To the Editor:
Last week's Gazette reported on Supervisor Hyland's latest attempt to convince his Board of Supervisors’ colleagues to support his quest for a meals tax referendum. In his sales pitch, the supervisor states that such a tax would bring in $80 to $100 million in additional revenue. This made me wonder whether these figures were based upon static analysis or dynamic analysis. In other words, would gross revenues of restaurants stay the same despite the new tax or go down as a result of it? Of course, the push back will be: "Who would stop eating at restaurants if it costs just 4 percent more?" The answer is that this new tax would be on top of all the other taxes we pay. At some point, taxpayers will draw the line and stop voluntary activities that trigger additional taxes. Would this be the "tipping point?" I don't know.
Supervisor Hyland indicates he wants to specifically list, in the referendum, the county programs that would be funded by the meals tax. He also "vows" to "make an effort" to lower the real estate tax rate in subsequent budgets by the amount of money raised by the meals tax. Notice, the intention to reduce the real estate tax rate is not in the referendum.
A meals tax referendum is minimally acceptable only if the referendum binds the Board of Supervisors to lower the real estate tax rate to 100 percent compensate for the increased revenue resulting from the meals tax. This would achieve the goal of raising revenue from sources other than the real estate tax without increasing the average taxpayer's annual tax bill. This said, it is still not ideal, and in fact it is discriminatory, to target one industry for a tax increase. For that reason, I could not support Supervisor Hyland's proposal.
H. Jay Spiegel