Taxation Creep: The Eternal Restaurant Tax

I stumbled on a Salt Lake Tribune article entitled “Utah restaurant tax provides steady cash for county projects, but is it fair?“.  The article includes some choice quotes that demonstrate the problem with authorizing “limited” and “temporary” taxes (especially for special projects – like RAP taxes).

Once imposed, the whole “temporary” promise is quickly forgotten.  Then, once that temporary pledge is set aside, and the initial project is under way or finished, the money becomes a politician’s pet project playground:

Created 20 years ago to help pay to build convention space and enhance Utah’s appeal as a tourist destination, the restaurant tax has grown in reach, how much it raises and what it funds. Now collected in 27 of Utah’s 29 counties, the surcharge generates cash for an astonishing array of cultural sites, recreational programs, civic and arts groups, parks and open space, community events, fairgrounds and big-ticket construction projects.

Of course, there are also the hidden costs that are never explained when approval is sought.  The Restaurant and/or “tourism taxes” are always spun as being paid by someone else; a traveller.  The reality is:

“Eighty-eight to 90 percent of people in restaurants are locals — folks with a Utah driver’s license,’’ Gruber said. “We are taxing ourselves, and we are doing it in a very unfair way by concentrating on a single industry.’’

Basically we’ve fooled ourselves (and forced our neighbors) into paying more for products to fund local politicians’ proverbial Playland.

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