Pink Tax: The Extra Cost for Being a Female

Introduction

A tax is a mandatory financial charge or another sort of levy placed on a person or legal entity, also known as a taxpayer, by a governmental organization to pay for government expenditure and other public expenditures at the regional, local, or federal levels.[i]

We are all aware of taxes; there are many different types of taxes, and the GST, is probably the most well-known one that everyone has heard of and has undoubtedly directly or indirectly paid at least once in their lifetime when purchasing goods or availing services.

While women and men are generally subject to the same tax laws, the creation and implementation of tax systems can have differing effects on women and men.

Do you comprehend what the title “Pink Tax” implies, though?

The additional fees applied to goods and services targeted toward women are known as the “Pink Tax.” It is also known as price discrimination based on gender. Over the course of their lifetimes, women pay hundreds of dollars in Pink Tax charges. Yes, being a woman has a price. When a female gives birth on the first day and must start paying for items that are designed specifically for girls, the Pink Tax becomes tangible.[ii]

Given the outdated belief that women prefer to shop and spend more money than men, it is an open fact that retail advertising frequently targets female consumers. The fact that items women purchase frequently cost more than identical or quite comparable “men’s” products may be a better-kept consumer sales secret than women receiving more specifically focused advertising.

To ensure that women know the product is specifically for them, manufacturers employ bright pink or purple packaging and sweet aromas like peony, vanilla, and even “fruity bubble in paradise” to thoroughly entrench female consumers in their gender-normative sales methods.[iii]

The Origins of the Pink Tax

The pink tax has been the subject of numerous opinions, but what do we truly know about it? How can we be sure that women spend more money on particular things than men do? Women have historically paid more than males for nearly equivalent services and goods, even though this trend may be less obvious today.

For some services, such as haircuts, dry cleaning, and even health insurance, gender-based pricing has long been standard practice.

Health insurers regularly charged women more monthly fees than men before the Affordable Care Act’s passage in 2010 and the prohibition of the practice. Given that women have higher health costs than men, particularly regarding reproduction, women should pay more for health insurance.

In 1991, Yale Law professor Ian Ayres discovered that vehicle dealerships routinely charged white men more for identical cars than they did for black or female customers.

Some towns and states have resisted what they see as unfair pricing practices. In California and New York City, for instance, gender-based service pricing is prohibited by law.

The 2016 legislative effort in California to update its statute to include a restriction on gender-based discrimination on products serves as evidence that lawmakers are finding it more challenging to regulate the pricing of commodities. The bill was finally dropped in response to complaints that it may pave the way for overzealous litigation. The New York State Assembly is now debating a bill of a similar nature.

At the federal level, initiatives to ban the pink tax have also been undertaken. Rep. Jackie Speier of California’s 14th district reintroduced the Pink Tax Repeal Act to Congress in April 2019 after introducing it in 2016 and 2018. The Gender Tax Repeal Act of 1995, a state law that outlawed service pricing based on gender, was introduced by Speier. Companies would not be allowed to charge women and men different prices for equivalent goods or services under the proposed federal legislation.[iv]

What does a woman pay more for?

An increase of 13% for personal care items
8% more for apparel for adults
7% more for accessories and toys
4% went for apparel for kids.
8% for products related to senior health.

When purchasing necessities like sanitary napkins, tampons, shampoo, soaps, and other such products, women pay 42% more than men do. For the identical things as males, women pay 37% more. In general, about 85% of purchases are made by women.[v] According to research by the New York City Department of Consumer Affairs, young girls cannot avoid the Pink Tax’s hazards since “female toys” cost, on average, 2 to 13 percent more than “boy toys,” which are identical save for the color.

You may be aware that a razor or shaving cream costs more than equivalent items for men, but what about clothing? Pants? How can you determine whether you are paying more for goods that are difficult to compare? It might be challenging to establish fair pricing without gender prejudice when retailers, brands, and product quality differ.

The most realistic product comparisons take into account goods from the same manufacturer that is of comparable quality; in these comparisons, gender bias is pervasive among many upscale clothing retailers.[vi] For instance, the average price of a pair of women’s jeans at a well-known retailer is $62.75 while the identical pair of men’s jeans cost $57.09, representing a 10% pricing difference for women.[vii]

Awareness in India

According to a survey, up to 67% of Indian citizens have never even heard of the pink tax. The fight against the 12–14% GST imposed on taboo feminine hygiene items like sanitary napkins and other products for women’s use in India initially brought this gendered pricing to the general public’s attention.[viii] Contraceptives, which are still exempt from taxes and are regarded as essential goods, were subject to a “tampon tax” because they were viewed as luxuries rather than necessities. Social media was flooded with demonstrations as a result.

The government subsequently repealed this “tampon tax” in 2018 after receiving more than 4,00,000 signatures on online petitions against it from activists, celebrities, politicians, and performers. The pink tax is still largely hidden in the marketplace and is accepted as an unquestioning social norm, even though the “tampon tax” movement in India helped raise some awareness about it. It has received some attention from numerous global social media initiatives, like #GenderPricing and #AxThePinkTax, but its impact is still relatively small.

Economic Burden of the Pink Tax

Women all around the world have long been subjected to the pink tax, which is particularly burdensome given that women continue to earn less than males. Women work more hours and earn less money, according to the International Labour Organization (ILO).[ix] With few women holding senior positions across all industries, the gender gap is already pervasive in the workplace. The international organization stated that the gender gap remains in all nations and that it has only slightly narrowed over the previous ten years.

Only five of the 146 nations studied for the World Economic Forum’s Global Gender Gap Report 2022[x] received scores better than 0.80 for wage equality for equivalent employment, according to the report, which was published this week. (Scoring 1.0 would indicate complete wage parity.) Additionally, 129 nations this year reported a decline in women’s labor force participation compared to men. The analysis concluded that one of the most significant reasons causing general gender-based wealth inequality is the gender pay gap.

The pink tax is being reduced through efforts. To ensure that women have full and equal participation in the economy, the UN has urged nations all around the world to take action to abolish the pink tax.

The price of products that women must buy but men do not, such as tampons, is another factor considered by researchers and decision-makers who analyze the pink tax.

Advocates for reducing or eliminating these levies have long struggled because they understand the burden that taxes on tampons and other feminine sanitary products place on women, especially those with lower incomes. Australia, Canada, India, Rwanda, and other countries have all abolished taxes on tampons and other feminine products.

How to fight the Pink Tax 

The pink tax’s impact on women may seem insignificant or nearly invisible daily. However, paying more over the course of a lifetime can have profound effects on women’s finances.

Women were estimated to have spent more than $1,300 extra year due to the pink tax in a 1994 report by the California Assembly Office of Research, which is still frequently quoted today. In 10 years, the same amount of money invested at a 5% return would have grown to about $16,000. It would total a staggering $160,000 in 40 years if a lady contributed that sum yearly to such a fund.[xi]

This sum of money is considerable, especially given the gender investing the difference, where women save less for retirement than men.

Bradford, a marketing professor, said that compounding and how it can affect retirement contributions or savings “make a huge impact in a woman’s life versus a man’s life.”

It’s crucial to be a savvy consumer and be aware of this pricing differential to resist the consequences of the pink tax.[xii] Consider purchasing products that don’t require two versions—one for men and one for women—such as shampoo, soap, and razors that are available in gender-neutral varieties. Use your voice if you find this pricing discrepancy in the wild as well. Offer gender-neutral pricing to show your support for companies that are against the pink tax.

As we work to advance toward creating an equal society, things like the Pink Tax and the Tampon Tax impede progress because they are gender biased. It is 2022, and the struggle to have a society without discrimination against men, women, and all other genders still exist. The price of products that women must buy but men do not, such as tampons is another factor considered by researchers and decision-makers who analyze the pink tax.

End Notes

[i] https://www.investopedia.com/terms/t/taxes.asp

[ii] https://www.listenmoneymatters.com/the-pink-tax/

[iii] https://www.bankrate.com/finance/credit-cards/pink-tax-how-women-pay-more/

[iv] https://www.rockethq.com/learn/personal-finances/the-pink-tax-what-is-it-and-how-can-i-avoid-it

[v] https://www.youthkiawaaz.com/2020/01/gender-tax-make-less-pay-more-is-this-justice/

[vi] https://hbr.org/2017/04/how-gender-bias-corrupts-performance-reviews-and-what-to-do-about-it

[vii] https://www.healthline.com/health/the-real-cost-of-pink-tax

[viii] https://theworld.org/stories/2017-08-31/indian-women-speak-out-about-government-tax-declares-certain-feminine-hygiene

[ix] https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_008091/lang–en/index.htm#:~:text=GENEVA%20(ILO%20News)%20%2D%20In,to%20one%2Dthird%20in%201990.

[x] https://www.weforum.org/reports/global-gender-gap-report-2022/digest/

[xi] https://www.businessinsider.com/personal-finance/pink-tax

[xii] https://www.thebalancemoney.com/what-is-the-pink-tax-5202741

This article has been contributed by Ishita Jaiswal, a student at Dr. D. Y. Patil, Pune.