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Can you afford the ghetto tax?
By Jeremy | July 28, 2006
HT: Jordon.A new study from the Brookings Institute documents the "ghetto tax," or higher cost of living in low-income urban neighborhoods. It comes at you from every direction, from food prices to auto insurance. A few examples from this study, by Matt Fellowes, that covered 12 American cities:
- Poor people are less likely to have bank accounts, which can be expensive for those with low balances, and so they tend to cash their pay checks at check-cashing businesses, which in the cities surveyed, charged $5 to $50 for a $500 check.
- Nationwide, low-income car buyers, defined as people earning less than $30,000 a year, pay two percentage points more for a car loan than more affluent buyers.
- Low-income drivers pay more for car insurance. In New York, Baltimore and Hartford, they pay an average $400 more a year to insure the exact same car and driver risk than wealthier drivers.
- Poorer people pay an average of one percentage point more in mortgage interest.
- They are more likely to buy their furniture and appliances through pricey rent-to-own businesses. In Wisconsin, the study reports, a $200 rent-to-own TV set can cost $700 with the interest included.
- They are less likely to have access to large supermarkets and hence to rely on the far more expensive, and lower quality offerings, of small grocery and convenience stores.
Topics: economics, policy, poverty, taxes, urban | 2 Comments »
July 29th, 2006 at 1:00 am
This is good info. Can you send me the link or entire report?
July 30th, 2006 at 4:50 am
As Good As Steve Jobs?…
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