Would You Like Tax With That Happy Meal?

We're familiar with "sin taxes" on such goods as cigarettes and liquor, but now there's a new tax twist: a tax on fast food.

Detroit Mayor Kwame Kilpatrick has proposed a 2% tax on fast food to help balance the city's $300 million budget deficit. A vote on the measure is scheduled for July 1.

If enacted, the measure would be the first in the nation to tax fast food. Clearly, restaurants aren't happy about the proposal. Others see a minefield of loopholes and litigation.

For instance, what would qualify as "fast food"? A burger at McDonald's, or ribs at Chili's? Would it depend on which has the most calories or fat content? Would it depend on how quickly the food was served? What about salads and other healthier fare being offered by fast-food restaurants these days? Would restaurants that tout their healthier menus, such as Subway, be affected?

Not mentioned in depth in Kilpatrick's proposal is any expected health impact of the tax. The tax does not appear to be designed to dissuade people from eating unhealthy food. Rather, it's merely an income-generating tool for the city... in which case the goal would be to get people to eat more fast food. A 2% tax would hardly break anyone's budget, after all.

So in a sense, the tax presents the worst of both worlds. People would still eat plenty of fatty, high-calorie food... and just pay more in taxes for the privilege.

Source: CNN/Money