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Letter: Minimum wage vs. sales tax


Letters, minimum wage, sales tax, Rich Gieser

Minimum wage vs. sales tax

There is a side to this debate that isn’t getting much press so I feel the need to express it.

Here is my story as a business owner in Cosmos.

Our patrons do the best they can with tipping.  My employees, my wife and I are well aware of the current business climate and we appreciate the business we get and any tip that may come our way.

It is a very difficult job. Anyone that’s done it knows that.

We have been struggling more than usual in the past year. Our employees, including the owners, wait, cook, serve, clean, fix, you name it. It all gets done and we try to keep smiling.

So let’s break down the numbers here a bit.

Sally makes $7.25 an hour.  She waits the tables, etc. She does it all. If she averages $20 an hour, I would be surprised. But let’s say she does. That would be $12.75 an hour in tips.  And let’s say that $12.75 per hour reflects 15 percent gratuity. That would mean Sally took in $85 per hour in sales.

Now to make things easy, let’s say a hamburger cost $5.  That means we sold 17 hamburgers.

If the minimum wage rose to $9.50 per hour, Sally gets a raise of $2.25. With the extra Social Security, Medicare and unemployment tax, we’re talking about another 20 cents. So let’s say $2.45 per hour more in costs for the company. This is about 15 cents per hamburger.

Now let’s say instead of paying 6.875 percent sales tax on that burger, you paid 5.5 percent. You’ve saved about 7 cents.

So what has happened?

We have some much needed tax relief.

Sally can afford her rent, maybe some new shoes, and quite possibly one of those $5 hamburgers. She can come to work knowing that she really is appreciated. She is happy at work and possibly earns a better tip than before.

You got the same hamburger, and if the owner is honest, will only have to charge 8 cents more.

I think we could all handle that.

Rich Gieser