Re: This tax makes so much sense
Posted by:
Not this again...
()
Date: October 23, 2016 01:00PM
Bill.N. Wrote:
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> If you run the numbers you are not "paying a
> little". A harried parent who brings home carry
> out four times a week at $20 per meal will end up
> paying as much tax as if the County raised the
> real estate tax on her $500,000 home by three
> cents.
Let's review. The Board got a little more than $90 million in added revenue last year from a 4-cent increase in the basic residential real estate rate. Those taxes are 100% paid by County residents on a once-a-month basis via either rent or mortgage payments. The meals tax would result in about $100 million in added revenue next year. It would be paid only as one chose to dine out at eateries in Fairfax County. Places such as Vienna, Herndon, Falls Church City, Fairfax City, Manassas, Manassas Park, Alexandria City, Arlington, and the District already have meals taxes in place, so nothing would change with respect to dining out in any of those jurisdictions.
The meals tax would of course apply not just to County residents, but also to tourists, business travelers, and some 350,000 daily commuters into the County, all of whom dine at our many local restaurants. Expectations would be that about a third of total meals tax revenue -- more than $30 million -- would be paid by those outsiders rather than by actual County residents. Among County residents, the folks most seriously affected would be those wealthy enough to dine out often and at our more upscale venues. Briefly put, if you are a County resident and cannot yet count yourself among the wealthy population, you will be better off if the meals tax passes. If it doesn't pass, look for the Board to come back with a 6-8 cent increase in the basic residential real estate tax rate next year. The need for additional revenue isn't going to go away no matter the ballot outcome. The only question is over how should pay for it. Should it be just us, or should it be us plus the outsiders instead?
> What you meant to say is "MEALS TAX, PAY A LOT A LITTLE AT A TIME".
How something is paid out can actually make a very big difference. In 2008, Bush-43 tried to do a stimulus program by sending checks for $300 to each taxpayer. That was windfall money and too many people simply put the funds into savings or used them to pay down debt. No stimulus. What little effect they did have on demand was played out in a matter of a few months.
In 2009, Obama created in ARRA the Make Work Pay tax credits. Those were phased out for those making more than $75K per year, and more importantly, they were paid out as a few dollars more in each paycheck over the course of the year. The amounts that people had their hands on at any given time were insignificant, so the dollars simply blended into regular monthly spending patterns, meaning that virtually all of them were a boost to demand and had the hoped-for stimulus effect.
Conversely, paying an extra 16 cents for a Big Mac is a low-impact, pocket-change non-matter for virtually everyone. If instead you are out celebrating an anniversary or whatever and are worried that the meals tax applied at the end of the evening is somehow going to break you, be a big boy and skip dessert or order the chicken instead of the filet.