(2/2/07) Realistically, I think a meals tax would be fine.
We can dither about people opting to save a few pennies or dollars by dining in a town that rejected the local option tax, but I doubt that would have significant impact. As with any change, there would be a transition period, but that would probably normalize before long. Soon enough, we would forget any controversy and simply appreciate the new revenue stream. That's probably how it would go.
Yet I oppose the concept on principle.
As a community, we need more money to help us pay for the things that we collectively want, need and value.
But rather than be willing to pay for that ourselves with higher property taxes, we want a meals tax. We want people in the restaurant industry to bear the risk, and people who patronize restaurants to bear the cost, of paying for what the whole community wants. If the community perceives the need, shouldn't the community take responsibility for it?
A meals tax creates a disincentive to dining out. It might be small, but it is real and no business sector wants a disincentive slapped on it. Dining out is discretionary spending for consumers. To tax their restaurant dollar differently than their movie, concert or book dollar is to make going to a restaurant incrementally less attractive than spending that discretionary dollar in some other way.
If you just look at it from the consumer's perspective, you could say, “Fine – if you don't like the tax, don't eat at restaurants.” And that would be a reasonable response for an aggrieved consumer.
But what about the restaurants? The consumer's discretionary spending is the restaurant's necessary income. The restaurant is forced to bear the risk of how consumers react to the disincentive, and the restaurant is put at a disadvantage relative to other attractive spending options.
That is fundamentally unfair.
Why put the burden of our revenue shortfall on the restaurant sector? Why not put it on the psychotherapy sector? Or the karate lesson sector? Or the web journalism sector? More to the point, why would we think it's OK to make any subset of us responsible for financing the needs, wants and desires of the whole community? If we want it, we should be willing to pay for it. Anything else is illogical and unfair.
And yet if we fail to support increasing our property taxes, I would probably vote for a meals tax if it makes it to the ballot. Because it probably would ultimately work out just fine, and we do need the money.
But it is not the responsible option.
-- Stephanie O'Keeffe
Comments
About 15 years ago the state actually extended the 5% sales tax to “services” including health club memberships, attorney fees and yes, I believe even psychotherapy sector. And how did that make us feel?
The hue and cry was so great that the state quickly rescinded it. But I still had to collect it for about two weeks. And I could see folks flinch when I charged them $104 for what they thought we be a $99 membership.
People say incremental pricing does not influence them and that they round up in their heads an automobile priced at $9,999 or a leather sofa at $999. I’m sure they think they do (consciously) but they really do not (subconsciously).
A higher meals tax would have greater impact on a higher-end restaurant like Judie’s because her prices are a tad higher than The Pub or Delano’s (and worth every penny of courses).
Also about 15 years ago the town decided to raise more money on the backs of bar owners by increasing the price of alcohol permits, figuring they were making a killing off the students. As a Select board candidate at the time I warned that the bars were not necessarily doing that well and some of the more marginal operations may just call it quits.
At the time Amherst pretty much rolled up the streets in the Summer so the bars revenues when schools were in session were dramatically different (as in down) during June, July and August.
As predicted, a couple operations did not renew so the overall revenues to the town on alcohol permits that year actually decreased.
Don’t mess with the goose that lays golden eggs.
Posted by: Larry Kelley | February 3, 2007 10:24 AM
I have really grown tired of the unrebutted whining about taxation that has gone on for the past quarter century, made respectable by the Great Communicator Ronald Reagan. I too flinch about sales taxes, but I can't remember ever turning and walking away from a purchase of goods or services because of it. 5% added to Mr. Kelley's reasonable fees, for example, would not scare me away from his business, where I am a satisfied customer.
The question comes down to this, after one has done all the scrutiny about government spending one can do, do you want to pay for the government services you expect at the level of quality you expect or not? We have gotten into a bad habit of thinking that we can get something for nothing in this society, exemplified in so many respects by the prominent role in our lives of state-run lotteries.
The admonition to "don't mess with the goose that lays the golden eggs" is one that applies to all taxation, not just those levied on Larry's club.
(Let me head off the predictable ad hominem attack from Mr. Kelley immediately: I am a government employee as well as a taxpayer. If readers think that completely undermines my argument, so be it.)
Rich Morse
Posted by: Richard Morse | February 4, 2007 12:24 PM
Me? Ad hominem attacks? I believe in your recent letter in the Bulletin you stated you were neither “nice” nor "polite". So you obviously don't need me for vitriolic rhetoric.
(Let me head off the predictable counter attack from Mr. Morse immediately: Yes, this is a case of the pot calling the Kettle black)
Posted by: Larry Kelley | February 5, 2007 06:16 AM