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Home » News » Opinion » Free Press » A 'free breakfast' ...
Wednesday, March 10, 2010

A 'free breakfast' tax?

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They say, "There's no such thing as a free lunch." Alas, some officials in Tennessee want to make sure "There's no such thing as a free breakfast," either.

You may have read that Democrats in the General Assembly have sponsored legislation to raise $10 million by taxing the free breakfasts that 70 percent of the hotels and motels in the state provide as a way to attract guests.

Whether or not you think that's a good idea, the state does not seem to have thought through the consequences of levying a breakfast tax.

"State officials stress that the businesses would be taxed and not the hungry patrons," The Associated Press reported. "Reagan Farr, commissioner of the Department of Revenue, doesn't believe hotels would pass the tax onto consumers."

Isn't that always the claim when a new tax is proposed -- that it won't have a negative effect on the economy, and that it is just "free money" for the taking?

The fact is, hotels and motels offer complimentary breakfasts to keep more of their rooms full, which boosts economic activity and supplies government revenue in the form of hotel and motel taxes. Innkeepers who operate on narrow profit margins might not have any choice but to pass the cost of a new breakfast tax on to their guests -- or they may have to lay off workers, which would be equally undesirable.

Plus, counties and cities -- including Hamilton County and Chattanooga -- that rely on hotel and motel taxes could see that revenue drop if a breakfast tax increased the price of a motel stay and thus discouraged tourism.

Tennessee -- which wisely does not have a general individual income tax -- is considered a low-tax state. But there is an inclination by some to impose damaging new taxes here, as well as in other states.

The breakfast tax proposal should be dropped to avoid real harm to our economy.

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1 Comment

The free breakfast tax should be dropped because it is a joke and sham to our state. It reminds me of the supposedly true Civil War story of the siege of Chattanooga when Union troops sifted through horse dung to find bits of undigested corn. They need to bite the bullet and cut the waste from the budget.

Username: EaTn | On: March 10, 2010 at 2:55 a.m.
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