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The Hidden Price of Being a Woman

2018 was the “Year of the Woman”; across the U.S., citizens are rightfully excited by the significant rise in both female Congress-members and female voters that fractures the male-dominated tradition of the political world. However, despite this progress in congressional demographics, the U.S. still sports fundamental gender inequalities that are written into the tax law, including the so-called “tampon tax” as well as the pervasive markup on female consumer goods, or the “pink tax.” The tampon tax, or the sales tax on feminine menstrual products such as tampons and maxi-pads, costs an estimated $275 million a year to Americans who menstruate. Unlike other consumer goods that count as medical or necessary expenses such as condoms, sunscreen, band-aids, and in some states even Chapstick, Viagra, dandruff shampoo, cowboy boots (Texas), gun club memberships (Wisconsin), and chainsaws (Idaho), menstrual products receive no sales tax exemption. Similarly, women pay an additional $1,351 every year due to the “pink tax,” or the price markup on female-specific products in comparison to gender-neutral or male products.

Facing gender-based price discrimination from both public and private actors, women in the U.S. pay more for consumer goods; this exemplifies the complex and socially embedded gender disparities that persist in America, where women earn less and pay more. To secure true women’s equality in 2019 and beyond, the U.S. government must prioritize an abolition of the tampon sales tax and consider heavier regulation on private companies to enforce non-discriminatory pricing. Americans across the nation must also use their power as consumers to avoid blatantly discriminatory products and demand private firms to end the pink tax practice.

Overall, the U.S. lags behind the international community when it comes to gender-based tax equality. Only ten states have successfully dropped the tampon tax: Minnesota, Illinois, Nevada, Pennsylvania, New York, Massachusetts, Maryland, New Jersey, Connecticut, and Florida. To make matters worse for female consumers, certain federal assistance programs (like SNAP and WIC) don’t allow the use of an Electronic Benefits Transfer, the system for transferring government benefits from a Federal account to a retailer account to buy products, for menstrual items despite the products’ FDA classification as medical devices. Unlike the FDA, the IRS does not acknowledge a “medical device” classification for these products, thus blocking women from buying menstrual necessities with pre-tax dollars in both flexible spending accounts and health savings accounts. In other words, women cannot use their food stamps for tampons or pads. Meanwhile, countries such as Kenya, Uganda, Canada, Malaysia, India, and Australia have removed the so-called tampon tax to make these necessary products more affordable. The meager number of U.S. states who have ended the tampon tax, the inability to apply Food Stamps to menstrual products, and the U.S.’s position behind the international community elucidate how the American tax and welfare system needs to do better for women.

To improve these systems, state lawmakers must pass legislation to exempt tampons and other hygiene products from the sales tax. In December, the Ohio House passed a bill doing just that, offering an example that other states must follow. Similarly, voters can take charge of this issue through state ballot initiatives, using their collective votes to influence change and reform discriminatory state tax laws. Other examples of positive legislative efforts include Representative Grace Meng’s (D-NY) bill that would allow employees to use flexible spending accounts to buy pads and tampons and would require companies with more than 100 employees to provide them for free. The IRS and federal welfare system must also designate menstrual products as medically necessary, as the FDA does, to allow women to use federal assistance dollars towards tampons and pads.

Unfortunately, this female-specific cost is not unique to government taxes. In the private sphere, the “pink tax”, the price markup of female-specific goods, also persists. In a 2015 study, the New York City Department of Consumer Affairs compared around 800 products from more than 90 brands. The study found that women pay more in 30/35 product categories; in the category of personal care products, women pay on average as much as 13 percent more for the same or comparable good as men. Across the board of product categories, women pay an average of 7 percent more. This discrepancy is a perfect example of the economic concept of price discrimination. Although economic theory holds that price discrimination is economically efficient, it also represents a flagrantly unfair market and should be remedied through non-market entities. In the case of the pink tax, women’s’ products see a markup despite having no difference in quality. This markup comes from pure marketing tactics where firms take advantage of a captive market. The pink tax represents a market failure, which as NPR’s Planet Money suggests, shows why we need institutions and governments to ensure that markets operate fairly.

The U.S. government can use legislation to influence private firms and encourage more fair pricing schemes. States like New York and California illustrate how regulating gendered price discrimination of companies can take place. In 1995, California became the first state to enact a bill protecting consumers from price discrimination for services. Since then, Massachusetts, D.C., Virginia, and New York have followed suit. However, there is no government protection for gender pricing of consumer goods, or the pink tax. While California has made several attempts to remedy the markup on female goods, its most recent effort to end gender-based price discrimination—Senate Bill 899—has failed to pass or gain any significant momentum. Legislators across the nation must continue to introduce and fight for this sort of bill nationwide, while consumers and firms must also recognize and organize against discriminatory pricing schemes.

Consumers can work alongside government to dismantle this pink tax by using their economic power to disrupt unfair markets with antiquated equilibriums. In 2017, Cone Communications published a study which concluded that 78 percent of people want companies to address social justice issues. One in three millennials said they would boycott or support businesses based on causes that matter to them. As socially responsible consumerism continues to grow, there is hope that consumer power will drive fairer prices. Consumers across the U.S. can support the eradication of the pink tax by avoiding flagrantly discriminatory products and endorsing new, up-and-coming brands aiming to end the pink tax, such as the razor brand Billie, or the period company Lola.

Both companies and the government are guilty of charging American women higher prices for medically necessary menstrual hygiene products and general consumer goods. Though codified in state tax code and in the long-standing practices of private companies, this discrimination must end. To remedy this unfair tax policy and price discrimination, states must prioritize dismantling the sales tax on women’s hygiene products and consider stricter regulation on private firms to end gender-based pricing. American consumers must also stop buying and supporting overtly discriminatory “feminine” products, instead ought to “vote with their wallets” by spending on products with social responsibility at the forefront of their value proposition. As the U.S. continues to aim for gender equality and elect more and more women into office, continued activism, legislation, and consumer watchdog diligence must persevere.

Photo: “Piggy Bank

About the Author

Lucia Winton '21 is a Staff Writer for the US Section of the Brown Political Review. Lucia can be reached at lucia_winton@brown.edu

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