NCPA - National Center for Policy Analysis


July 29, 2005

Detroit Mayor Kwame Kilpatrick recently proposed a two percent tax on fast-food purchases, alarming critics who say it would fall mainly on low- and middle-income persons and would slow economic development. John W. Skorburg (University of Illinois) says if the tax is approved, Detroit would become the nation's first major city to levy a special tax on fast-food meals.

House Bill 4804, introduced in May by State Rep. Marsha Cheeks (D-Detroit), would allow Detroit to levy a two percent excise tax on fast-food restaurant sales; it would:

  • Bring in $17 million a year, which Mayor Kilpatrick hopes will help close a $300 million city budget deficit.
  • Come on top of Michigan's 6 percent sales tax on restaurant meals.
  • Apply to any food item sold at a fast-food restaurant, including low-fat and low-calorie salads.

Before the tax can take effect, Detroit voters would also need to approve it, and state law would need to be changed. Some political observers say such a change will face skeptical lawmakers in Michigan's Republican-controlled legislature.

Source: John W. Skorburg, "Critics Can't Stomach Detroit Mayor's Fast-Food Tax Proposal," Heartland Institute, Budget and Tax News, Volume 3, Number 6, July 2005.


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