Although it is not a tax, the “pink tax” refers to a pricing structure favoring women’s goods and services. According to BALANCE, women pay around 13 percent more for personal care items like body wash, shampoo, lotions, and perfume than men. Even razors targeted at women were 9 percent more expensive. Pink is a common hue for packaging products for women , thus the term “pink tax.”
According to the U.S. Census Bureau, full-time American women earn 83 cents for every dollar earned by males. Women have been impacted by this discrepancy all of their lives, especially women of color, from the beginning of their professions until retirement. Women also earn less in Social Security and pensions due to lower lifetime incomes than males. This is compounded by the fact women are expected to pay much more for identical products during their lifetimes than males due to lower salaries and higher expenditures on personal care items.
As a result, women tend to make less money overall due to the gender wage gap, yet still pay more than their male counterparts for the same products due to the pink tax. The fact that women often live longer than males adds an even heavier weight to these statistics.
Indeed, the average lifespan for American women is 80.5 years compared to 75 years for men. As such, women are indeed being paid less and charged more. Additionally, they also routinely endure more significant levels of stress, anxiety, social inequity, and lower income than men. This creates massive problems for women, as they end up having fewer savings to pay off debt or build emergency savings.
Another compounding factor of this blatant inequity is that while men tend to accumulate more debt than women, their financial means allow them to take prompt action to pay off debt through debt consolidation or any other debt relief options. Yet, the same thing can’t be said about women who tend to have less savings and need to be more careful about their finances and tax.
The Pink Tax Repeal Act, which “prohibits the selling of equivalent products or services that are charged differently depending on gender,” was reintroduced by Rep. Jackie Speier in June 2021. Since reopening the dialogue, some states have started campaigns to eliminate discriminatory taxes. Twenty-four states have abolished the luxury tax on products used for period care. Gender-based pricing in services like dry cleaning and hair treatment is prohibited in New York City, Miami Dade County in Florida, and California. However, these states may charge higher fees if the service demands more significant time, effort, or expense.
How to avoid paying too much on pink tax
Although the pink tax and inflation won’t go away soon, women may still take action to avoid paying too much on certain products. After all, a penny saved is a penny earned. Here are a few ways to avoid the pink tax:
Purchase gender-neutral goods
Depending on how much you favor nicely curved pink razors or flowery-scented deodorants, as well as how much math you have the time and energy to do when shopping at CVS after work, this may be simpler in principle than in practice. Since men’s and women’s items sometimes come in different sizes, you can’t always just compare costs. Instead, you should calculate the prices per ounce if it is not already stated and compare these.
Consider purchasing products that don’t require two different versions—one for men and one for women—such as shampoos, soaps, and razors. There are also several unscented men’s or gender-neutral bath products available on the market if you don’t want to “smell like a guy.”
Even certain perfumed goods for guys might appeal to ladies. Similar items are subject to the “pink tax,” although occasionally, brand or variety has a more significant impact on price. Many female-focused online merchants also provide pink tax-free personal-care goods via subscription programs if you’d rather stay with feminine alternatives. You may reduce pink tax costs with this method.
Purchase garments that don’t require dry cleaning
Purchase clothing that can be machine-washed, hand-washed, and line-dried, such as no-iron blouses. Even in states like California or Washington, DC, where it is illegal to discriminate against customers based on gender at establishments like hair salons or dry cleaners, you will still be charged extra if you want your long hair trimmed or a nice shirt cleaned.
However, it certainly isn’t easy to find apparel that is initially less expensive, especially if you’re plus-size. There is also limited recourse you have to stop certain shops from charging more for women’s clothing than men’s, other than to protest when you notice it happening.
Purchase reusable menstrual supplies
One of the most sinister aspects of the “pink tax” is that it forces women to purchase goods that men don’t need at higher prices, such as sanitary supplies for instance. While shops or manufacturers cannot legally be held responsible for this disparity, there certainly is a push out there to level the playing field in this regard. Indeed, there is a campaign to make menstruation products free for women, as well as a movement to outlaw sales taxes on tampons as they discriminate against women.
In the meantime, you may save money by utilizing reusable products like the Diva Cup, sea sponge tampons, reusable pads, or Thinx period underwear. In addition to being more environmentally friendly than single-use items, some of these goods could also be healthier to use.
Reduce your use of pricey makeup
This is likely something you already do if you feel at ease doing it. It’s also another example of how gender standards cost women more than males.
Complain against discrimination
Speak up if you see a particular manufacturer or merchant attempting to impose absurd gender pricing on unaware customers! Make a call to the corporate office or the manager. Post a review of the company on social media, contact the consumer protection office in your area, and inform your friends.
In practice, it could be more challenging to outlaw gender-based pricing for goods than services since so many variables are at play, such as packaging and marketing variations, that are acceptable justifications for corporations to charge more. Yet, businesses may change or modify some of their practices if customers cease purchasing particular goods or protest.
Develop greater discernment
It also helps being informed about price discrepancies, and going above and above to locate the most significant goods for the money, regardless of packaging. Speaking up if they notice unfair pricing is another alternative. A powerful way to voice dissatisfaction is to complain on social media, in consumer groups, to local lawmakers, and to the business as well. Consumer behavior can provide manufacturers with valuable information.
When shopping, check if there is a pricing difference between the women’s and men’s versions. If there is, check if the quantity and composition are similar. Take a photo of both goods and include the hashtag #AxThePinkTax if they are identical.
Conclusion
It’s important to remember that the pink tax is just one example of how women can be unfairly disadvantaged in the marketplace. By being aware of these issues and addressing them, we can work towards a more equitable society for everyone. It’s high time women set concrete financial goals and work on them.
Author Bio: Attorney Loretta Kilday has more than 36 years of litigation and transactional experience, specializing in business, collection, and family law. She frequently writes on various financial and legal matters. She is a graduate of DePaul University with a Juris Doctor degree and a spokesperson for Debt Consolidation Care (DebtCC) online debt relief forum. Please connect with her on LinkedIn for further information.
PS: Please note this post contains affiliate links.
The New Year is prime time to set goals, including our financial goals. While many tend to think about general life and career goals, few really devise an approach to tackle their finances in the new year. Hence why many find themselves repeating the same negative cycles of financial loss year after year…
As working women and moms, setting appropriate and achievable financial goals is all the more important as many of us tend to manage the finances in our homes. This is without mentioning the many single working women and moms who are sole earners in their households. Furthermore, as moms, we’re often partly or entirely responsible for the financial education of our children, hence compelling us to have a solid financial vision for the future.
I know in my own experience, it has taken me quite some time to get in the habit of setting strong financial goals every year. Despite my business background and growing up in a single-parent household where money had to be carefully managed, setting financial goals didn’t always come to mind. It is with time, experience, and through conversations with fellow women that I actually started paying more attention to the importance of financial objectives in our lives and careers.
If you’re thinking of setting financial goals in the New Year, here are three I would like to suggest to your attention:
Develop a more positive money mindset
As women often socialized to aspire to less in terms of remuneration (hello wage gap!) and money in general, we may be inclined to think of finances and money in a negative way. As a matter of fact, many may develop a scarcity mindset when it comes to money, not feeling like we deserve to be paid fairly in the workplace, or that we should not aspire to reaching higher levels in terms of position and compensation. When we add to it suffering from imposter syndrome as working women, having a positive money mindset can become a daunting prospect. Many women also suffer from being raised in families and environments where money was not discussed, let alone with the women in the family.
All these factors, and so many others, speak to the importance of mindset when it comes to setting financial goals. Developing a positive money mindset rooted in abundance instead of scarcity is the first step to achieving any desired level of financial success.
Yet, how do we go from a negative, or lukewarm money mindset at best, to a positive one? It’s a change that requires re-training our minds to think differently. One of my favorite tools to re-train my money mindset is through financial education, mostly financial books geared at women, such as “Women and Money” by Suze Orman or “Get good with money” by Tiffany Aliche.
Understand and own your money
The second financial goal that I’d like to propose is that of understanding and owning your own money. Too often, we have no, or very little of an idea, of the ins and outs of our own money. As busy working women and mothers, we can be so caught up in our daily commitments and duties that our own money slips through the cracks. This can translate into financial debt, loss, overuse of credit and overall disastrous consequences for ourselves and our families.
This is where setting a goal to better understand, own and manage our money can make a world of difference. This means committing to a consistent practice of taking inventory of our money, being aware of and accountable for our expenses, and setting up a reasonable budget that fits our personality and lifestyle. Personal finance software such as Quicken, Mint,YNAB, or TurboTax for taxes, can help in the process.
Plan to create generational wealth
Last but not least, the third financial goal I’d like to propose may sound like a lofty one, but is one most of us should think about when it comes to our finances. As working women and moms raising the next generation, impacting our communities and creating a legacy, our finances can serve as a powerful tool to create change and make a lasting difference. This is why it is so important to have a long-term financial view that includes planning to create generational wealth.
Generational wealth is wealth that can be passed on to future generations. Contrary to popular opinion, it is not something only reserved to the rich families and communities of this world. It is actually possible to build, starting with each and everyone of us. It can be done through investing in children’s education, in the stock market as well as in real estate. It also can be achieved by creating a business, and taking advantage of the benefits of life insurance. However, all this requires setting solid financial goals and having a clear plan.
Overall, setting financial goals is an important part of starting a new phase or season of life such as the New Year. Among these, developing a strong money mindset, understanding and owning your money and planning to create generational wealth are three of the most important goals we can set as working women and moms.
What financial goals are you setting this year?
With Gratitude,
The Corporate Sis.
PS: Please note some of the links are affiliate links.
When times get a little, or a lot tougher economically, we often start thinking about our finances first. As working women and mothers, many of whom are the primary breadwinner in charge of the finances of our house, or on the other end of the financial spectrum, suffer from not being involved enough in the household’s finances, knowing how to manage our finances and budget during challenging economic times is crucial. Not only does the welfare of our families depend on it, but our own ability to thrive and not just survive is also linked to how well we can maintain and grow ourselves financially.
As an immigrant coming to school in the United States, I had to learn very early on to budget in an effective and often even creative manner. Knowing how to stretch a dollar was a necessity as I grew up into adulthood. Growing up in a one-parent household in SenegaI, I watched my mother budget in an efficient way so as to keep food on the table, clothes on our backs and even private school tuition paid. That’s where the foundation of my financial knowledge started, and continued into my educational background as an accountant and Certified Public Accountant (CPA).
So how do you budget effectively when tough times happen? Here are a few principles I’ve learned and kept on using to adequately handle my finances during challenging economic times:
Don’t wait for tough times to budget for tough times
Budgeting for difficult economic times happens before the challenges even arise. This means getting in the constant and consistent habit of budgeting. One budgeting rule that I often follow is it 50/30/20 rule. According to this popular rule, we are to spend 50% of our income on essentials, 20% on savings including investments, and 30% on everything else. While there are variations of this rule depending on each individual’s situation, the main principle here is to develop a consistent habit of giving your money a place to go, and enforcing the discipline to save resources over time.
Categorize your money
I once heard from someone that money that doesn’t have a name is money unloved. In other words, if you don’t assign your money a qualifier and a job, you have more chances of losing it. In a culture where we’re so used to instant gratification, where we can purchase anything at the click of a button, it’s never been easier to lose track of your spending and hence your money. This is why it is so important to categorize your money as soon as it lands in your bank account.
I like to assign my money at home as soon as I receive it. By home, I mean specific accounts destined for given purposes. While some bank accounts are for general spending or savings purposes, others are for longer-term purposes, creating an investment or dream vacation fund, for instance. I have found the practice of assigning my money a home and labeling my accounts as specifically as possible, allows me to avoid over-spending while increasing savings, especially in tough economic times.
Shift your mindset.
Many of the challenges we face during tough economic times are not just related to money but also, and most importantly, to our money mindset. For many of us, managing our money during tough economic times turns out to be a painful exercise, because we haven’t made up our minds around our finances. Making a conscious decision to save money, or to reach a certain financial goal, is highly dependent upon our mindsets. The good thing about mindsets, thankfully, is they can be changed.
Throughout the many challenging economic periods of my life, I have taught myself to think about money not as a scarce, but an abundant resource. This has allowed me to feel less powerless in the face of rough economic times, and to keep working at bettering my money habits and mindset.
Another mindset shift that has been really important in my experience has been too learn to distinguish oh between my wants, needs and dreams. By order of impact, I have made it a habit to prioritize essential needs and dreams, and be especially vigilant around wants. Very often, our wants are punctual and not really reflective of what truly matters or has the longest-term impact. Compare wanting a $1,000 brand name purse to a lifelong dream of starting a business, taking a dream vacation, or retiring our spouse or parents early, for instance. Funding our dreams almost always ends up providing a greater return and satisfaction in the long run.
All in all, tough economic times are an excellent opportunity to train ourselves to manage our money more effectively. As a matter of fact, managing our money in difficult times should not be all that much different from managing our money at any time. The same principles apply, albeit with some level of variation, depending on our personal circumstances and environments. As such, learning to budget before tough times arise, assigning our money at home, and changing on money mindsets are the three most essential tools to effectively budget our money when crisis hits.
Now let me ask you, what are the tips and tools do you recommend to manage your money and budget effectively during top economic?
Question: My husband and I have been enjoying earning more over the years in our careers. However, our tax bill has also been going up. What can we do to avoid paying so much in taxes?
Signed, Overtaxed Mama
Hi Overtaxed Mama,
I so hear you! As we grow into our careers, so do our incomes over time. If we add to this being in relationships and counting our partners’ income jointly, chances are our earnings can grow even more as the years pass. However, with our incomes, also grows another less fun side-effect, that is the taxes we end up owing on our tax returns. After all, doesn’t the popular saying confirm only two things are certain, death and taxes?
As you may have watched your earnings grow, you may also have watched your tax bill get larger as you file taxes. Since you’re taxed on your raising income, it’s hard to avoid. However, there are ways to offset the tax increase that comes with earnings growth. I’ve grouped these in 3 categories, that you may remember under the mnemonic RED:
R is for the Retirement savings you should maximize:
One of the most effective ways to reduce your taxable income is to increase your retirement savings. You can do this by maximizing your contributions to your 401k employer-sponsored plan, up to $20,500 in 2022. Individuals 50 and olderSince these contributions are made before before tax, they directly reduce your income.
You can also contribute to an Individual Retirement Account (IRA), up to $6,000 annually ($7,000 for 50 and older).
Another way to reduce your taxable income is to use flexible spending plans, offered by some employers. One of these is the Flexible Spending account (FSA), in which employees can contribute and set aside funds up to $2,850 in 2022 for medical expenses.
Similar to the FSA, the Health Savings account (HSA) is dedicated to employees with high-deductible health insurance plans, whose pre-tax contributions go toward healthcare costs.
Lastly, yet another way to bring your taxable income down is to deduct business-related expenses such as the home office deduction for instance. Other available business deductions include health insurance costs, as well as other deductible expenses.
These are all effective ways to reduce your taxable income, especially as it increases over time. Consider using one or a combination of these to lower your tax burden.
Ask a CPA is our periodic column addressing accounting and financial questions for working women and moms. Got an accounting or financial-related question? Please email us at corporate@thecorporatesister.com
Q: I often feel defeated and disempowered in my personal finances, as if I were trapped. How can I be more empowered and create more freedom in my finances?
A: Great question! And you’re definitely not the only one to wonder about creating more freedom in your finances. Increased financial freedom not only allows you more peace of mind, it also helps you have a better quality of life, and create a solid financial legacy for yourself and your family. Not having to worry about your finances, and instead working to build wealth can be a rewarding experience in and of itself. For working women and moms, many of whom are disadvantaged when it comes to wealth-building and financial freedom, this can also mean increased time, opportunities and better work-life balance.
Here are 3 tips that may help:
Have a vision for your finances
Having a vision for your finances is the first step to wiring your mindset towards having more ownership and freedom in your finances. What does your ideal financial situation look like? How much money would you like to see in your savings account? How would you restructure your expenses?
However, it’s not enough to just have a vision for your finances. Writing down your financial vision is a powerful way to solidify it into a concrete plan and turn it into reality. It can be as simple as journaling about it, creating a basic budget, and/or setting up milestones to reach.
Set up a system
Creating freedom in your finances also involves setting up an effective system allowing you to focus on your main financial goals. This is especially important for us as working women and moms carrying so many responsibilities and commitments.
An effective system can start as simply as reminders, a monthly budget, or a financial app. It can also take the form of automating your monthly expense payments, hiring a financial advisor, or and/or devising an elaborate financial strategy for yourself and loved ones.
Learn through the process
Last but not least, gaining more freedom in your finances largely comes from educating yourself. Learning about the many options at your disposal to make the best out of your money puts you at a distinct advantage. Whether you choose to take classes, read books or learn on social media, the goal is to be knowledgeable about the best options for you.
Using dedicated resources like Certified Public Accountants, or financial advisors can also further your education in a more direct way. Working with a financial professional can not only help you solidify your finances, but also help you grow through the process.
Overall, creating more freedom in your financial situation is far from being a luxury. In a world threatened by economic instability, having a vision for your finances, setting up an adequate system, and learning through the process are effective ways to be freer when it comes to your financial situation.
As you file your taxes every year, have you ever wondered if there is an element of gender bias embedded in the tax policy? As a Certified Public Accountant and a working woman and mom, I’ve often asked myself the question. And if you have, then you definitely are on to something.
While tax policy can certainly contribute to increased gender equality, which translated into significant economic dividends, the reality is, in many countries, it’s actually doing the very opposite, thus fueling the gender tax bias. When it comes to gender tax bias, there exists a distinction between explicit and implicit bias. Explicit gender tax bias occurs when there is a legal link between tax code provisions and gender. Implicit gender tax bias, on the other hand, happens when existing gender inequalities cause tax policy outcomes have different implications for women and men. Even when gender tax biases are not overtly explicit, implicit bias remains embedded in factors such as earned income, property ownership, consumption choices, wealth, along with differences in gendered societal expectations.
According to the Organization for Economic Co-operation and Development (OECD) first cross-country analysis of 43 G20 countries’ approaches to tax policy in the report entitled “Tax Policy and Gender Equality: A Stocktake of Country Approaches”, gender tax bias is not ignored by governments. As a matter of fact, gender equality appears to be an important factor in the design of tax policy in most countries, with half of these having already passed tax reforms in favor of increased gender equity. Despite these efforts, a high risk of implicit tax bias was noted in most countries. In order to remedy this situation, more detailed gender-differentiated data is necessary. Unfortunately, much of this data is only available and accessible around income and labor participation, and more scarce around property ownership, wealth and consumption choices. As such, this scarcity of available data makes it more challenging to resolve these issues.
Watch this short YouTube video on the Gender Tax Bias:
One example of the gender tax bias, especially in our COVID-19 times, targets part-time workers, which are largely women. According to the OECD’s “Taxation of Part-Time Work in the OECD” working paper, women are more likely to hold part-time positions than men, at a rate of almost three to one. Along with this, there has been a decrease in the earnings level of part-time workers relative to full-time workers, as well as variations between part-time and full-time workers’ taxation attributable to said differences in earnings levels.
Another more implicit example has to do with the availability of deductions for unreimbursed work expenses incurred by men, more so than those incurred by women, including childcare and transportation costs for instance. Another example yet is embedded in consumption taxes such as the Value-added tax (VAT) in many developing countries, which end up raising the cost of services such as household services, thus disincentivizing women from working outside the home. Lastly, an unfair bias also exists in corporate tax incentives that do not favor sectors such as hospitality, the garment industry, micro-entrepreneurship, where women predominate. While these constitute a few instances of the gender tax bias, here are many more examples across countries and economies.
Overall, the onus is on governments, but also us all, to consider and implement measures in which tax policies and practices better promote gender equality. These measures could and should reduce both explicit and implicit gender tax bias, while supporting, prioritizing and giving tax access to women and households impacted by the COVID-19 crisis.
In the world of entrepreneurship, funding is a vital source of growth. However, for many, if not most female entrepreneurs, it’s also a major obstacle. As a matter of fact, one third of the world’s female entrepreneurs face gender bias when attempting to raise capital for their businesses, according to HSBC Private Banking’s research. Women face the most gender bias in the UK, the United States and Singapore. Further research shows female-led ventures are at a greater disadvantage when raising funds for businesses in male-dominated fields as opposed to female-dominated ones.
As the COVID-19 pandemic has resulted in a large number of businesses created by women entrepreneurs, it has also predominantly negatively affected the latter. Faced with the scarcity of funding opportunities for women entrepreneurs, several lenders and corporations are lending a hand to help reduce disadvantages experienced by women entrepreneurs. As such, these organizations are offering help and support to female entrepreneurs by making these 15 small business grants available:
This business grant program through Visa is dedicated to Black women-owned businesses. In order to qualify for this grant, applicants must be Black women business owners for at least two years, be a business-to-consumer company, and reach a minimum revenue of $24,000. Specific location restrictions also apply.
This grant is directed at female entrepreneurs planning to start a local small business. To apply for this grant, all that is required is for the applicant to explain their business’ purpose. One women-owned business is selected each month to receive a $10,000 grant. In addition, one of the monthly winners is then selected at the end of the year to receive a $25,000 grant.
Through this initiative, FedEx engages the public to vote for the business of their choice. Candidates who receive the most vote win a $75,000 grant. To sweeten the pot, the winner also benefits from free exposure through FedEx’s media outlets.
This grant allows prospective women-owned businesses to be eligible for a federal government grant for research and development needs. In order to qualify, female-led businesses must employ fewer than 500 employees. Eligible businesses can receive over $750,000 if the research produces positive outcomes.
Speaking of research and development needs, the Small Business Innovation Research grant applies to female-owned businesses boasting cutting-edge ideas. Eligible companies can earn a $150,000 grant, and can receive up to $1 million in the span of two years
For any women-owned businesses whose mission is focused on furthering the cause of women and girls, grants are made available from the Ms Foundation for Women. Examples of businesses who have benefited from these grants include businesses advocating for affordable childcare, against domestic violence, and for reproductive health, to cite a few examples.
The Cartier Women’s Initiative Award is bestowed upon 21 female entrepreneurs each year by Cartier. As a prize, winners get one-on-one expert coaching, media coverage, as well as business workshops, in addition to other rewards ranging from $30,000 to $100,000.
These 7 business grants for women entrepreneurs, among others, are a good start to begin the process of helping women-owned businesses overcome the barriers in their way.
