• TheDMonline.com Staff Member?
  • Log In
Share |

Cutting grocery tax does more harm than good

 

In Mississippi, it seems that just about every year there is a movement to cut the grocery tax.

The Mississippi grocery tax, though, actually isn’t a grocery tax. It is simply the sales tax that applies equally to sales of food for consumption in the home.

The 7 percent applies to the purchase of groceries as equally as it does to the purchase of any good. I seem to be missing the unfairness in that.

The main argument backing an exemption of groceries from sales tax stems from a desire to ease the cost of groceries for low-income families.

While it is admirable to want to ease the cost for low-income families, supporters seem to forget that Supplemental Nutrition Assistance Program (SNAP) benefits are tax-exempt, meaning the grocery tax already does not apply to low-income families.

Therefore, only mid- and high-income families will feel the effect of eliminating the sales tax for groceries.

Of course, everyone wants to pay fewer taxes, so many unwittingly support the idea of exempting groceries. 

A 2008 report by the Southern Agricultural Economics Association estimated that Mississippi would lose around $202 million in tax revenue. Where do supporters suggest Mississippi make that revenue up? Should we increase other taxes to make up $202 million? If so, how is that really helping anyone?

I would prefer to pay 7 percent on groceries than have my income tax increase because I have control over how much I spend on groceries.

Ultimately, the debate over the grocery tax boils down to cost and benefits. The cost for the state is obvious: net loss of $202 million in revenue. 

The benefits on the other hand are not easy to find. Families will have more money to spend, but will they spend that money on more groceries or items that can be taxed?

If they spend it on other items that can be taxed, are they really receiving a tax break? No. Instead, it is just a tax shift.
Families will still be bearing the burden of a tax if they choose to spend the money elsewhere.

The state of Mississippi is at a point where revenue is desperately needed. Any attempt to cut taxes in a way that won’t stimulate the economy is not only pointless but also detrimental to the state and the citizens of the state.

Eliminating the sales tax for groceries does far more harm for the state and citizens than good. The costs greatly outweigh the benefits.

Many might point out that Mississippi is one of few states that taxes groceries and that the state has the highest grocery tax rate of all states. However, they will fail to point out that Mississippi also ranks near the bottom of income tax revenue.

Other states can survive without the revenue from a grocery tax because they bring in more revenue from other taxes and fees.

The grocery tax is a necessity in Mississippi and because low-income families on SNAP benefits are already exempt from this tax, the support for elimination of the grocery tax falls on its head.

 

Trenton Winford is a sophomore public policy leadership major from Madison.