Dining solo at a downtown food-court, I found myself sans reading material. This is always a predicament for me, as I hate to have nothing better to do during my meal than stare at fellow patrons. It tends to come across as creepy. So, after reading every last syllable on my bag of Garden of Eatin’® Sea-Salt Pita Chips (Hmmm, made in Boulder, Colorado), my attention moved to my already wrinkled receipt: 1 falafel pita (a tad dry, but not without its charms), the aforementioned chips and a medium soft-drink, Sub-Total $6.94, Sales Tax $.72, Total Due $7.66. Now, my mathematics abilities will never be confused with 17th century genius Gottfried Leibniz, but a quick set of calculations on my cell phone told me the sales tax I just paid for my lunch was a staggering 10.37463977%.
Unfortunately, like most Chicago residents, I’m already conditioned to the high sales tax rate in the city. I’m also painfully aware of the busload of new tax increases proposed by the Cook County Board and City of Chicago. What I did not know was that sales taxes in some parts of the city have already crossed that magic/tragic 10% barrier. In addition to the 9% rate imposed by the city, county and state, the city of Chicago imposes an additional .25% sales tax on restaurants. So, where does the extra 1% tax come from? I’ve found reference to a special tax assessed on dining establishments located in the downtown business and entertainment districts, though finding independent confirmation has proved about as fruitful as waiting for Godot. Whatever the source, the intended target of this levy is likely the favorite of tax assessors everywhere: The Tourist.
Whether here on business or pleasure, the logic has always been to place as much of the tax burden as possible on visitors rather than local residents. That is why taxes on hotel rooms and rental cars are always significantly higher than others. But creating a tax based on a restaurant’s location may be taking things a bit too far, and may have largely missed its mark, unfairly affecting many Chicagoans.
Not that many years ago, the Loop was a ghost-town after dark. Now, the Loop and nearby areas have developed into genuine neighborhoods, complete with 24/7 residents. These residents will take the additional hit every time they eat out near their homes. Add to that the thousands who converge on the city-center each morning, many of whom work in retail or service sector jobs, which pay at or near minimum wage. (The average retail employee in Chicago earns $9.43/hr.) Perhaps taxing the Happy Meals the family from Wichita buys at Navy Pier makes sense. But what about lunch for the cashier working at the kiosk down the way? Non-rhetorically, is there a point where the tax-bite would deter you from eating out?
(The boundaries of the downtown restaurant surcharge remain murky. As a dedicated correspondent and someone who eats almost every day, I will make every attempt to dine my way to the answer. I’m helping the economy, right?)
Unfortunately, like most Chicago residents, I’m already conditioned to the high sales tax rate in the city. I’m also painfully aware of the busload of new tax increases proposed by the Cook County Board and City of Chicago. What I did not know was that sales taxes in some parts of the city have already crossed that magic/tragic 10% barrier. In addition to the 9% rate imposed by the city, county and state, the city of Chicago imposes an additional .25% sales tax on restaurants. So, where does the extra 1% tax come from? I’ve found reference to a special tax assessed on dining establishments located in the downtown business and entertainment districts, though finding independent confirmation has proved about as fruitful as waiting for Godot. Whatever the source, the intended target of this levy is likely the favorite of tax assessors everywhere: The Tourist.
Whether here on business or pleasure, the logic has always been to place as much of the tax burden as possible on visitors rather than local residents. That is why taxes on hotel rooms and rental cars are always significantly higher than others. But creating a tax based on a restaurant’s location may be taking things a bit too far, and may have largely missed its mark, unfairly affecting many Chicagoans.
Not that many years ago, the Loop was a ghost-town after dark. Now, the Loop and nearby areas have developed into genuine neighborhoods, complete with 24/7 residents. These residents will take the additional hit every time they eat out near their homes. Add to that the thousands who converge on the city-center each morning, many of whom work in retail or service sector jobs, which pay at or near minimum wage. (The average retail employee in Chicago earns $9.43/hr.) Perhaps taxing the Happy Meals the family from Wichita buys at Navy Pier makes sense. But what about lunch for the cashier working at the kiosk down the way? Non-rhetorically, is there a point where the tax-bite would deter you from eating out?
(The boundaries of the downtown restaurant surcharge remain murky. As a dedicated correspondent and someone who eats almost every day, I will make every attempt to dine my way to the answer. I’m helping the economy, right?)
The sales tax at restaurants downtown is criminal! I guess they assume that very few people will both to notice a few cents here and there. I can tell you I pay more for my Starbucks in River North (same beverage) than at the Starbucks in my neighborhood. And that the sales tax at various restaurants in the Merchandise Mart (all above 10%) varies quite a bit, with Quiznos actually pushing 11%!
ReplyDeleteRandy-
ReplyDeletethis is very cool!
Jane Dubro
Randy,
ReplyDeleteI loved your article, you are clever with your story telling while imparting important consumer info!
Thanks,
Jane Dubro