Comments on: Selective Sales Taxes, Sliced Bagels

By: David Stokes

David Stokes — Fri, 27 Aug 2010 15:51:42 +0000

Mr. Duckworth,
Rarely does one get the pleasure of being attacked for not writing something on which you have, in fact, written rather extensively. I am pleased to share with you the following articles we have published, which I trust you will largely agree with:

http://showmeinstitute.org/publication/id.12/pub_detail.asp

http://showmeinstitute.org/publication/id.115/pub_detail.asp

http://showmeinstitute.org/publication/id.126/pub_detail.asp

http://showmeinstitute.org/publication/id.207/pub_detail.asp

By: Douglas Duckworth

Douglas Duckworth — Fri, 27 Aug 2010 08:49:19 +0000

Hey, I have an idea, why don’t you guys institute revenue sharing or advocate for municipal consolidation so municipalities don’t need to fight each-other with TIF? But doesn’t that fly in the face of localism and choice?

By: David Stokes

David Stokes — Thu, 26 Aug 2010 18:32:33 +0000

Dave G. is very close to the reason. The sales tax on groceries was lowered in the late ’90s as a result of the Hancock Amendment. By that, I mean that the Hancock Amendment around that time was requiring the state to rebate tax money each year – with lots of Missourians getting checks for $20 or so from the government. After a year or two of this, Governor Carnahan and the legislature (at that time both houses were headed by the Democrats) finally agreed that cutting taxes was better than having to mail out hundreds of thousands of checks (most of them very small) every year. Reducing the sales tax on groceries was what they were able to agree on for a tax cut.

While I would have favored a small, across-the-board income tax cut, we could have done far worse than cutting the tax on groceries. At least everyone (or almost everyone) buys groceries. At that time (late 90’s) I was probably going grocery shopping myself about twice a year…

By: DaveG

DaveG — Thu, 26 Aug 2010 02:08:00 +0000

My understanding is this was instituted to help the poor buy food. So taxes on food at grocery stores were removed a while back, but taxes on restaurants and their sliced-bagel sandwiches stayed in place.

By: ray

ray — Wed, 25 Aug 2010 19:23:54 +0000

Christine – we already have our own variation on this in Mo. Food is taxed at one rate if you buy it from a grocery store, and at another rate if it’s from McDonald’s. Why?

Food is even taxed at different rates from the same establishment based on whether you carry it out (groceries @ the grocery store) or eat it in (food/salad bar @ the grocery store). And it’s the EXACT SAME FOOD!

Pretty sure New York is the state that taxes snack foods somewhat extra. The tax commission up there had to decide what to do with candy bars sold in a multi-pack, versus individually. A taxpayer challenged the taxation of the multi-pack as a snack, because obviously, you wouldn’t eat the entire pack at once. And then, I even think there was the Twix case. Was a Twix bar a cookie or a candy? It made a difference in the way it was taxed!