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

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 Low‐income consumers enjoy a benefit from the repeal of the tax by more than the size of the repealed tax.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.

Guest Editorial: Conceptualizing Justice and Counter-Expertise

“…Taxing feminine hygiene products perpetuates both gender-discrimination and economic-discrimination (Larimer, 2016). Cotropia and Rozema (2018) find that, in the United States, low-income women would benefit more from the removal of this tax than high-income women.…”

VAT Pass-Through: The Case of a Large and Permanent Reduction in the Market for Menstrual Hygiene Products

“…Additionally, this paper contributes to the small literature on menstrual hygiene products and taxation. Cotropia & Rozema (2018) also studied the effect of the elimination of sales taxes on menstrual hygiene products. They used consumer panel data from New Jersey in 2005 and used a diff-in-diff analysis to identify the effects on different consumer groups, e.g., differentiated by income and educational background.…”

Does the Bar Exam Protect the Public?

“…In a final approach, I use the bootstrapped samples from the previous approach to run placebo tests in the spirit of Conley and Taber (2011). In difference-in-differences settings with few events, placebo tests are a common way to make inferences, which are drawn from asking whether the changes in some outcome in the treatment group from before to after some policy change could fit within the distribution of the changes in the outcome in the control groups in different periods (e.g., Baker et al, 2008;Cameron et al, 2008;Cameron et al, 2011;Cameron & Miller, 2015;Cotropia & Rozema, 2018). I tailor the placebo tests to this setting to draw inferences in a way similar to what is suggested and commonly done in prior research.…”