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Wednesday, July 15, 2015

Low Income Families in This State Pay the Most After Tax Hikes

Low income grocery shopper

Raising taxes is very common across state governments. It's one way they gain more money to help balance their budgets. Most people get that. What they don't get is how it affects low-income families. The state of Kansas recently increased the state sales tax so much, it threatens to send shoppers across the state line.

Kansas drastically increases sales tax

When Kansas voted to raise their sales tax from 6.150 to 6.50 percent, low-income families immediately began to worry. So did local merchants. The increase may not seem so much by other families, but it's enough to send low-income families out of state to do their shopping. This means crossing the state line into Missouri, where the state sales tax rate is currently 4.225 percent.

What families gain by shopping across state line

What do low income families gain by crossing the state line? Due to Missouri's much lower sales tax rate of 4.225 percent, a family spending $200 a week on groceries could save up to $500 a year by shopping in Missouri.

Tax increase affects everyone

The tax increase affects low-income families and the merchants who serve them. Merchants feel helpless because they must comply with the law. Also feeling helpless are low-income families who don't live near the border and cannot travel that far to shop in another state. They are stuck. Once again, the poor will have to adjust and make difficult choices on where they will need to make yet another cut. Is it in healthcare? Less nutritious food? Moving to poorer neighborhoods? None of the choices are good.

So, while the state government may feel good that they are able to help fill their $400 million budget gap, no one else is feeling very good about this move.

Read more at www.kshb.com/news/state/kansas/low-income-families-in-kansas-may-have-to-pay-the-most-after-tax-hikes
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