Luxury taxes and ghetto taxes

*Disclaimer* Ghetto taxes are not applied by the government. It’s not an actual tax, but I found it super interesting and relevant.

Luxury taxes are taxes on goods that aren’t necessities like expensive clothing and high-end cars. This tax is usually higher than the original sales tax. Of course, this is reasonable because a private jet isn’t an essential item.

On the other hand, there is the ghetto tax. Last semester in my global public health issues class, we learned about something called the ghetto tax. This “tax” is the increased prices of essential goods used in poor neighborhoods. It is like a convenience fee. This is usually on groceries and clothing but also on things like insurance and home mortgages. no-one-can-afford-to-be-poor In this article, they find home insurance is about $300 more in poor neighborhoods and car insurance. They find that the poor spend $50 to $1000 more on car insurance. Some of the examples given in the article really add up and can set these people back.

9 Replies to “Luxury taxes and ghetto taxes”

  1. This was very insightful. When I saw the title and read your opening it reminded me of another “tax” that isn’t actually a tax. The “Walmart Tax” has a similar effect. In the article “The Walmart Tax Every American Taxpayer Pays” it stated that Becuase of Walmart’s poor working conditions and pay it forces most of their work force to utilize government aid programs just to survive, which costs Americans about $1 million per Walmart every year.

  2. I found your post to be very interesting. I have heard similar things about how the poor don’t have access to the same offers that the rich and middle class do, so they end up paying more money for fewer quantities and lower quality. Also, thank you for putting that article in. it really helped further understand what “ghetto tax” is.

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