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Monday, May 9, 2005

Detroit eyes tax on Big Macs, Whoppers

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By

DETROIT (AP) -- Would you like fries with that? Either way, the Detroit city treasury would like a bite.

Faced with a $300 million budget hole, Mayor Kwame Kilpatrick is hoping people in this heavily taxed city won't mind forking over a few extra cents for their Big Macs and Whoppers.

Mr. Kilpatrick wants to ask Detroit voters to approve a 2 percent fast-food tax -- on top of the 6 percent state sales tax on restaurant meals. The mayor says consumers will barely notice the extra cents at the cash register, but critics say the tax would burden the poor and hamper economic development.

"Just tell him we're going to go to Bloomfield Hills to McDonald's if he puts a tax on it," said Ebony Ellis, 18, referring to an affluent Detroit suburb. She and four friends eat at a McDonald's in Detroit every day after school because their schedule doesn't leave them time for lunch.

Other cities and states have special taxes on prepared food, and some have tried "snack taxes." In New York, Assembly member Felix Ortiz has proposed a 1 percent tax on junk food, video games and TV commercials to fund anti-obesity programs.

If approved, the Detroit tax would be the country's first to target fast-food outlets, the National Restaurant Association said. The tax would apply to anything sold at a fast-food restaurant -- even salads.

Opponents have been quick to call it a "fat tax" in the city dubbed the nation's fattest in 2004 by Men's Health magazine. Detroit fell to No. 3 for 2005.

City officials say the proposal, part of the draft budget Mr. Kilpatrick presented to the City Council last month, is more about Detroit's financial health than anything else.

Although the tax would not come close to fixing Detroit's financial problems -- officials predict it would bring in $17 million in the next fiscal year -- every dollar counts in a city bracing for mass layoffs and service cuts.

Enacting the tax likely would require a change in state law, potentially a tough sell in the Republican-controlled Legislature. The tax also would require the approval of Detroit voters.

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