Detroit mayor proposes fast-food tax

Restaurant owners say the tax is punishing those who have brought in revenue, and economists say the tax would present an unfair burden to the young and elderly, the primary consumers of fast food. City officials are still working on a way to define which restaurants would fall under the nicknamed "fat tax."

• Faced with a $300 million budget hole, Mayor Kwame Kilpatrick is hoping people in this already heavily taxed city won't mind forking over a few extra cents for their Big Macs and Whoppers.
• 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.
• Other cities and states have special taxes on prepared food, and some have tried "snack taxes."
• In New York, Assemblyman Felix Ortiz has proposed a 1 percent tax on junk food, video games and TV commercials to fund anti-obesity programs.
• But if approved, the Detroit tax would be the country's first to target fast-food outlets, the National Restaurant Association said.
• City officials say the proposal, part of the draft budget Kilpatrick presented to the City Council last month, is more about Detroit's financial health than anything else.
• Young people and senior citizens are big consumers of fast food and would bear an unfair share of the tax's burden, some critics contend.
• "We think it's extremely counterproductive to say to those people who have provided jobs, who have provided growth, 'We're going to levy on you a special tax that we don't levy on anyone else,'" said Andy Deloney of the Michigan Restaurant Association.
• The city currently has five major revenue streams: state revenue sharing, an income tax, property taxes, a tax on its three casinos and a utility tax.
• Michigan law limits Detroit's ability to raise income and property taxes, and high taxes are already cited as a major reason people and businesses have fled the city, further depleting the tax base.