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View Full Version : U.S. Issues Phoenix gives OK to 2% tax on food


petegz28
02-04-2010, 09:02 AM
Desperate to save police, fire and other city jobs, a divided Phoenix City Council on Tuesday approved a sales tax on grocery items that will generate tens of millions of dollars a year.

The 2 percent food tax will take effect April 1 and expire after five years, though Mayor Phil Gordon said the council has the option of reversing its decision after it hears from the public during 15 budget hearings planned for this month.

The tax on milk, meat, vegetables and other food purchased by shoppers will generate an estimated $12.5 million for the fiscal year
that ends June 30. It will raise another $50 million for fiscal 2011. Food purchased with food stamps will not be taxed.

The extra tax revenue means Phoenix will have more money in its coffers to help close a $241 million general-fund budget deficit through June 2011. Last week, budget officials proposed cutting $140 million in services. Other special funds for things like transit also could get money.

City Manager David Cavazos proposed eliminating 1,379 citywide positions, including nearly 500 police officers and firefighters. Among the dozens of targeted cuts, libraries and senior centers would be closed, an after-school program would be dismantled, and bus and light-rail service would be significantly reduced.

It's unclear exactly where the extra money would be allocated. On Feb. 9, Cavazos and other staff will offer options of how they can reverse proposed cuts using food-tax revenue.

Phoenix shoppers who buy paper towels, toothpaste and other non-food items at a grocery store already pay an 8.3 percent sales tax, 2 percent of which goes to the city. But Phoenix has not taxed food items since the early 1980s.

After Tuesday's vote, Mesa and Surprise are the only Valley cities that do not tax food items, though Surprise is eyeing a 1 percent food tax.

Elizabeth Van Wie told the council that the tax will be devastating for her family of six, which spends $900 to $1,300 a month on groceries. Business at the Van Wies' car wash has taken a 60 percent dive during the recession, and the family has begun growing vegetables to save money.

She suggested taxing fast food, cigarettes or alcohol, instead. "To tax a basic need for my family is disastrous," said Van Wie, her four young children in tow.

But union leaders argued the tax would keep more police officers and firefighters on the streets and emergency response times down.

Pete Gorraiz, president of the United Phoenix Firefighters Association, said city budget officials told him the food tax could provide a $6.9 million boost to the fire budget, saving nearly 40 firefighters' jobs and up to eight civilian employees. The extra revenue would spare three engine companies and an ambulance.

"There are services, and there are critical services," Gorraiz said. "In our business, if you start taking away our ability to meet response times, it's literally the difference between life and death."

Council members approved the tax on a 6-3 vote, with council members Sal DiCiccio, Bill Gates and Peggy Neely dissenting.

DiCiccio called the tax regressive, saying it harms the working poor, seniors and others on fixed incomes. Gates and Neely said they objected to pushing the tax through without giving residents enough time to have their say. Gordon had called for a special meeting just 24 hours earlier so the council could vote on the tax.

"We need to wait until everyone has had an opportunity to weigh in before we vote on this food tax. That is the Phoenix way of doing things," Gates said during the four-hour meeting. "I'm concerned this will enflame some people who will say, 'I didn't have the opportunity to be heard.' "

Gordon said that the sooner the council adopted the tax, the more money there would be to reduce proposed cuts. Implementing the tax in April means the city would have an extra $12.5 million for the current fiscal year.

Added Councilman Michael Nowakowski, an early supporter of the tax: "We're investing in our kids, we're investing in our seniors, we're investing in our libraries and our parks. We're investing in our future."

But local grocers and shoppers said Phoenix's food tax will hit them in their pocketbooks at a time they can least afford it.

"You can't do that to people right now in this market. They're being crunched in every possible way, and this was the only area they were not being taxed on," said Ken Schnitzer, owner of Luci's Healthy Marketplace, a specialty grocery store that opened last year in Phoenix.

"We're a new business that is trying to make it," he added. "Obviously, this will hurt our sales because people can't spend much money, and these are essentials that people need on a daily basis."

Buying cookies and other snacks at Bashas' Supermarket at Seventh Avenue and Osborn Road, Mark Evertz, a snowbird from Montana, said he may start spending winters in Mesa or another community that doesn't tax food items.

"It doesn't take long before a few pennies here and a few pennies there start to add up," said Evertz, 59, a disabled veteran who relies on his fixed pension benefits.

http://www.azcentral.com/news/articles/2010/02/03/20100203foodtax0203.html

petegz28
02-04-2010, 09:04 AM
I am sure Obama will come out soon and offer the people of Phoenix a tax deduction for their increased sales tax on FOOD!

BucEyedPea
02-04-2010, 09:08 AM
Just what the average person needs during these times with food prices soaring.

Chief Henry
02-04-2010, 09:37 AM
I just spent four days in the Phoenix and Scottsdale area. It is one of the cleanest cities
I've ever been too. I was trying to find a cigarette butt or a candy bar wrapper or even a fast food cup. The places we saw were spot less. FWIW

That area must take great pride in their apperance. It was very pleasant.

HonestChieffan
02-04-2010, 09:54 AM
Simple math....taxing bodies have to have revenue. If we dont stop spending they have to look for income. The VAT is coming sure as hell. Watch toll roads. Any opportunity to extract revenue will be looked at.

IF we are lucky, this may force taxing bodies like schools, towns/cities, counties to really ask what is nice to do vs what is necessary and start doing what needs to be done and reduce to the real needed basics.

patteeu
02-04-2010, 01:08 PM
This is bad timing, but the best sales tax is a tax that applies to everything including food and has the lowest rate possible. If you exclude the high volume of sales made up by food sales, you have to jack up the rate on other sales to achieve the same result. Everyone should be a part of the tax base and lower rates will have a smaller distortion effect on economic activity.

KILLER_CLOWN
02-04-2010, 01:11 PM
There shouldn't be a tax on food, now a tobin tax on wall street is what's needed.

fan4ever
02-04-2010, 01:17 PM
Live in Scottsdale...skimmed the article yesterday...had been hearing about it.

One thing will likely happen; all the grocery stores that are close to the border on neighboring cities will go out of business.

I agree with Patteeu...if you're going to tax for the benefit of everyone, include everyone...picking on a select group is inherently unfair IMO.

fan4ever
02-04-2010, 01:19 PM
I just spent four days in the Phoenix and Scottsdale area. It is one of the cleanest cities
I've ever been too. I was trying to find a cigarette butt or a candy bar wrapper or even a fast food cup. The places we saw were spot less. FWIW

That area must take great pride in their apperance. It was very pleasant.

Thanks for the P.R. . . . we need it. Get in some golf?

Hydrae
02-04-2010, 01:38 PM
This is bad timing, but the best sales tax is a tax that applies to everything including food and has the lowest rate possible. If you exclude the high volume of sales made up by food sales, you have to jack up the rate on other sales to achieve the same result. Everyone should be a part of the tax base and lower rates will have a smaller distortion effect on economic activity.

Keep the taxes off necessities like, I don't know, food. You can do whatever you want with regard to taxes on non necessities like televisions, computers, cell phones, etc.

Grey areas might include clothing and shoes.

Hydrae
02-04-2010, 01:40 PM
Keep the taxes off necessities like, I don't know, food. You can do whatever you want with regard to taxes on non necessities like televisions, computers, cell phones, etc.

Grey areas might include clothing and shoes.

Having said that, the first thing that must happen is for all these governmental types to learn to live within a budget and cut spending. It may not be politically comfortable but you shouldn't be getting elected for an easy job anyway.

Chief Henry
02-04-2010, 01:46 PM
Thanks for the P.R. . . . we need it. Get in some golf?

I had the opprotunity to play at the Gainey(sp) Ranch course near the Hiatt Regency where I was staying. I didn't go with the group I was with. The mrs. and i went to old town area for some shopping. I was in town for a conference. We had some fairly nice weather too.

Nice area to visit !! I like my grass in the summer and the fall colors during football season :)

patteeu
02-04-2010, 01:56 PM
Keep the taxes off necessities like, I don't know, food. You can do whatever you want with regard to taxes on non necessities like televisions, computers, cell phones, etc.

Grey areas might include clothing and shoes.

There are lots of gray areas. For example, Grey Poupon mustard isn't a necessity.

Everyone, including those who only buy necessities (however you define it) ought to share the tax burden. If the tax is spread across the broadest base possible, the rate can be minimized. If Texas applied sales tax to everything, they could probably reduce their rate to 5% (I pulled that number out of thin air so don't ask for a link).

No one is so poor that they can't afford to pay a 5% tax on their consumption if that's what it takes to fund a minimal level of state activities. Until we stop making big government free for some people, we won't be able to get them to stop voting for more and more of it.

patteeu
02-04-2010, 01:57 PM
I had the opprotunity to play at the Gainey(sp) Ranch course near the Hiatt Regency where I was staying. I didn't go with the group I was with. The mrs. and i went to old town area for some shopping. I was in town for a conference. We had some fairly nice weather too.

Nice area to visit !! I like my grass in the summer and the fall colors during football season :)

Is the Mrs. really a Mr. because it seems gay to choose shopping over golf. :shrug:

Just kidding. :p

CoMoChief
02-04-2010, 02:07 PM
Why isn't this country using the "Fair Tax" model????

KC native
02-04-2010, 02:10 PM
No one is so poor that they can't afford to pay a 5% tax on their consumption if that's what it takes to fund a minimal level of state activities. Until we stop making big government free for some people, we won't be able to get them to stop voting for more and more of it.

Why isn't this country using the "Fair Tax" model????

Patty, your flat tax dreams are doomed.

CoMo thinks the US should use the "fair" tax model.

ROFL

fan4ever
02-04-2010, 03:16 PM
I had the opprotunity to play at the Gainey(sp) Ranch course near the Hiatt Regency where I was staying. I didn't go with the group I was with. The mrs. and i went to old town area for some shopping. I was in town for a conference. We had some fairly nice weather too.

Nice area to visit !! I like my grass in the summer and the fall colors during football season :)

Oh man, you were in my back yard...almost literally. I don't live in Gainy Ranch, but my home backs onto 78th Street which runs along the back 9 of the golf course and the housing. If you hooked a shot bad enough, you could have bounced your ball into my back yard...and being a Chief fan, I'd have bought you a beer in my patio turned Cantina.

vailpass
02-04-2010, 03:32 PM
I just spent four days in the Phoenix and Scottsdale area. It is one of the cleanest cities
I've ever been too. I was trying to find a cigarette butt or a candy bar wrapper or even a fast food cup. The places we saw were spot less. FWIW

That area must take great pride in their apperance. It was very pleasant.

We keep it picked up in the Scotts/PV/Cave Creek area.
Next time you are in town take a trip down to Van Buren st. and tell me what you think.

Chief Henry
02-04-2010, 04:18 PM
We keep it picked up in the Scotts/PV/Cave Creek area.
Next time you are in town take a trip down to Van Buren st. and tell me what you think.

I love the helmets in your avatar :)

Is Van Buren St. on the west side. I was told the west side is not as nice of an area.

Chief Henry
02-04-2010, 04:29 PM
Oh man, you were in my back yard...almost literally. I don't live in Gainy Ranch, but my home backs onto 78th Street which runs along the back 9 of the golf course and the housing. If you hooked a shot bad enough, you could have bounced your ball into my back yard...and being a Chief fan, I'd have bought you a beer in my patio turned Cantina.

How about that ! Its a small world. We did go to a place called "zippos" I think thats what it was called ??? It was not far from the Gainy Ranch. It had cold Beer and the food was great. We had some "wraps" that were outstanding. I would recommend anyone to try the Monoca Wrap .

Our waitress said she was from Iowa. We talked for about 10 minutes...and she was very cute.

We also ate at a place called "Grimaldi's Pizza" in the Old town area. It was very good. Thin Crust, lots of tiny pepperoni's with white sauce instead of red with Garlic buttered crust...It was delicious stuff. They called it the pizza that made the Brooklyn Bridge famous :shrug:

Also ate at a Mexican place close to the Gainy Ranch called "Camarons" (sp)
Excellent food with some kick ass salsa. The Horny Toad marguritta was
dam good too.


The Gainy Ranch is a very nice place. Its BIG too.


If I ever get back, I'll give you a shout out.

Hydrae
02-04-2010, 04:43 PM
There are lots of gray areas. For example, Grey Poupon mustard isn't a necessity.

Everyone, including those who only buy necessities (however you define it) ought to share the tax burden. If the tax is spread across the broadest base possible, the rate can be minimized. If Texas applied sales tax to everything, they could probably reduce their rate to 5% (I pulled that number out of thin air so don't ask for a link).

No one is so poor that they can't afford to pay a 5% tax on their consumption if that's what it takes to fund a minimal level of state activities. Until we stop making big government free for some people, we won't be able to get them to stop voting for more and more of it.

I understand your point about the free loaders. I just don't think it is right to tax something that is necessary to continue daily living. That does leave a lot of points to disagree about (Gray Poupon is certainly not necessary).

Should those using food stamps be paying tax? If so, how do they pay cash when they are using food stamps? If not, how are they not part of the group that is causing the growth of the entitlement issue?

petegz28
02-04-2010, 04:56 PM
I understand your point about the free loaders. I just don't think it is right to tax something that is necessary to continue daily living. That does leave a lot of points to disagree about (Gray Poupon is certainly not necessary).

Should those using food stamps be paying tax? If so, how do they pay cash when they are using food stamps? If not, how are they not part of the group that is causing the growth of the entitlement issue?

I don't have a problem with taxing food. I do have a problem with taxing it in the current economic environment when there was no tax.

The State of CA does not have a sales tax on food and look at their broke ass.

Hydrae
02-04-2010, 04:57 PM
I don't have a problem with taxing food. I do have a problem with taxing it in the current economic environment when there was no tax.

The State of CA does not have a sales tax on food and look at their broke ass.

I don't understand the desire to tax a basic life necessity. What's next, breathing tax?

Rain Man
02-04-2010, 06:58 PM
The 2 percent food tax will take effect April 1 and expire after five years, though Mayor Phil Gordon said the council has the option of reversing its decision after it hears from the public during 15 budget hearings planned for this month.



I'll bet anyone on the board $4 in real cash that this tax doesn't go away in five years.

patteeu
02-04-2010, 07:13 PM
I understand your point about the free loaders. I just don't think it is right to tax something that is necessary to continue daily living. That does leave a lot of points to disagree about (Gray Poupon is certainly not necessary).

Should those using food stamps be paying tax? If so, how do they pay cash when they are using food stamps? If not, how are they not part of the group that is causing the growth of the entitlement issue?

No one will go hungry in this country just because food is included in a sales tax. There are currently 9 states that have sales tax on food purchased for home consumption*, but yet we don't have rampant hunger problems anywhere.

Like with most liberal ideas, excuses based in compassion can be made for them, but the impact on society ends up being negative. IMO.


---------------------
* 7 of them have a lower rate on food than on other sales and 2 apply the same rate. There are another 5 states that apply the full rate but offer some form of compensating tax credit or rebate.

Royal Fanatic
02-04-2010, 07:18 PM
Until we stop making big government free for some people, we won't be able to get them to stop voting for more and more of it.
That is a very profound statement and 100% true.

The Mad Crapper
02-04-2010, 07:29 PM
That is a very profound statement and 100% true.

The only way to stop it is to outlaw the dem party--- or anybody who doesn't pay federal income tax doesn't vote.

BucEyedPea
02-04-2010, 08:07 PM
I have a MAJOR problem taxing food. And I don't care if it's a gourmet delicacy either. Once you begin to get the govt involved in what is necessary to eat then you invited micromanagement and fascism into your life.

googlegoogle
02-04-2010, 08:12 PM
They say they can't cut anymore! LOL.

The republican governor there is weak.

Make cuts across the board.

KILLER_CLOWN
02-04-2010, 08:56 PM
I'll bet anyone on the board $4 in real cash that this tax doesn't go away in five years.

It will be replaced by a newer, better LARGER tax.

patteeu
02-04-2010, 09:28 PM
I have a MAJOR problem taxing food. And I don't care if it's a gourmet delicacy either. Once you begin to get the govt involved in what is necessary to eat then you invited micromanagement and fascism into your life.

Grow your own food and you won't have to worry about it. You don't have a right to a well stocked, tax-free grocery store.

Tolerating multiple tax rates invites micromanagement. A single rate tax is the opposite of micromanagement.

RJ
02-04-2010, 09:43 PM
The food tax in New Mexico was abolished a few years ago when the state was flush with gas and oil money. Now we're not flush with any kind of money and there's a proposal to bring the food tax back.

It's pretty simple, really. Raise taxes or cut spending. State governments around the country are facing some very difficult choices.

petegz28
02-04-2010, 09:48 PM
The food tax in New Mexico was abolished a few years ago when the state was flush with gas and oil money. Now we're not flush with any kind of money and there's a proposal to bring the food tax back.

It's pretty simple, really. Raise taxes or cut spending. State governments around the country are facing some very difficult choices.

The issue is, unlike the Fed Gov, most State and Local Gov's have to balance their budget each year.

BucEyedPea
02-04-2010, 09:54 PM
Grow your own food and you won't have to worry about it. You don't have a right to a well stocked, tax-free grocery store.
Where did I say I have a "right" to any of that? You're a jerk!
Taxing food is insidious and evil because it's a vital necessity. Besides, how do you know if I don't grow some of my own food anyway? FYI soil is taxed here as is fertilizer, seeds and plants.

Tolerating multiple tax rates invites micromanagement.
Who argued for that? I just said not to tax food. I prefer the govt to cut it's spending the way the average person is doing. I prefer no income tax first and a national sales tax second in place of an income tax. And you of all people know that. So quit being a jerk!

Wow! You're in full strawman mode today.

A single rate tax is the opposite of micromanagement.

In case you don't know a zero tax rate on something is a single tax rate.
So much for micromanagment. There's none at all here.

EPIC FAIL!

patteeu
02-04-2010, 11:09 PM
Where did I say I have a "right" to any of that? You're a jerk!
Taxing food is insidious and evil because it's a vital necessity. Besides, how do you know if I don't grow some of my own food anyway? FYI soil is taxed here as is fertilizer, seeds and plants.

Grocery store food is not a vital necessity, as I pointed out in my post. You can grow your own, tax free. It's really a lame argument to claim that one type of sale ought to get special tax treatment because it's vital because there are all kinds of things that are as vital as grocery store food that get taxed. Staying warm in the winter is vital so maybe heating oil should be tax free, for example. I just think it's a bad idea to start letting government decide what's vital and what's not vital.

I'm not a jerk. Sorry if I hurt your feelings.

Who argued for that? I just said not to tax food. I prefer the govt to cut it's spending the way the average person is doing. I prefer no income tax first and a national sales tax second in place of an income tax. And you of all people know that. So quit being a jerk!

Wow! You're in full strawman mode today.

In case you don't know a zero tax rate on something is a single tax rate.
So much for micromanagment. There's none at all here.

EPIC FAIL!

You did. You, at least implicitly, advocated a tax system that includes at least two different rates. The rate on normal things and a zero rate on vital things. That's an invitation to micromanagement.

Are you going to be OK?

BucEyedPea
02-05-2010, 07:10 AM
Did you say something?

I think you really just have a need to argue even when there's nothing to argue about. Make things up spin it around just to argue.
Delusional.

patteeu
02-05-2010, 11:40 AM
I think you've got serious emotional issues, BucEyedPea. It's a shame that your feelings are hurt so easily.

HonestChieffan
02-05-2010, 12:05 PM
Most states tax food sales, some at full rate, others at a reduced rate. Id expect to see th tax rate on food for state sales tax to increase everywhere and like in Phoenix, see some local taxes start to get levied on food.

VAT would impact food as well when they roll that out

vailpass
02-05-2010, 12:09 PM
I love the helmets in your avatar :)

Is Van Buren St. on the west side. I was told the west side is not as nice of an area.

Van Buren was the original main street, used to be THE place to be in the 50s. Then the highway came and passed it by.
Now it is hookers, no-tell motels and hole-in-the wall restaurants serving the best mexi food in the Valley.
It is where the Miranda Rights came from.

patteeu
02-05-2010, 12:51 PM
Most states tax food sales, some at full rate, others at a reduced rate. Id expect to see th tax rate on food for state sales tax to increase everywhere and like in Phoenix, see some local taxes start to get levied on food.

VAT would impact food as well when they roll that out

That is how it used to be, but today most states don't tax food sales (http://www.cbpp.org/cms/?fa=view&id=1230) (at least at the sales tax level). The white states on the map below don't tax food sales. The yellow states tax at the full sales tax rate but offer an offsetting tax credit or rebate. The others are adequately explained in the legend.

http://www.cbpp.org/images/cms/3-16-06sfp3-f1.jpg

HonestChieffan
02-05-2010, 12:54 PM
Okie dokie....a lot do, thats more accurate. Needless to say, more will have to start.

patteeu
02-05-2010, 12:59 PM
Okie dokie....a lot do, thats more accurate. Needless to say, more will have to start.

I wouldn't bet against you on that.

fan4ever
02-05-2010, 01:04 PM
How about that ! Its a small world. We did go to a place called "zippos" I think thats what it was called ??? It was not far from the Gainy Ranch. It had cold Beer and the food was great. We had some "wraps" that were outstanding. I would recommend anyone to try the Monoca Wrap .

Our waitress said she was from Iowa. We talked for about 10 minutes...and she was very cute.

We also ate at a place called "Grimaldi's Pizza" in the Old town area. It was very good. Thin Crust, lots of tiny pepperoni's with white sauce instead of red with Garlic buttered crust...It was delicious stuff. They called it the pizza that made the Brooklyn Bridge famous :shrug:

Also ate at a Mexican place close to the Gainy Ranch called "Camarons" (sp)
Excellent food with some kick ass salsa. The Horny Toad marguritta was
dam good too.


The Gainy Ranch is a very nice place. Its BIG too.


If I ever get back, I'll give you a shout out.

Sounds good; glad you had a good time.

RJ
02-05-2010, 01:09 PM
Van Buren was the original main street, used to be THE place to be in the 50s. Then the highway came and passed it by.
Now it is hookers, no-tell motels and hole-in-the wall restaurants serving the best mexi food in the Valley.
It is where the Miranda Rights came from.


In Albuquerque we have the same road, only we call it Central Avenue. It was a vibrant place when Route 66 ran through town but I-40 put an end to that. Most grown ups stay away from there after dark.

Inspector
02-05-2010, 02:46 PM
Grey Poupon mustard isn't a necessity.

Oh now wait just a darn minute there. Let's not get all crazy!

Inspector
02-05-2010, 02:49 PM
(Gray Poupon is certainly not necessary).

Good God!

What is wrong with you people???

WHAT IS THE WORLD COMING TO????

BucEyedPea
02-05-2010, 06:19 PM
Oh now wait just a darn minute there. Let's not get all crazy!

Exactly! Who is he to tell us how to season our food....I mean seasoning isn't necessary for survival either but people like food to taste good. Good heavens that's subject to regulation now.