The followng is a letter sent to our Legislators explaining our concerns in increasing the Regressive Meals Tax.

2009

Honorable...
State House
Room....
Boston,MA 02133

Dear

   The proposed increase in Massachusetts Meals Tax would have a devastating effect on many in the food industry. Hardest hit would be the small independent and “mom & pop” operations. The Meals Tax should remain at the same % as the State Sales Tax. We feel Governor Duval Patrick is in his heart trying improve the quality of life of all citizens. He is however, misguided on imposing this additional regressive tax on citizens of the commonwealth. To single out one industry with a regressive tax, hitting hardest those on fixed incomes and the working poor, is unfair to all of Massachusetts citizens. We have operated a bakery & cafe in Easton for the past 25 years and the proposed additional tax would have a devastating effect on our business. The following are reasons we feel it should not be implemented.
   Cost of goods sold: Our cost of goods sold for this past year has increased the greatest of any year we have been in business. On top of this we also experience a large increase in the cost for utilities.
   Progressive Taxation: Massachusetts has always been very progressive in realizing a sales or meals tax on items sold to its citizens are regressive taxes and hurts those with less buying power the greatest. It is that progressive heritage, and social and ethical obligation to place less demands on our most vulnerable citizens that makes Massachusetts stand out. Adding an additional tax on food, a human biological need goes against that very Massachusetts progressive culture.
   False: Tax would not decrease eating out: It is a poor argument to say that paying extra dollar or two on a $50.00 meal would not discourage one from going out. We wish those who do that everyday all the best. They should not be lumped together with those on limited fixed incomes or people working that spending just $10.00 on a meal is beyond there means.
   Eating out is NOT a luxury: With todays employment demands, eating at least some meals is not a luxury but is a necessity.
   Drop in the total check amount per customer: The customer is ordering less per visit. Choosing a half sandwich or skipping the purchase of soup.
   Eating out, fewer times per week: Staff has mention that some customers have apologized for not coming to lunch as often. They want us to know it is not they are going somewhere else but are worried financially and are cutting back.
   Surrounding states have higher tax: By using this argument, one could make the case Massachusetts should match New Hampshire’s sales tax.
    The adverse psychological effect of an increase tax on the economy: President Obama has stated part of the reason for the deepening recession is psychological. People are cutting back even if they have secure jobs. An increase in meals tax, would only exasberate the psychological adverse effect on the Massachusetts economy.
   Logistics of separate meals and sales depending on community: Will the tax be paid where the food establishment is located or at the place of consumption? Will a caterer pay tax to community the event takes place or place of business? Will a food establishment that delivers be required to keep track or each order and the community to which it is delivered? Does not past the KISS test for a small business.
   Tax needed to cover the Billions taken as Bonus Money: Bonuses taken or given to executives connected to failed financial institutions after they received much of the initial bailout money.

   We realize the financial crisis of both the state and the nation. We do not think the state should implement a regressive tax to try to solve the problem. A progressive solution has to be found for a progressive state. Relying or increasing the tax on the least who can afford it is not progressive. These are real people struggling to exist with a growing anger. We have not seen as much discontent with the actions and lack of actions by our government since the 60’s.

   Our customers are not happy with the amount of money we are required to give to bail out the large financial institutions because they are to big to fail. The additional meals tax to cover the failure to properly regulate the financial markets or to cover the cost of billions of dollars in bailout money that was given to or taken by executives as “bonus money” who were responsible for the financial crisis goes beyond rational reason.

   Solutions... a tax on true luxury items, making the state income tax progressive, temporary surcharge on income tax until a progressive tax can be implemented with rebate to those families and people with less income. It sounds like the soon to be “former” dog tracks could have slot machine to help those losing their jobs. The owners seem to have a good history of being good stewards of the gambling industry which should be taken in consideration if gambling is to be allowed. One could give the towns the option of a number of slot machines as well. This would be greener as people would not have to travel as far. It might instill more political support for the tracks having slots. It would also have competition involved and not create an industry that has corporations that are too large to let fail as we have seen in the financial industry. It would be completely voluntary for a citizen to choose to gamble verses taxing a biological requirement for life. Taxing a portion of the meals that colleges and universities sell at those institutions. These institutions are exempt from property taxes but still require services from the local municipality and the state. One could give an exemption to those who are a Massachusetts residences. I realize the great benefits of having so many great institutions and that it would be an added burden, but it is also a burden to add an additional tax for those on fixed incomes that are residents as well. Adding an additional tax to meals is not the way to solve the problem.

   I appreciate taking the time to read our concerns about the proposed increase in the meals tax. I know you are concerned and attempting find and provide money needed to provide services for our citizens. I hope this gives you a better understanding and feeling of the real financial and emotional pain our business and industry are experiencing and take it into account in making your decision. I know the the legislature, the governor, the town and city officials are all trying to find a way of getting through these trouble times with the least amount of impact. I hope we can find a solution that will be more broad based vs targeting a single industry already hard hit. Any new tax should be progressive, that goes in line with the state’s progressive heritage.