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Study Documents ‘Ghetto Tax’ Being Paid by the Urban Poor
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| Contributor | RP |
| Last Edited | RP Jul 19, 2006 01:50pm |
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| Category | Study |
| Media | Newspaper - New York Times |
| News Date | Wednesday, July 19, 2006 07:00:00 PM UTC0:0 |
| Description | Drivers from low-income neighborhoods of New York, Hartford and Baltimore, insuring identical cars and with the same driving records as those from middle-class neighborhoods, paid $400 more on average for a year’s insurance.
The poor are also the main customers for appliances and furniture at “rent to own” stores, where payments are stretched out at very high interest rates; in Wisconsin, a $200 television can end up costing $700.
Those were just two examples among several cited in a report Tuesday showing that poor urban residents frequently pay hundreds if not thousands of dollars a year in extra costs for everyday necessities. The study said some of the disparities were due to real differences in the cost of doing business in poor areas, some to predatory financial practices and some to consumer ignorance.
The study, from the Brookings Institution, said finding ways to eliminate these added costs, often called a “ghetto tax,” could be an important new front in the fight against poverty. |
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