Too Much of a Bad Thing is Worse …
The citizens of Michigan who reside in the urban sprawl of Detroit are waking up to the brave new world of Stealth Cartel partnerships between their elected officials, and their government’s comrades in collusion, Big Business. For this and other related articles – visit the StatesOnTheTake.com Law and Business Library.
This time, the Stealth Cartel is the first ever (but by no means last) proposed tax on “fast food” for the city of Detroit. The city’s mayor, Kwame Kilpatrick, citing the city’s extreme financial situation, has asked voters to approve a 2% tax on “fast food” restaurants only – on top of the already 6% state sales tax on all restaurant meals.
The mayor’s critics, including Andy Deloney of the Michigan Restaurant Association say this new tax would unfairly burden the poor and impede economic development, but that’s only ½ of the picture. Critics note that the measure, if successful, would probably require approval of the Michigan state legislature, and regard this as unlikely due to the conservative/Republican make up of the state’s house and senate. But this presumption of defeat by the State legislature may be far from correct.
The less obvious, but equally sinister result of this “fast food tax,” has already been witnessed in the ongoing Big Tobacco “Master Settlement Agreement” (“MSA”), which is in reality, not a “settlement” but a partnership in fact, between Big Tobacco and the 46 participating state governments in 1998.
The effect of this tax increase for all — will result in a decrease in business, for only the small. And it is the small, independent restaurants, which will find themselves, treading down the same road of despair and eventual extinction upon which the small independent tobacco manufacturers and retailers now find themselves, who are currently struggling to maintain their clientele due to state governments’ intervention on behalf of their Big Business comrades in collusion, Big Tobacco.
While this “fast food tax” would be enacted equally as to all “fast food” (as yet to be defined by the Mayor), the effects of this 2% tax will, in reality, be easily absorbed by the national chains – “Big Fast Food.” It is the small, independent, local and Mom and Pop Coney Island shops and burger houses, that may find even this incremental increase in their prices – too much for their largely middle class and elderly customers to afford, or at least afford as often as they have been able to in the past.
To increase the effects of the “Fast Food” tax on the Mom and Pop restaurants, Big Fast Food can, for the short run and beyond, maintain its present prices, or even collectively lower their prices, all for the big pay-off in the long term of insuring the permanent demise of their local and independent competition. The common goal of this potential collusive activity between the state government and Big Fast Food is evident – as already witnessed by the ongoing efforts of Big Tobacco; that being the creation of a very satisfied and giving political wealth spring of financial backers, in gracious consideration for the elected official’s (of both parties) creation of a de-facto monopoly where the only remaining competition is other Big Business, in this instance - Big Fast Food.
This scenario is by no means a done deal however. Despite a near national media blackout over the past seven years, small businesses and Citizen Consumers have initiated litigation to challenge the anti-trust state government Stealth Cartel partnership between state governments and Big Tobacco in several states.
This “fast food” tax must be met head on by a grass roots response from the Citizen Consumers and independent Mom and Pop restaurant owners of Detroit and greater Michigan, as well as the media – both local and national. This “fast food tax” must be shown for what it truly represents: the first step in the destruction of the fast food free market and the creation of a de facto Big Fast Food cozy oligopoly, with their would be comrades in collusion, local and state government elected officials.
If unchecked, this cartel’s goal will be the mutually beneficial goal of actively limiting the Citizen’s Consumer’s choice in the free market, while depriving the independent business person of his or her right to compete in what should be the free market, all in exchange for big time political contributions from Big Fast Food, for the many thanks to their elected officials who will have actively fostered this economic environment of collusive activity.
Take Back Your State… SGA