Thinking about taxes
If only everyone who was worried about "taxing the poor" would work to get rid of the remaining 2% tax on grocery store food items.
A 1% tax on restaurant meals will add a nickel to the price of a Whopper value meal. Even if you have one for lunch every day, that's a quarter a week. Meanwhile, if you spend only a hundred bucks a week on food at the grocery store (real easy to do these days) that's an extra two dollars a week you're forking over in taxes. Eight times as much.
Let's face it. The tax on restaurant meals isn't aimed at "the poor." Those on the left and right who claim to oppose it for that reason need to stop being dishonest about their opposition.
A 1% tax on restaurant meals will add a nickel to the price of a Whopper value meal. Even if you have one for lunch every day, that's a quarter a week. Meanwhile, if you spend only a hundred bucks a week on food at the grocery store (real easy to do these days) that's an extra two dollars a week you're forking over in taxes. Eight times as much.
Let's face it. The tax on restaurant meals isn't aimed at "the poor." Those on the left and right who claim to oppose it for that reason need to stop being dishonest about their opposition.
Labels: taxes
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8 Comments:
I have every confidence that Paul Luebke actually really does believe that it's a tax on the poor, and that's why he's opposing it. I also think his fetish with sales taxes is the far and away his worst trait as a legislator.
By
Unknown, at 12:24 PM
Getting rid of the 2% sales tax on groceries is a great idea. The question is - who is authorized to do it? I believe the 2% is a local option sales tax. Could the Board of County Commissioners vote to lift it, or do they have to have permission from Raleigh?
I guess the best solution - and the one most likely to pass with the voters - would be to pair the restaurant tax and elimination of the grocery tax together as a swap.
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Todd, at 3:31 PM
i believe you are correct. to my knowledge all 100 of NC's counties have this local option enacted.
btw - Luebke was not the person i had in mind when i wrote the post. Sales taxes are regressive to the extent that they tax necessities and luxuries the same. It doesn't have to be that way.
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Barry, at 4:02 PM
I've been writing about dropping the local sales tax on groceries for years.
The county and city could make up the lost revenue with a modest increase in the property tax rate. Low income,middle class households and small business owners would have a net gain--meaning more money in their pockets.
High end homeowners would break even or pay a bit more. Those people and corporations that have benefitted from Bush's "pamper the rich" tax breaks and deregulation and have lots of property would ending paying more.
If Durham does get to vote on the meals tax, all folks who value fair taxation could hold out for elmination of the local sales tax on groceries as a condition of support.
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Frank Hyman, at 4:35 PM
I'll provide my own 2 rants (instead of 2 cents).
First, I was confused as hell when I recently noticed that Whole Foods charged me 6.75% sales tax for some store-bought bread! It wasn't a huge to-do, but the customer service manager had to explain to me that already-baked bread was (against logic) treated like a convenience food and thus subject to the higher "prepared food" tax.
Second, I appreciate Barry's comment that the tax on restaurant meals isn't aimed at the poor, but I would respectfully argue otherwise. A Vin Rouge diner isn't exactly poor, I'd guess. For "restaurant meals," though, let's focus on the predominant fast food. That greasy-hamburgers-and-crap subset of restaurant meals actually IS a cheaper way to feed a hungry family than the alternative of purchasing raw ingredients (vegetables, fruits, grains)...and having time & energy after 2 jobs to turn those ingredients into something appealing. A Fayetteville newspaper journalist documented an exercise with 2 ways to spend a week's grocery money to illustrate this, perhaps a year ago.
I have considered the misplaced cost of fast food to be a huge health problem for the U.S. However, since learning even more about how corporations are greedily controlling who pays the costs of fast food (and how), I consider fast food a huge societal problem--not just to U.S. health but to worldwide health, the global economy and the environment.
What I mean is, I can't blame people for eating crap at Hardee's; it's cheaper than healthier ingredients at Food Lion. Restaurant tax IS aimed at the poor, I believe. Something bigger needs to be fixed, IMHO.
--Lisa S.
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--Lisa S., at 9:25 PM
Lisa,
Here's how I don't get the regressiveness of a meals tax. A dinner at Hardee's is about $5/person for someone getting a standard value meal with a reasonably large sandwich. A dinner at Vin Rouge can easily go to $35/person, with salad, a meat entree, one drink, and tip.
Now, are those eating at Vin Rouge REALLY making 7x what those eating at Hardee's are? If we guess that the individual income of a Hardee's diner is $20k/year (a very low assumption, I'd say), that means that the Vin Rouge diner is making $140k/year. If the ratio is any less, then the tax is, in the amount collected per meal, progressive. Since I'd wager that closer numbers are $25k/year for your average Hardee's diner and $50k a year for your average Vin Rouge diner, if I'm right, it's quite evidently an extremely progressive tax, per meal.
Next question is how often people eat out versus how often they cook. I don't know how it would shake out, but I don't think you can make the case that lower income people actually eat out substantially more often than higher income people. I'm guessing there's either no effect, or higher income people eat out more.
I just can't work out any way in my head that the prepared foods tax is actually regressive, or even that it's not rather strongly progressive. I don't have any hard numbers to prove this -- at the very least, you'd need to quantify both dining out habits and amount spent when out, or just amount spent dining out per month, broken down across a range of income levels. The thing is, those insisting it's regressive don't show these either, and from what I've seen, they aren't even bothering to approach it with the rather meager level of quantitative analysis I did in this comment.
If Luebke (and his opposition has been far and away the greatest obstacle to getting this through) is so damned convinced it's regressive, let him show at least some logical justification for it. Otherwise, he's just being a stubborn ass.
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Unknown, at 1:22 PM
I can't wait til we start figuring out how to pay for a light rail system.
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Barry, at 1:39 PM
Re: "A Fayetteville newspaper journalist documented an exercise with 2 ways to spend a week's grocery money to illustrate this, perhaps a year ago."
Cite, please. I really find it hard to believe that the time and money involved in going out to eat (including gas prices now) make fast food cheaper than preparing simple meals at home.
By
Steve Jones, at 3:57 PM
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