US city orders up 'fast-food' tax

Bad for the waistline, good for Detroit's bottom line

Detroit is seeking to introduce a "fast food tax" in an effort to curb the US city's expanding financial waistline.

Plans by Detroit's Mayor would see customers at McDonald's and other outlets pay a little extra for their burgers, pizzas and hot dogs.

The move is designed to slim down Detroit's huge budget deficit and also tackle its growing problem of obesity.

Critics have dubbed the proposal a 'fat tax', claiming it would unfairly penalise the poor.

Twin problems

The tax is the brainchild of Mayor Kwame Kilpatrick who is seeking solutions to the twin problems of an expanding gulf in the city's finances and an increasingly obese workforce.

Detroit's city council has a deficit of more than $300m (£159m) and faces restrictions on the amount of money it can raise through conventional income and property taxes.

The purpose of this is to generate revenue first and foremost James Canning, Office of the Mayor of Detroit

Detroit also has a problem with its weight, health experts say. Men's Health magazine labelled it America's fattest city in 2004.

Mayor Kilpatrick's office told the BBC that the proposal was a tax raising measure and was not designed to influence people's eating habits.

"We always hope that Detroit citizens will become a little bit healthier in one way or another," said James Canning, a spokesman for Mayor Kilpatrick.

"However, the purpose of this is to generate revenue first and foremost."

Up-front cost

Mr Canning added that the Mayor also supported efforts to promote a healthier lifestyle by encouraging people to take more exercise.

The Mayor has not yet defined what constitutes a fast-food restaurant although his spokesman said it was likely to include any outlet where people pay for their food in advance.

The 2% tax - which would be levied on top of the state's existing 6% restaurant tax - will add about nickel or about 2.5p to the cost of a $2.50 burger.

Opponents claim the measure - which will raise $17m a year - will discriminate against lower income groups, who most regularly eat at fast-food outlets.

The proposal will have to be approved by the state legislature and by Detroit inhabitants in a referendum before it becomes law.

Anger

Nevertheless, restaurant owners have responded angrily to the proposal.

"We think it is 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'", Andy Deloney, from the Michigan Restaurant Association, told the Associated Press.

Detroit isn't the only city to look to the tax system to tackle obesity.

A member of the New York state congress has argued for a 1% tax on junk-food and TV commercials to finance an anti-obesity drive.