Idea: Restaurant Tax
Editor's Note: On February 6, we asked BlueOregon readers to suggest progressive ideas that the next Oregon Legislature should enact. Over the next several weeks, we'll post some of these ideas here - and ask you to discuss them. Good idea? Bad idea? Any suggestions?
From LT:
A young man I knew who ran a food court in a retail space had a great tax reform idea. He was very big on healthy eating and believed a restaurant tax would be a great idea. "Hard to believe any of my customers would complain about 5 cents more for a hot dog, and if they are low income they should cook at home--more nutritious, less costly".
And from Garlynn:
Portland's school system is asking the City to bail them out and kick in some cash to help with their budget shortfall. How about the good ole' City of Portland following in progressive Ashland's footsteps, and instituting a restaurant tax citywide? This could flow to the general fund (no need to tie the hands of the City Council unnecessarily), but part of the deal could be that the city kicks in some permanent funding for the school system, and it uses this additional revenue to keep the permament school cash from having an impact on other city services.
Discuss.
[If you have your own original progressive idea to propose, do it here: "There oughta be a law."]
April 22, 2006
Posted in open discussion. |
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Apr 22, '06
The first suggestion shows just how out of touch with reality people like LT and the young man are. One of the major reason for the fast-food induced health crisis of this nation is that fast-food is actually relatively cheap compared to cook-at-home options for most folks. Particuarly when you factor in the lack of time working folks have as they put work 2 or 3 jobs and have to spend a lot of time in an older car that needs more gas tending to the needs of their family.
Now, if this ignorant anti-progressive elitist wanted to propose a progressive tax: Say a heavy point-of-sales "luxury tax" on gourment health-food restaurants, and trendy upscale "NW cuisine" places that are prone to spring up like weeds in Portland, coupled with a heavier corporate income on the major corporate chains, that would be a good idea.
Apr 22, '06
Hey, here's a novel idea! Why not SPEND LESS taxpayer money?
We all know revenue is still being wasted due to inefficiencies in contract management, employee salary and benefits and regular "conferences" in luxury resorts.
The taxpaying public cannot afford more hidden fees and taxes.
Stop trying to implement a Sales Tax through backdoor methods such as this proposed "restaurant tax".
Apr 22, '06
Would somebody please put forth a definition of "progressive" that is different from regressive taxes and regulation?
I'm getting a little fed up with the negativity ... that "progressive" really means "punish anyone who doesn't agree".
Oh no. I almost forgot. I live and spend money in Portland - I must have been exposed to the Sten-Blackmer virus.
Apr 22, '06
New Hampshire has no sales tax or income tax, but does have a prepared food and beverage tax. While I am not sure that it could pass in Oregon, it is able to raise a lot of money from non-residents who cross the border to get tax free products. I understand that residents have to pay it 365 days a year, but a limited tax suxh as this one is preferable to a broad based sales tax, and can implemented as a value added tax so that we can still pay the price on the menu.
Apr 22, '06
One of the major reason for the fast-food induced health crisis of this nation is that fast-food is actually relatively cheap compared to cook-at-home options for most folks
That is true if one lives in an area where there is not access to fresh produce. Someone did a news story once on the relative price of cheap but unhealthy food (fast food, frozen dinners, etc)compared to what was available in the fresh food sections of some markets.
But as I have seen discussed many places incl. here on Blue Oregon, there are communities where fresh produce is available for a reasonable price at least sometimes. If red or green peppers are available for less than a buck and they are chopped and put on top of a purchased pizza, for instance, that raises the nutrient quality of the meal. If someone has the time to buy the ingredients (canned beans, fresh hamburger, vegetables, salsa, spices etc.) and make chili and cornbread, there is control over the nutrients, the salt content (ever look at the nutrition label on a can of chili? if someone in your family was on a restricted sodium diet you'd be amazed at the sodium content of some prepared foods) etc. And the unit price for the chili (or for that matter tamale pie or similar dish) is much lower than buying it prepared. Sometimes it is possible to make a big batch and freeze some of it for later.
I am not speaking as a political activist here, but as someone with 2 relatives who earned degrees in Home Ec--one from OSU and one from San Jose State. Also as a person who learned to love baking bread (when I have the time) after being laid off.
If someone thinks we have adequate schools, state troopers, health care, etc. in this state, by all means tell us we need no more taxes. "Vote for me because we have adequate service levels and need no more new taxes" would be an honest campaign theme, and the voters could decide if they agree. "We must have spending discipline but don't ask for details" strikes me as either less than honest and/or intellectually lazy.
But it is time to end the "we must have spending discipline and no tax break can ever again be discussed" mentality. There is a school funding lawsuit based on Measure1--which did, by the way, get more votes than the prevailing side of Measure 30. There was an attempt to kill Measure 3 last session. There are people who don't like the vote on the Bears and Cougars measure. So don't try to convince us "the voters have spoken" if you only mean some measures and not others.
If one wants to say no measure ever passed can be discussed publicly at any time, they should say so. But that means no monkeying with the min. wage (like trying to pass tip credits) and of course that also means that if transferability was not in the wording of Measure 37 then tough luck--it can't be done during the process of implementing Measure 37 if the wording would have to be changed.
There is a new book out by Joe Klein about the corrosive effects of polling, focus groups, consultants.
Politics Lost : How American Democracy Was Trivialized By People Who Think You're Stupid
which was the subject of an interview this morning on NPR http://www.npr.org/templates/story/story.php?storyId=5357113
There are people who look for someone they admire, someone their neighbor/ friend knows, or someone other than the creatures of polls, focus groups, consultants. And last time I heard, people had the right to discuss politics with their friends without a consultant present.
In the interview there is a story about a man who told the leader of a Democratic focus group that the "mission statement" he'd been asked to comment on had too many "banana peel" words--slippery politician. That most voters can smell a packaged candidate's sound bites a mile away.
George Will said awhile back that " a political tactic works until it doesn't". All it would take is a few candidates to be genuine and still get elected (at any level) and the value of consultant driven focus groups and the Gospel according to polls would wither away.
But then I believe that people cast ballots as individuals, not as "the voters".
The only context where I think that term is valid is one based on results, not projections.
For instance: "When the Supreme Court threw out Measure 40 and enforced the single subject rule, Kevin Mannix got several pieces of it put on the ballot as individual measures by legislative referral. All the ads on both sides were either ' vote yes on all ' or ' vote no on all' . But the voters in their wisdom chose to split their votes, approving some and rejecting others. "
10:47 p.m.
Apr 22, '06
Fresh produce can be easy to find at a reasonable price sometimes. Right now the local farmers markets are all closed and won't open for some weeks still. So the only option right now is often times the grocery stores.
I went looking at fresh produce the other day and found much of to be expensive. Corn on the cobb as $1/each. Peppers were more than $1/each.
When a family with limited money is looking at a tv dinner for 88 cents (Banquet) or a pizza for 93 cents (Totinos), it's hard to convince them to buy one vegetable for $1.
11:12 p.m.
Apr 22, '06
Of course, a restaurant tax would neither tax the $1 corncobs nor the 93 cent frozen pizzas.
It would, however, tax the $2 Big Mac and the $48 steak at Morton's and everything in between.
11:38 p.m.
Apr 22, '06
Correct, it wouldn't tax those. But if it was a prepared food tax, as was suggested by someone above, it would tax the pizza and the frozen dinner. I was mainly posting in response to LT's item on buying fresh produce.
There are several reasons why poor people are more likely to get fast food than they are to cook. At lots of places you can get a nice burger with lettuce and tomatoes for $1. There are lots of items you can get for $1-2. For people who may not have a lot of food in the house, staples like spices, pots and pans, etc., it's a lot cheaper to buy fast food. With electric rates, it can also be cheaper to buy fast food. This is often times why in poor neighborhoods you'll see fast food restaurants-- they're within walking distance.
But I will say that I don't mind a tax on restaurant food that much, if kept low. If it extends out to all prepared foods (those bought in the grocery store), then you start having a problem. Maybe then a bit of the funds raised can be used to help low income folk purchase more fresh fruits, veggies, and meat.
Apr 23, '06
I have to agree with some of the comments here. Why is it that "progressive" is identified with raising taxes?
On the other hand, why is it that "conservative" is identified with lower taxes?
In my view this whole "raise taxes!" and "lower taxes!" thing misses the point. Sure, you can raise taxes or lower taxes, but so what?
I would like to advocate for a idea that often seems to get lost in the debate over taxes: Process Improvement.
Yes, good old traditional process improvment. Reduce defects. Reduce cycle time. Reduce cost. Develop performance metrics. Track progress on statistical process control charts. Eliminate cultural and bureaucratic barriers to improvement. And so on.
Of course, all of that doesn't happen overnight. People have to be trained. And it takes time to change the culture of an organization. It takes time to accomplish things. But it's not impossible, and the benefits can be great.
In other words, it really is possible to do things faster, better, and cheaper. It is possible to do more with less. That doesn't mean that you can just cut an agency's budget by 50 percent and say "now do everything you used to do but with half the resources." It does mean that through improvement projects maybe after two or three years the agency only needs 80 FTE rather than 100 FTE. It means that maybe the time to process an application goes from one month to two days. It means that maybe the supply budget can be reduced by 30 percent. It means that maybe the legal budget can be reduced by 30 percent.
How about this for a "progressive" idea: implement a long-term process improvement program in all public agencies. That wouldn't be easy to do. There would be many failures. There would be many obstacles. But eventually you would start to see the payback. But the alternative is the status quo, that nobody seems very happy with.
1:10 p.m.
Apr 23, '06
And of course however much "process improvement" occurs, the Right will still know for sure that we'd all be in clover if we could just root out that WASTEFRAUDANDABUSE.....and the Left will still know for sure that if just keep spending MORE, everything get better in the next budget cycle when we finally have MORE.
Randy and Eric and Al Gore and a bunch of other politicians all did concrete things to tighten up their respective gummint areas, but I've precious few compliments from the folks who are constant critics.
<hr/>We need more chest beating from the incumbents when they get this stuff right.
The critics aren't going to quit singing the single refrain that they know by heart..........
Apr 24, '06
There's a new book out titled Omnivore's Dilemma and the author presents the point that poor people need to get more calories for their buck. Unfortunately, that usually leads them to buy processed "unhealthy" food rather than spending time and going out to farmer's markets and buying fresh organic food. There are a lot more small grocery stores that carry processed food than New Seasons or Whole Foods or Wild Oats. It maybe more time-efficient for poor people to purchase food from these stores.
Here's an idea. Tax legalized drugs, ie. marijuana, etc. It was, after all, 4:20 recently. A totally untapped source of revenue (well except for alcohol and nicotine).
9:08 a.m.
Apr 24, '06
You could have waited two hours and thirteen minutes to post......
But hey, that's a sales tax I could get behind.
260 to 340 per oz. $100 per oz tax.
The Sandy Liquor Store could finally move out of that WWII quonset hut, and the suffering Oregon school children could finally get the $50,000 per annum necessary for a minimally decent education.
Of course the drug education curriculum would need to be adjusted away from Reefer Madness madness, and requiring honesty from educators and drug warriors might just be a spliff too far.
Apr 24, '06
Who would ultimately pay the tax?
Basic economics indicates that both consumers and producers would pay the tax. Although you think you're sticking it to the McDonald's and Mortons of the world, you're also sticking it to the Voodoo Doughnuts, Stumptown Coffees, and countless struggling local businesses. If you look at the rapid turnover in restaurant space in Portland, you'll quickly learn that many restauranteurs would be unable to shoulder an additional cost of doing business.
What does eating out have to do with schools?
LT may a ciruitous journey to make a connection, but I just don't see it. Many Portlanders treat The Beatles "Taxman" as a guidebook rather than a caution. Equity is best served when there is a connection between the tax being levied and the service being provided. That is why Leonard's "cells for schools" at LT's "salads for schools" makes no more sense that saying, "Hey, Portlanders like tatoos, you can get hep C from tatoos, hep C can kill kids, let's tax tatoos and use the money for schools."
Apr 24, '06
askquestions1st,
Based on personal experience, I doubt that fast food is cheaper than home cooking, especially if one prepares meals based on low cost staples that are better for us than most of what is served at chow huts.
And, although your concern for the time pressure on low income workers is heartwarming, I don't believe your analysis holds up. If one is paid little per hour, one is often better off using time in other pursuits. From an economic standpoint, it makes more sense for a high income person to let someone else prepare her meals, since her time is better spent making money. The low wage worker is better off working fewer hours and spending less on food.
If you'd like some recipes using brown rice, ground corn, dried legumes, and other nutritious low-cost ingredients, I'd be happy to forward some to you.
Apr 24, '06
To the extent that this food tax would be designed to make people healthier, I think it would be a mistake.
Each person has individual health issues. What works for one person does not necessarily work for the other. Just because 1 person's chronic habit of eating high-fat food may cause them problems does not mean another person cannot eat high-fat foods occasionally, or chronically for that matter.
Raising revenue is one thing, health care is another.
Apr 24, '06
"...The low wage worker is better off working fewer hours and spending less on food..."
Anyone remember that program a few years ago where certain elected officials (who were prattling about how the working poor needed to be more virtuous) were required for a month to live on the same money as the folks they were finger-wagging at ? Can you say "wake up call ?"
Time to expand that program, I think. Does Civiletti honestly think that it's easy to go to your boss at your (often multiple) low-wage jobs and request shorter hours so you can get home earlier to prepare more healthy food for yourself ? Yeah, right. And let's leave aside how kindly your utility corps., your landlord, and other recipients of your wages would take it if you told them "Oh, I can't pay you as much this month, now that I'm working shorter hours to rush home and cook nutritious foods instead of going to Burger Chew. You understand, I'm sure."
From an economic standpoint, it makes more sense for a high income person to let someone else prepare her meals, since her time is better spent making money. The low wage worker is better off working fewer hours and spending less on food.
Fascinating. The second person actually works for the first often enough-- long hours for minimal wages at an unfulfilling and sometimes dangerous job so that those Civiletti deems more valuable can feed their offspring quickly and cheaply after their own day's work.
There's so much wrong with this analysis at so many levels that words fail me. >:
Apr 24, '06
This is an interesting topic and one which I think tends to show class divisions more than people suspect. It is great to speak about cooking naturally and cheaply. But which of you can actually make a meal for your child that costs less than a McDonald's 99 cent cheeseburger? Don't forget to count the cost of the various herbs and spices and condiments that you purchased at Pastaworks or New Season's.
I am the kind of person that a restaurant tax should be aimed at - one who spends a lot of discretionary dollars at trendy spots entertaining my clients and friends, etc. Any tax that can catch me but avoid hurting the poor is the kind of tax we should be trying to adopt.
6:57 p.m.
Apr 24, '06
We're not talking about poor people spending an hour in a restaurant. We're talking about them grabbing fast food on the way to their second (or third) job, grabbing fast food on the way home so they can have a few extra minutes with their family (rather than an hour in the kitchen), etc.
I find it funny that someone would actually suggest those making low wages should actually just work less. These people are spending less on food already. Can you really beat feeding your kid for $1, plus them getting a small toy?
Can you really beat lunch or dinner for less than $1?
Those ingredients you talk about may be cheap, but it's hard to have the total cost at $1 or less. And I am talking about all costs-- the meat, veggies, condiments, spices, etc. Many people don't take that cost into consideration since they already have it in the house. But many poor people don't. And a frozen pizza or hamburger happy meal tastes a lot better than rice and chicken with no flavoring.
Apr 24, '06
If you've got a restaurant association in Oregon, like we do in Washington, they'll go nuts over this proposal and kill it quickly.
Apr 24, '06
Again, it's misguided to resist this tax simply because of some negative effects. If 90% of this tax will be paid by the middle to high income folks, then pass the tax. And pass a food tax credit to low income folks to fix that problem. Don't throw the baby out with the bath water. And don't go crying over spilt beer. And stop in the name of love, dammit!
People who eat at Genoa can afford to pay more. As can I. Every time I leave Oregon I am reminded of how foolish our tax system is.
1:48 a.m.
Apr 25, '06
BlueNote wrote.... I am the kind of person that a restaurant tax should be aimed at - one who spends a lot of discretionary dollars at trendy spots entertaining my clients and friends, etc. Any tax that can catch me but avoid hurting the poor is the kind of tax we should be trying to adopt.
A restaurant tax that exempts the first $5.
Might be unworkable - and I still don't think that adding 25 cents to the cost of a $5 Happy Meal is a bad thing.
2:04 a.m.
Apr 25, '06
An exemption on the first $5 will just make people break larger orders into multiple small orders-- one meal per order. Not only will this be a hassle for the restaurant, but it will mean an increase in their credit/debit card processing as well since most have a per transaction amount they pay.
As I said above, I don't have as big of a problem with a restaurant tax. I paid it for many years. It just needs to be a simple enough amount so that people can easily figure it out.
Waiters and waitresses may not be too happy, though, as it may decrease their tips in many instances.
I'd like to see any such tax put some money into a program to help low income people get fruits and veggies easily.
Where my family lives, they can go to this market twice a month and get fruits and veggies (it's income restricted). They come home with bags of fresh produce. They also have recipe cards and tips on how to use the items. Wish we had that here.
When we qualified, the only thing that was available was through WIC-- and you had to go to classes on cooking healthy meals before you could get the coupons. The classes filled quickly (they were small and not held often), so many people were left out. I tried for nearly a year to get into a class without luck.
Apr 25, '06
Heh, why don't we tax "air"?
Apr 25, '06
I just moved here from Minnesota where there is a sales tax except on groceries and clothing. Prepared food is taxed - meaning food from restaurants, not tv dinners or frozen pizzas as an earlier poster suggested. Those are still considered groceries, as are bread and other baked goods from a bakery for example (but not the sandwich you might buy at the bakery).
To address the potential economic impact that a sales tax would have on small business - restaurant turnover is high everywhere, sales tax or no sales tax. In the Twin Cities there are plenty of restaurants (and other small businesses) and people don't eat out less because of the sales tax. The Portland companies mentioned (Voodoo Doughnut and Stumptown) have loyal customer bases and I can't imagine that those people would suddenly change their behaviors because of a sales tax (especially behaviors that are connected to addictions to caffine and sugar).
Which brings me to my last point. When we're talking about fast food, we're talking about more than cheap food. We're talking about food that is highly addictive due to sugar content in the form of high fructose corn syrup and other corn products. Taxing fast food will not keep most people from buying it because it's likely they are already addicted. This is a public health issue that cannot only be addressed at the pocketbook of the consumer. I believe that a sales tax in Oregon is necessary and exempting groceries and maybe clothing is a good idea. But I don't think we should look to a tax to aliviate a much larger and systemic problem.
11:44 a.m.
Apr 25, '06
This discussion, and the previous one on a sales tax, shows why we are stuck with a dysfunctional tax system in this state.
The Republicans oppose any and all taxes. The Democrats are split between those who are trying to raise revenues in order to fund viable programs, and another set who oppose new taxes if they are not perfectly progressive. A conversation about a prepared food tax has degenerated in a conversation about the best diets. Wow.
I thought this was proposed as a way to raise revenue, not try to change people's behavior.
It's no wonder nothing gets done. Problem solving and compromise has apparently left both sides behind.
Hell, let's just argue about flouride and pumping our gas instead. We'll get about as far.
4:02 p.m.
Apr 25, '06
Hannah said:
Prepared food is taxed - meaning food from restaurants, not tv dinners or frozen pizzas as an earlier poster suggested.
Actually, that isn't the whole truth. It all depends on the wording of the state's law.
Unless stated elsewise, prepared foods usually means anything that has most or all of the preparation already done. Typically that means either you just heat it (as with items that are frozen) or they're ready to eat (roast chicken). It all depends on if the state's law says all prepared foods, or only those meant for immediate consumption.
In looking at several states, they didn't just use "prepared foods"-- they specifically outlined that it meant food that was to be consumed right away or that it was sold at a restaurant.
In Texas I had to pay sales tax on all prepared food at the grocery store. However, some changes were made in the spring of last year on which foods are/aren't taxed. Some of the items are still taxed, others aren't.
Westlund's bill, which is what many of us on here have discussed, does not say anything about what prepared food means. In this instance, it often means that frozen dinners, pizza, and the like are taxed.
SECTION 99. Food products. (1) There are exempted from the taxes imposed by the Sales and Use Tax Law the gross receipts from the sale of and the storage, use or other consumption in this state of food and food ingredients. (2) The exemption under this section does not apply to prepared food.
Apr 25, '06
Paul, I understand the frustration in wanting a new way to raise revenue. However, when the topic is presented as "Good idea? Bad idea? Any suggestions?" it doesn't seem right to criticize dissent.
The fact is, if the rationale behind the tax is not rock solid it will be gone after the next ballot measure. The idea of a restaurant tax as something smaller in scope than a sales tax may be putting too much pressure on that tax to "solve" our problems.
What percent of all consumption is spent on these foods? Invert that ratio and you see how much unnecessary political pressure you are putting on this idea. That pressure causes people to claim the tax has other benefits (such as health benefits, etc.) in order to sell the idea.
A good idea can still survive in this forum and get support from those reading closely. And maybe this IS the one. But unless we hear the best arguments for and against it, it won't stand a chance.
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