Umph, news of a budget shortfall hitting the City is no news to those of us in the trenches. I originally posted this response on The Eleventy Billionth Blog's post about cities that are reconsidering smoking bans due to declining tax revenues. I hope Bethany doesn't mind, but it could bear re-posting given the city's dire straits.
Economics of Restaurant Taxes 101
Let's say a couple go to a restaurant, order a nice steak, cocktails and bottle of wine, total bill $200 (liquor sales of $100), with sales taxes it comes to $208.25 (no sales tax on poured alcohol).
The city/state/DART/whatever takes in a total of $22.25 from the 14% gross receipts taxes on alcohol and the sales taxes on food.
Same meal, cooked at home: the food, well there is no sales tax on unprepared food, so sales taxes = $0. The cocktails and wine, purchased retail sells for $40, and packaged alcohol is charged the normal sales tax rate of 8.25%.
The city/state/DART/whatever takes in a total of $3.30.
Not to mention, that you don't have to do the shopping, cook the meal, serve the meal or clean up. IJS.
Sunday, February 15, 2009
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