Do Not Disturb
TIME FOR A BUSINESS-
TRAVEL TEA PARTY
BY MICHAEL MATTHEWS
May 11, 2006 -- Two hundred and 30 years ago yesterday, the British Parliament passed the Tea Act, which, several months later, led to the Boston Tea Party.
As a business traveler, I think it may be time for another tea party.
Why? Business travelers are being targeted with taxes on hotels and car rentals that put the Tea Act's three-pence-a-pound levy to bureaucratic shame.
If you are a city or town or a county that wants more money in its coffers to, say, build a football stadium, it's easy. Just levy a tax on the poor business traveler or tourist. The fact that travelers, as the taxpayers, will never see the benefits of all that tax revenue has nothing to do with it. Just tax the visitors. They have to come anyway. That's the general thinking among revenue-ravenous local legislators. Besides, taxing the visitor won't annoy the local inhabitants and it's easier to get through the city council.
Of course, that's what my British forebearers thought when they started taxing tea headed from the East India Company to America.
It was wrong then and taxing visitors now to fund a stadium is wrong, too.
What leads me to this week's screed is a close examination of my hotel bill after a recent stay in New York City. Let's look at what the bagman collected:
· 4.375 percent for the New York State Room Occupancy Tax;
· 5 percent for the New York City Tax;
· 4 percent for the New York City Room Tax;
· a $1.50 Hotel Unit Fee; and
· a $2.00 New York Occupancy Tax.
Just what is a Hotel Unit Fee anyway?
I am not a mathematician, but a back-of-the-envelope calculation reveals a startling statistic. With 45,000,000 visitors a year staying an average of, say, two nights at $300 a night, New York City Mayor Michael Bloomberg pulls in almost $3 billion in room taxes annually from the hapless visitor to the Big Apple.
What do we get for our $3 billion? Cab drivers who don't know where the Empire State Building is? The right to pay $30 for a room-service continental breakfast? And, on top of that, New York State takes an additional 4.375 percent in taxes.
And New York isn't necessarily the worst offender in the travel-tax arena. Anaheim's room tax is 15 percent and a $3 fee. It's 19 percent in Houston. Or try this: If you rent a $209-a-night room in Detroit, your bill will actually be $244.53. That's $35.53 a night in taxes. Car-rental taxes are even worse. According to a Travelocity.com survey last year, the average tax burden on a rental car is 25.8 percent!
I say it's wrong. Certainly a nominal tax on tourists would be fair, but the horrendous tax burden imposed on the hapless business traveler does nothing to encourage tourism or visitor arrivals. And travel taxes are skyrocketing around the country and, for that matter, around the world. This sock-it-to-the-tourist attitude is despicable.
When that awful man, Jerry Jones, told the city of Irving, Texas, that he was pulling his football team, the aptly named Cowboys, out of Irving's Texas Stadium, the powers that be in Dallas City Hall did their best to woo Jones. But who would pay for the new stadium that Dallas would have to build for the Cowboys?
Easy, said Dallas city fathers. They would simply increase the room tax, the car-rental tax and a bundle of other travel taxes. Thankfully, the Dallas Hotel Association (DHA) and other rational citizens of Dallas made a valid case that it was unfair to tax the visitor further and it would hurt DHA members financially when visitor arrivals declined.
Not willing to tax Dallas residents for the "privilege" of hosting the Cowboys, the Dallas bureaucrats threw in the towel. The new stadium for the Cowboys will now be built in Arlington, a tiny suburb between Dallas and Fort Worth. What benefits Arlington will gain by having the team there is a mystery. They won't even be called the Arlington Cowboys. But at least it was a victory for visitors to Dallas, who won't be paying higher taxes to fund the outrageous salaries that Jerry Jones pays to Cowboys coach Bill Parcells and tainted newcomers like wide receiver Terrell Owens.
Sadly, except for the isolated victory in Dallas--where a $229-a-night room already costs $263.35 when taxes are added and car-rental levies at Dallas/Fort Worth Airport inflate the base rate by 60 percent--there is not much you and I can do about travel taxes. We are visitors and we don't have a vote or a veto when some municipality decides to build itself a new stadium or auditorium.
But every time I pay my hotel bill and see the exorbitant taxes levied on me, I want to put the kettle on…
Will anybody join me for tea? It once worked in Boston.
This column originally appeared at joesentme.com.
Copyright © 1993-2006 by Michael Matthews. All rights reserved.