Once again, there is no ‘tampon tax’

“CVS cuts cost of menstrual products in 12 states with ‘tampon tax’” is the CBS News headline. Others have similar headlines. CBS begins its article this way: “CVS Health is lowering the price of menstrual products in 12 states, including in Texas, where attempts to repeal a so-called ‘tampon tax’ have so far failed.”

Oooh, Texas! Must be right-wing misogyny!

ARMY SECRETARY GETS PUSHBACK AFTER DENYING MILITARY ‘WOKENESS’ PROBLEMS

The reaction is predictable.

https://twitter.com/bcdctx/status/1580178747839287296
Sigh, no. There is no “tampon tax.”

Consider for a second what that phrase implies, and consider how we generally talk about taxes.

The income tax is a tax on income and only income. The capital gains tax is a tax that applies only to capital gains. The whiskey excise tax was a tax only on whiskey. The tea tax was a tax on tea. The gift tax is a special tax you pay when you give an exceptionally large gift.* Texas has a hotel occupancy tax, which is a tax you pay when you stay in a hotel.

Texas has no tampon tax. It has a 6.25% retail sales tax, which stores collect from you when they sell you things. This tax applies to the sale of most goods you could buy, including hand saws, wiffle bats, and rubber chickens. Nobody would say Texas has a “rubber chicken tax.” So why do activists and media outlets say Texas and other states have a “tampon tax”?

Because Texas doesn’t exempt tampons from the tax and activists and reporters believe Texas should exempt tampons. They might have a fine argument, but it doesn’t justify the use of the term “tampon tax.”

In Texas, groceries (but not prepared foods) are exempt from sales tax, along with prescription drugs and over-the-counter medicines. So you can see why someone might think, “If Midol is exempt from the sales tax, why aren’t tampons?”

It’s a fair question, and the answer is “the state has to draw the line somewhere.” The next question is, why do CVS and implicitly the news media believe the line should be drawn so that tampons are exempt but other necessities, such as diapers or soap or toothpaste, are taxed? Should we not be incensed about the soap tax and the toothpaste tax?

And if we exempt toothpaste, do we exempt mouthwash? What about the kind of mouthwash that just whitens your teeth but doesn’t kill mouth germs?

You see how there’s an endless number of gradations here that, as you can imagine, leads to an endless amount of lobbying by manufacturers and wholesalers. Josh Barro wrote a good New York Times story on this a few years ago, in which he quoted tax expert Joe Henchman: “It’d be nice if necessities weren’t taxed, but necessity is subjective.”

To hash this all out, states end up writing very complicated regulations. As Barro reported: “In 2010, Wisconsin’s revenue department released a 1,400-word memo titled ‘Sales of Ice Cream Cakes and Similar Items.’ As the memo describes, sometimes an ice cream cake in Wisconsin is a tax-free baked good; in other cases, it’s a taxable prepared food. The question hinges on several factors, including the size of the cake, who decorated the cake, whether a majority of the cake’s layers contain flour and whether the seller provides utensils along with the cake.”

The only alternative to this sort of complexity (and the only way to avoid the potentially corrupting lobbying that goes along with it) is to just have a lower sales tax rate with zero exemptions. If you want to soften the impact of the sales tax on people buying only the necessities, you could just give every taxpayer an automatic prebate of $500 at the start of the year.

Even then, you would have journalists and activists crowing about the “tampon tax,” because that’s how such people make their living, and you would also have CVS trying to win woke points by pretending its discounted store brands are battling some social injustice.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
——
*CORRECTION: Originally, I wrongly wrote that the recipient pays the gift tax.