Talking Points

1. A new sales tax on food and beverages sold in restaurants would be a regressive tax that hits families, low-income residents and the elderly the hardest. It has accurately been called a "Family Meals Tax."
   
    

2. Family Meals Taxes are not fair! Nobody likes to be the subject of discrimination but that is exactly how restaurants feel when you impose a tax on what they sell but do not tax what the business next door sells. We believe it is discrimination. If a local community needs more tax revenue for general operating or capitol expenses it should be a more general tax that is paid by all businesses or all residents at the lowest rate possible.
    

3. Family Meals Taxes are often rationalized as a tax on non-residents or a luxury tax. In fact, residents pay most of a new tax. Eating out is no longer a luxury for most families. Eating food prepared outside the home has become a necessity for most people.
    

4. Family Meals Taxes are a tax on food. When the sales tax was passed it was decided that necessities such as food, shelter and medicine would be exempt. Most food purchased in a grocery store is still exempt. Why is it that when some communities need more revenue they turn first to a new tax on food? Restaurant taxes are extremely regressive because they tax a basic necessity of life that everyone, regardless of income, must find some way to include in their budget.  Click here to learn more about why meals taxes are regressive.
    

5. No matter how you rationalize it, a new 1% tax is a price increase. When you increase price you decrease demand. That is a law of economics that can’t be repealed by any legislature.
    

6. Most Family Meals Taxes do nothing to bring in new restaurant customers through tourist or visitor promotion. Taxes that single out a business or an industry for special taxation should be spent in ways that benefit that industry in order to offset the economic burden imposed. Most are really just tax increases.
    

7. Every dollar you take from customers is a dollar that customers no longer have to spend on food. 
    

8. Family Meals Taxes are not user fees. A user fee pays for some special cost associated with the business being taxed. Proposals for new meals taxes are just tax increases.
    

9. The restaurant industry is the largest private sector employer in the United States but their profit margins are some of the smallest. Local communities already benefit from the property, sales, excise and income taxes paid by restaurants and their employees. Why would any public official want to place another economic burden on this important industry?
    

10. Family Meals Taxes are also rationalized as being affordable. A 1% tax may sound small but to a business with a profit margin of 5% or less it is substantial. If restaurants could raise their prices by 1% without losing customers they would probably already have done so.
     

11. A 1% Family Meals Taxes is really a 7% tax because it is on top of the general sales tax. The combined tax for a family of four would be over $300 per year.
     

12. Local governments say they need more flexibility to raise revenue. That may be so, but shouldn’t the means be fair to everyone or does the end justify the means?