Examining Hunger in America: The Impact of Grocery Taxes

Americans often perceive hunger as a concern limited to distant regions with widespread poverty and instability. However, data contradicts this view. The USDA reports that approximately 14% of U.S. households experience food insecurity, and one in five children face uncertain access to adequate nutrition. Hunger is a pressing issue within the United States, affecting urban, suburban, and rural communities.

Several factors contribute to food insecurity in the U.S., such as rising housing costs, stagnant wages, and increasing expenses for gasoline, utilities, and food. These dynamics force households to make difficult choices between essential needs like rent, food, and medicine.

One often-overlooked factor is grocery taxes.

While most states do not tax groceries, acknowledging food as a necessity, nine states still impose such taxes. In some areas, combined levies result in food tax rates nearing 9%. These states often have severe food insecurity issues. Even minor increases at checkout can significantly impact families struggling with basic needs.

Research by university scholars, including myself, indicates that a 1% rise in grocery tax rate can increase the likelihood of food insecurity by nearly the same percentage among low-income households. The problematic nature of grocery taxes lies in their regressive nature, further burdening those already at risk of hunger.

Moreover, retailers sometimes exacerbate this issue. Studies reveal that stores may exaggerate tax impacts by raising prices more than the tax amount. For each dollar in grocery tax, consumers might pay an additional $1.44 at the register. This effect is notably acute in discount stores, frequented by low-income shoppers.

Grocery taxes aim to generate state revenue, yet evidence suggests they may intensify hunger in the U.S. Although not the sole cause of food insecurity, grocery taxes are a precise policy lever immediately affecting consumers’ food choices. State governments have the power to address this problem by eliminating grocery taxes.

Replacing lost revenue requires alternative taxation strategies. Progressive tax systems, such as income tax adjustments, could relieve pressure on financially struggling families. Other options include property taxes or targeted taxes on non-essential items like alcohol and tobacco.

Public services should not be funded by increasing costs for those least able to afford them. Grocery taxes may seem administratively convenient and politically harmless, but they unevenly burden those who can least manage them.

Hunger in the U.S. results from policy choices, including taxing basic necessities. Reevaluating these decisions could guide the nation towards reducing hunger and supporting vulnerable households.

Harry M. Kaiser is the Gellert Family Professor of Applied Economics and Management at Cornell University.

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