Mario Burgos

Clear thinking and straight talk from the top of a mountain.

Wednesday, November 18, 2009

Chamber Advocates for Taxing Food

This is one of those "Say What!" moments. I actually had to read it two or three times before I could believe what I was reading.

Terri Cole, president and CEO of the Albuquerque Chamber of Commerce, told the committee that she'd spoken with food banks and others who distribute food to the poor. "They tell me the tax break hasn't really been that helpful to the very poor," she said. Cole said it might be more helpful to bring back the food tax and have the state directly fund food distributions to the needy.

The food tax repeal costs the state about $200 million a year, Cole said.

Okay, this is wrong on so many levels. First a few disclaimers are in order. I used to be a Greater Albuquerque Chamber of Commerce member. I opted not to renew my membership when the Chamber made the decision to be the only Chamber of Commerce in the State of New Mexico to support Governor Richardson's anti-business and ultimately ill-fated healthcare initiative. I've not looked back since, and with the Albuquerque Chamber now cheerleading regressive tax increases, I don't think I ever will.

The second disclaimer is that I support food banks. We are Roadrunner Food Bank Full Plate Society members, and I'd encourage all readers of this blog to consider supporting this or other food bank efforts during these trying economic times.

So, with the disclaimers out of the way, let's dive into the problems here. Teri Cole's assertion that the tax break on food hasn't been very helpful to those getting food from food banks is absurd. Of course, they aren't helped by the tax break on food. They're not buying the food. They're given the food. So, there isn't any tax for them to get a tax break. But, there are so many other families in need not utilizing food banks that are benefiting from that tax break.

Let's also consider the cost of this break we got on food. You might remember that when the food tax was introduced, it was paired with another tax increase that resulted in a net tax gain:

CLAIM #4
eliminating the tax on food

FACT #4
"So while New Mexico is giving up gross receipts taxes on these qualifying medical and food receipts, it is going to be taking more from all other taxable receipts. According to Fred Winter, local CPA, "This means that the overall gross receipts tax rate will increase from 7.00% to 7.50% for the Town of Taos."

Now, the Albuquerque Chamber wants to see the reduced tax increase piled on top of this previous tax increase. Are you kidding me?

And, the rationale for this increase?

The food tax repeal costs the state about $200 million a year, Cole said.

If the state passed a net tax increase along with the the tax cut. The state didn't lose any money. It gained money. If you take the Chamber's position to an extreme, consider how much money not having a 100% tax on all income is costing the state.

Since when does a Chamber of Commerce advocate for giving the government more of our hard-earned money?

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