<

For Immediate Release: November 25, 1997

Contact: Frank Conte, Communications 617-573-8050; 8750 fconte@beaconhill.org

New analysis shows taxes take bit out of Thanksgiving meal

(BOSTON)Ð A new economic analysis of the price of an average Thanksgiving dinner shows taxes consume about 30% of the cost of the meal. If an alcoholic beverage is added, the percentage is even higher. On average, almost 65% of the cost of most liquor goes into federal and state tax coffers. The taxes associated with the cost of going out for a Thanksgiving meal are approximately 32% of the bill's total.

According to the Beacon Hill Institute (BHI) at Suffolk University in Boston, which compiled the information, both up-front and hidden taxes inflate the cost of the holiday. "Everything we buy, including our holiday meal, costs more as the result of stealth taxes that get passed on to us as consumers," said David Tuerck, BHI executive director. "We might not notice these taxes as we sit down to eat, but they are there, taking up a large chunk of our income and exerting a dampening effect on economic activity."

Federal and state taxes drive up transportation costs associated with getting to the Thanksgiving dinner. Over 54% of the price of a gallon of gasoline goes to various taxes. (This does not include any excise tax, fees or sales taxes paid on a family's vehicle.) About 40% of the cost of a roundtrip airline ticket consists of taxes. While the airline ticket may show only 10% of the cost as taxes, consumers pay unseen taxes including unemployment insurance taxes, sales taxes, payroll taxes, capital gains taxes, workers compensation taxes, fuel taxes, property taxes and income taxes.

An even larger portion of the cost associated with lodging goes toward taxes. Forty-three percent of the price of a hotel room can be directly linked to taxes. This includes various up-front and hidden taxes and fees associated with employees, facilities, utilities, and earnings. The holiday season is every bit as good for the tax collector as it is for retailers.

The analysis was conducted as part of BHI's continuing "State of the Household" economic and opinion series and with the cooperation of Americans for Tax Reform. The Beacon Hill Institute at Suffolk University applies state-of-the-art economic methods to the analysis of current public policy issues.

-30-

Posted 11/25/97
Revised format: 09-Feb-2007 5:34 PM

©2000-2005 Beacon Hill Institute for Public Policy Research at Suffolk University, All Rights Reserved