A confusing Kentucky proposal to allow cities to support tourism by taxing restaurants.


Here in SoIn we already have a tax to support tourism. It’s a hotel room tax, which of course can be better defended as coming from the pockets of visitors, to attract other visitors.

Meanwhile I’m in tune with the basic vibe of Marsha’s case in opposition to what sounds like a poorly reasoned bill.

With national momentum gaining toward paying workers a living wage, and large cities continuing to enact mandates increasing the minimum wage (as they should!), small businesses — especially those in the hospitality category, which depend on optional household discretionary funds — are stretched to the breaking point. Both fledgling and established restaurants in Kentucky would suffer, and many would close, due to the effects of another added tax burden.

Restaurant profit margins are already as thin as the chimera that our restaurants are perched upon. All over the country, states and municipalities give massive tax breaks to large corporations with hope that they’ll create jobs in our cities. Proposed tax hikes such as HB 345 can and will actually destroy jobs at independent restaurants across the state, including in Louisville.

At the same time, this part confuses me. I’ve underlined the specific passage.

House Bill 345, sponsored by state Rep. Rob Rothenburger, R-Shelbyville, would allow cities to impose up to a 3 percent tax on restaurants, in addition to the 6 percent sales tax they already collect. If the bill passes, many restaurants will be forced to increase their menu prices or close their doors, because, even though 3 percent doesn’t sound like a lot, it’s actually dangerously close to the national common average restaurant profit margin of between 3 and 5 percent. Imagine being faced with half-to-all your profits being taxed away. You’d have little choice but to pass the costs to your customers.

But how many cities would impose such a tax? Phrased this way it’s not obligatory.

Maybe that’s a question for beloved pretend-progressive Greg “Budget Crisis” Fischer.

A sharp needle pointed at our restaurant bubble, by Marsha Lynch (LEO Weekly)

 … The bill aims to inject this money into state tourism, distributing “at least 25 percent of revenues generated to the tourist and convention commission, the remainder to be used to create or support infrastructure supporting tourism.” And while there’s no denying that tourism is great for the state and great for the businesses within it, legislators need to understand that most local restaurant profits are driven by — you guessed it — locals: people who live in the city and return to their favorite spots time and again. It’s the repeat business from Marty and Janine down the street that keeps local restaurants afloat, not the biannual visit of your aunt and uncle from Wichita.