How eliminating tax on groceries could help consumers
If the tax on groceries were eliminated, the typical family of four in Missouri would save more than $60 per month, reports First Alert 4.
It could have an especially positive impact on some of the state's poorest residents, believes Coleman, telling the Missouri Independent, “I still think that this is the right solution, to create this carve-out, because our poorest citizens are having to pay regressive taxes.”
Swiftly, a retail technology provider, found that an estimated 70% of people nationwide struggle with grocery affordability. Reducing costs by $60 a month could provide some breathing room for these individuals — and especially for the 13% of state residents who lie below the poverty line in Missouri.
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Learn MoreHow municipalities could be affected
Unfortunately, the relief to individual families could come at the cost of the stability of municipalities around Missouri, says Mayor Dimmitt.
Dimmitt told First Alert 4 that the city of St. Louis would lose around $22 million in annual revenue, while Brentwood would lose $4 to $5 million or around 16% of the total revenue that the city currently collects.
"You talk about defunding the police, you would see it in action because we would have to lay off police officers,” Dimmitt said.
The mayor also says that layoffs would happen citywide, among all workers, that city projects would need to be delayed and that the city would have to start charging a real estate tax, if it lost the grocery revenue it collects.
While there may be valid reasons for concern, Coleman thinks they might be overblown. Families who save money because of the grocery tax elimination would likely put that money back into the economy, she says, with other sales taxes making up the shortfall.
“Those municipalities would be able to make that offset,” Coleman said.
For now, the legislation is under consideration and a long way from passage, so there's no guarantee the mayor's fears will come to fruition. However, if they do, families who benefit from the grocery savings will hopefully feel the promised relief — without facing the prospect of job cuts or new municipal taxes.
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