We believe Family Meals Taxes are regressive. Why?

Every dollar you take from customers is a dollar that they no longer have to spend on food.

Supporters of Family Meals Taxes often believe they are a luxury. When taxes on restaurant meals were originally levied, it was essentially because they were thought of as non-essential or discretionary spending. But that's just not the case anymore. To illustrate this point, we can look at 2004 Consumer Expenditure Survey data - click here. The actual data can be found at the BLS web site at the following link: http://www.bls.gov/cex/2003/Standard/income.pdf

First off, it is correct to say that average household expenditures on food away from home increases as household income increases. However, as you can see from the attached table, the percentage of household income that food away from home represents increases as household income decreases. For households with incomes in the $5,000 to $9,999 range, average household expenditures on food away from home represent 9.1% of household income. For households with incomes of $70,000 or more, it's only 3.6% of household income.

Arguments that only look at the total spent are really looking at the data incorrectly. Sure, the higher income households will pay out more dollars in meal taxes. But as a proportion of their total income, the lower income households pay more. Look at the total spending on food (which includes grocery stores and restaurants). The same comparison by income level was 30.8% for low income households versus 7.6% for the high income households. And you can be certain that this is exactly the same argument that people would use against imposing taxes on grocery store food. The same argument should hold for restaurant food, because it has become an essential part of the busy lifestyle of today's families. It's regressive. It doesn't get any more obvious than this.

In addition, we have done some consumer research on the essentiality of restaurants. These figures are from our National Restaurant Association 2006 Restaurant Industry Forecast. 

• More than one-third of all adults (34%) say purchasing takeout is essential to the way they live. This doesn't vary much by income levels. (2006 NRA Restaurant Industry Forecast) 

• Nearly one-half of all adults (43%) say restaurants are essential to their lifestyle. (2006 NRA Restaurant Industry Forecast)