Food has traditionally been exempt from the sales tax because it is a necessity and adding to the cost of it would hit the poor particularly hard. So the state taxes food consumed at a restaurant and not food taken out, presumably to be consumed at home.
But economists question whether a mochaccino is a necessity. Same with an artisan goat cheese pizza purchased at a gourmet food shop.
One proposal the administration is exploring would lift the tax exemption on such takeout foods, raising as much as $750 million. Steven Sheffrin, a professor of economics at UC Davis, says that may be easier said than done; the question is where to draw the line.
He cites an old tax rule in New York that classified doughnuts as tax-exempt only if they were beyond a certain size. Tax officials presumed that at that point, they were too large to consume in one sitting in a restaurant.
Jessica Cho, owner of Coffee & U in Koreatown, is less concerned with bringing fairness to the tax code than with keeping her shop open. She says taxing takeout beverages is a lousy idea.
"The economy is bad," she said Friday afternoon in her cafe, whose brown suede lounge chairs sat empty.
"My business is very, very slow, and there's already too many taxes -- sales tax, business tax, taxes everywhere. I may give up my store."
Cho said that since she opened in January, many other stores have closed in the area and her business has lost about $4,000 each month. Next month, she may shutter the place. "It's a bad idea," she said of the tax.
At the Grove, movie patrons expressed shock at the thought of ticket prices rising.
"For people who don't have very much money, it is a luxury to come to a cinema," said Frankie Gillard, 43, a production manager from West Hollywood, as she exited a showing of "Iron Man." "To tax it is insane. They should raise the taxes on people who are the most wealthy, not the people who make less than $50,000."
Giuseppe Restreppo, 20, who works at the theater's customer service counter, expressed dismay that prices could go up.
Still, Restreppo said he's amazed at how many people go to the movies at already high prices -- as much as $12.75 on Saturday night.
"We still have thousands of people come here," he said. "I don't think it will matter."
In West L.A., personal trainer Jennifer Matthews, 29, said that adding to the cost of sessions could affect her business.
