Repeal meals tax, restaurant owner asks; ‘We lost over 20% of our customers, cut payroll, got rent relief’

As you consider the County’s budget, I request that you repeal the 4% Meals Tax on restaurant food.  The following are my reasons.

The tax is unfair and unhealthy.  Restaurants prepare fresh food daily; grocery stores sell the same food in frozen, refrigerated, and dehydrated forms.  Restaurants like mine start with unadulterated raw ingredients; grocery foods, by necessity, contain chemical preservatives and stabilizers.  Cooks who live and pay taxes in the County prepare restaurant food; factory workers in faraway locations manufacture grocery food.

These comparisons hold true for almost all items on restaurant menus; examples are pork barbecue, macaroni and cheese, pizza, enchiladas, chili, soups, bread, pies, etc.

Yet, your 1% sales tax on grocery food and now a 10% tax on restaurant food equates to your taxing restaurant customers 10 times more for their food.  You are penalizing restaurant owners, employees, and landlords in this county while incentivizing residents to consume foods laden with chemical preservatives and stabilizers. This is unfair and unhealthy.

The Meals Tax is bad economics.

It is well established that as prices rise, demand falls.  Prior to imposing the Meals Tax, inflation had already pushed restaurant prices on average up 9%.  At this level, the fall off in demand was still manageable.  When your Meals Tax raised prices by another 4%, you exceeded the breaking point and demand dropped precipitously.  In our case, we immediately lost over 20% of our customers.  We were forced to respond by reducing our payroll by 33% and obtaining rent relief.

All county restaurants and their employees were hurt, some more than others.

I have heard stated a justification for the tax: “If you can’t afford a 4% tax, then you can’t afford to eat out.”  They are right.  That is exactly what happened.  A dangerously significant number of people stopped going to the sounty’s restaurants.

The Meals Tax is unpopular.

If you had submitted the tax to a referendum as was required in the past, I hypothesize that it would have failed decidedly, just as it had failed in the past.  In your defense, you may have been unaware of the consequences when you imposed the tax.  You may still have your reasons for maintaining it.  If you decide to retain it, you will have ample opportunities to present your arguments to the voters in your upcoming election.

Your opponents, to whom I and other restaurant owners in the emerging coalition have spoken, have already stated their opposition to the tax.  The debates will be interesting to watch. In any case, the Meals Tax issue will not be swept away and ignored by voters.  I can assure you of that.

I appreciate your consideration and will watch with interest your decision.

Nelson H. Head
Dixie Bones Inc.