Detroit Ponders Fast Food Tax

It was bound to happen sooner or later. Since a CDC report last spring indicated 400,000 people die annually from weight-related causes, fast food has been portrayed as a villain. Even though the study’s methods have been called into serious question since publication, fast food is quickly catching up with smoking and drunk driving as America’s favorite things to hate. So it should come as no surprise that someone has decided to try to tax it.

Mayor Kwame Kilpatrick of Detroit, Michigan hopes his already heavily taxed citizenry will agree to hand over a few more cents for their hamburgers, fries, drinks and anything else available at a fast-food restaurant, to help the city overcome a $300 million budget deficit. Taxpayers in Detroit are being asked to approve a two percent fast-food tax on top of an existing six percent state sales tax on restaurant meals.

On the surface, the idea seems to make sense. The purpose of taxes are to regulate or restrict certain types of business practices, products or services as well as to raise money for the local, state or federal government. Taxing fast food seems like a good idea based on this definition. It is popular, so it would certainly raise money for the government taxing it. And, questionable methods aside, few would argue that it is something that should be eaten in moderation.

Critics, however, say a fast food tax would be an unfair burden on the poor, seniors and young people who are the primary consumers of fast food. The restaurant industry also feels that it is being unfairly penalized for a providing a popular product.

According to the Associated Press (AP) and the National Restaurant Association, the Detroit tax, if approved, would be the first in the nation to target fast-food outlets.

You may like these other stories...

Federal judge tosses IRS lawsuitsBernie Becker of The Hill reported that a federal judge sided with the IRS on Thursday, tossing out two lawsuits filed against the tax agency over its improper scrutiny of Tea Party groups...
Amidst the dark clouds hovering over the IRS this year—ranging from the lingering Tea Party scandal to other improprieties to damaging budget cuts—at least there's a ray of sunshine in a new report from the...
SEC, Big Four Chinese affiliates make progress in talks over audit documentsMichael Rapoport of the Wall Street Journal reported that the US Securities and Exchange Commission (SEC) and the Chinese affiliates of the Big Four...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.