taxes (a) create an unequal tax burden between men and women because only menstruating women must pay a tax on products that men do not use, and (b) decrease the affordability of these necessary products, particularly for lower income women. To date, however, no empirical research has documented the extent that repealing tampon taxes would benefit women by lowering consumer prices, and how any tax benefit is distributed among women of different socio-economic backgrounds. It is possible that eliminating tampon taxes would lead to an increase in before-tax retail prices such that consumer prices for the products do not decrease by the full size of the repealed tax. This would imply that consumers and producers share the benefit of the tax repeal.

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 consumers obtain most of the tax benefit from the repeal, but that the tax benefit is not distributed equally. Low income women obtain a benefit from the repeal of the tax law by more than the size of the repealed tax. For higher income women, however, the benefit of the tax repeal is shared roughly equally with producers. The results suggest that repealing tampon taxes removes the unequal tax burden for menstruating women and could make tampons more accessible for low income women than previously thought.

Keywords: Tampon Taxes, Tax Incidence

JEL Classification: K34, H22

Suggested Citation

Cotropia, Christopher Anthony and Rozema, Kyle, Who Would Benefit from Repealing Tampon Taxes? Empirical Evidence from New Jersey (July 12, 2017). Available at SSRN: https://ssrn.com/abstract=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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