A person shops for groceries at Lincoln Market on March 10, 2022 in the Prospect Lefferts Garden neighborhood of Brooklyn borough in New York City.
Michael M. Santiago | Getty Images
New government inflation data shows prices are surging in one key area – food.
Now some states are looking at helping to reduce that burden on consumers by curbing their taxes on groceries.
But such moves may not be the most beneficial to those who such policies aim to help – low-income taxpayers, according to a new report from the Tax Foundation.
What’s more, the policies would only provide modest tax savings to the middle class, the report found.
More from Personal Finance:
Nearly risk-free I bonds may soon pay 9.62% interest
Smart money moves to make amid high inflation, rising interest rates
Ways to save money at the gas pump amid inflation
A better solution may be to provide a one-time credit of $75, for example, which could help the poorest households save 31% on their tax liability, the independent tax policy nonprofit found.
“There are far better ways to help lower- and middle-income households, including grocery tax credits, than the grocery tax exemption,” said Jared Walczak, vice president of state projects at the Tax Foundation.
Currently, 13 states impose levies on groceries.
Seven states tax groceries at the level of the ordinary sales tax rate, including Alabama, Mississippi and South Dakota. The other four states — Hawaii, Idaho, Kansas and Oklahoma — also provide a credit or rebate to low-income households.
The other six states —…
Read complete post here: