WBJ Talk Back, Feb. 2, 2009 | Online reader comments from Jan. 19 through Jan. 29, 2009
An article we ran in the WBJ Daily Report about Gov. Deval Patrick's proposal to increase meals taxes spurred two, polar opposite responses:
“Restaurants do not warrant an increase in meals taxes. They have seen a drop in business to begin with, and further, they contribute revenue through payroll and their supply chain of raw materials.”
- Donald Lundstrom.
"This tax increase represents a 20% increase in the state sales tax on meals. But if the restaurant did not change the menu price of the meal, it would raise the price of the meal to the consumer by about 0.94% (e.g., the diner would go from paying $10.60 for a $10 meal to paying $10.70 for the same meal).
The state has to be concerned with the price elasticity of demand for restaurant meals. If this price increase of less than 1% causes meal consumption to decline by more than that (i.e., demand is elastic), the state will actually collect less taxes than before -- as it would for any product. So the state assumes that demand for restaurant meals over the affected range of prices is actually relatively inelastic, and consumption won't fall that much, if at all, due to this large percentage increase in the tax rate (but not the meal price). That should result in a large percentage of tax revenue generated from sales tax on meals.
An automobile takes a much larger share of one,s budget, for most citizens, than restaurant meals due. For this, and other, reasons, elasticty of demand is greater for cars than for retaurant meals. Increasing car prices by increasing the sales tax will result in less of an increase in tax revenue (and maybe even a decrease) -- at leaast in percentage terms -- than will raising taxes on products like liquor, cigarettes, and restaurant meals, where the demand is more inelastic.
In that sense, it is perfectly fair to increase taxes on restaurant meals and not, say, automobiles, if the states goal is to increase tax revenues. Of course, "fairness' is not a simple, one-dimensional construct, so this tax action may be unfair in other ways"
- Jay Lacke
“Sick employees should stay home out of respect for their fellow colleagues. No one in the office wants to catch what you have.”
- Sharon Arnold on a report from OfficeTeam that found 45 percent of workers go to the office when they are sick.
"This is something that is being overlooked by too many people everyday. Even in this economy we are cutting back on our luxuries while people in some of these countries are dying because the rice crop was bad, or because they don't have the skills to get out of the poverty trap. Two thirds of the world live on less than $2 a day. (www.govspot.com/know/poverty.htm)
Please keep publishing these stories, I got this in an email link, and honestly this is the first one I ever commented on."
- John Dutton on a story by the WBJ on the Worcester-based Seven Hills Foundation’s effort to provide aid in Africa.
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