- Eliminating state sales taxes on feminine hygiene products led to a full pass-through of tax savings to consumers, with no evidence of price increases.
- Sales quantities of feminine hygiene products increased by about 2% after tax removal.
- Low-income households showed a much larger increase in demand compared to other groups.
- Means-tested cash transfers would provide 4 to 10 times more benefit per recipient than broad tax exemptions.
- The study highlights tradeoffs between equity, efficiency, and targeting in consumption tax policy design.
Source: papers.ssrn.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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