November 26, 2014
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Added meal tax a bad deal

To the Editor:

Ten percent is too much!
Even in a sluggish economy, we have always been able to count on one industry in Rhode Island to do well, and to thrive during our tourist season – the restaurant industry.
Even during the past few lean years, restaurants have seen a pretty continuous flow of diners. Many have used special offers to keep bringing in their customers. And because people love to get out to eat once in a while, and because visitors to our state, especially during the summer, tend to visit restaurants during their stay, this portion of the hospitality business has remained relatively vibrant.
The proposal to add another two cents to the state’s meal tax could ruin all that.
Rhode Islanders already pay a 7 percent sales tax on meals they eat in restaurants, on top of which is added a 1 percent restaurant tax (which goes to municipalities), for a total of 8 percent. Proposed in the budget submitted recently by the governor is a 2 percent increase in the meal tax, to 3 percent, for a total 10 percent tax on every Friday night dinner out with friends and every plate of waffles at the neighborhood breakfast place.
Enough! There comes a time where the effort to raise funds through higher taxes reaches a tipping point. Raise taxes too high on a lunch at a local restaurant, and fewer people will eat lunch there, and fewer taxes will be collected, and more restaurants will suffer.
I worry about the restaurant operators in southern Rhode Island and in other areas of the state that rely on out-of-state visitors. I worry about the restaurants in parts of our state that border Massachusetts, where the tax is 6.25 percent. Rhode Island is already at 8. Going to 10 could mean the difference between staying in business or closing down.
It is likely this tax proposal will never be approved by the General Assembly as part of next year’s budget. It is likely the extra funds this was supposed to provide to cities and towns will nonetheless be budgeted because of May revenue numbers that are supposed to be better than once expected.
Perhaps this gubernatorial tax proposal was “dead on arrival” when it was introduced. If it was not, it needs to be rejected before the next budget is enacted.
Many people are struggling in Rhode Island. Some have cut back on everything else possible, allowing themselves a night out once in a while, a small luxury that helps them weather the storm of these tough times. Having to pay more may force them to stop restaurant visits. That’s not good for the individual, it’s not good for the restaurant industry and it could do more harm than good to our fragile economy.

James C. Sheehan
Senator – District 36
Narragansett, North Kingstown


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