Another proposal to raise the tax on food

Representative Craig Frank has a blog post with a big headline:

Repeal of 1% Restaurant Tax Receives Unanimous Approval

Repealing a tax should be popular right about now. Especially since Senator Howard Stephenson and others are proposing to raise the sales tax on food.

Unfortunately, repealing this tax isn’t as pretty as it sounds. The proposal is, in fact, to shift a one percent restaurant tax to a one-tenth of one percent general sales tax.

Rep Frank says:

Although the Bill proposal removes the 1% sales tax on restaurant food, the Bill also gives Counties throughout the state an option of levying a 1/10 % (one-tenth of one percent) general sales tax in its place. Many counties have used the current restaurant tax’s revenue stream to bond for projects such as convention centers and other “cultural” venues.

Rep. Frank has stated that “it’s not (his) intent to put at risk those Counties who have already leveraged themselves against the previously ‘guaranteed’ revenue stream, but to take the tax from a less logical collection point and place it in a tax base that makes more sense.”

Let me repeat that last phrase: “take the tax from a less logical collection point and place it in a tax base that makes more sense:

Stated more plainly, we’ll abolish a tax on prepared food enjoyed by those who can afford to dine out, and replace it with a tax on unprepared food that is a basic necessity of life.

This shift may be revenue neutral, as Rep. Frank claims, but the burden will be shifted from those who have expendable income enough to enjoy eating out, and will be born disproportionately by the poor and working poor of the state who will be required to pay a greater percentage of their income to fund those convention centers and other ‘cultural’ venues.

In the comments Rep Frank says this proposal has nothing to do with Sen. Stephenson’s proposal to raise sales taxes on food. He is only partially right in that. While theoe may be two separate proposals, they both end up hurting the people most who already find their grocery-buying dollar stretched to the limit.

This proposal by Frank is nothing more than bowing to the restaurant industry. Restaurants benefit from those convention centers and cultural events. If a tax is needed to fund those things, then a restaurant tax seems far more appropriate than a grocery store tax.

This bill should never have made it out of committee and it must surely be defeated when brought to a vote.

Cross-posted at OneUtah


One Response

  1. I’ve been interested in taxes for longer then I care to admit, both on the individual side (all my working lifetime!!) and from a legal viewpoint since passing the bar and following tax law. I’ve put up a lot of advice and rectified a lot of wrongs, and I must say that what you’ve posted makes complete sense. Please persist in the good work – the more people know the better they’ll be outfitted to comprehend with the tax man, and that’s what it’s all about.

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