New Obamacare Tax Imposed by L.A. Restaurants on Customers

I guess the surcharge is not technically a new Obamacare tax because it is only imposed on those who patronize L.A. restaurants. But since these restaurants are trying to recoup losses imposed by Obamacare, it seems like a tax to me!

obamacare crash burn blimp

People want to know if Obamacare is hurting businesses. If L.A. restaurants need to add a three percent surcharge, then we can guess that the Affordable Care Act is costing businesses at least that much.

From Truth Revolt:

On Tuesday, LA Weekly reported that several upscale restaurants in the City of Angels will be adding a 3 percent surcharge to cover their employees healthcare costs, a trend that has been gaining steam since the Affordable Care Act launched nearly one year ago.

Beginning on September 1, restaurants Lucques, Tavern, A.O.C, and a few offshoots all added a 3 percent surcharge to customers’ checks, explicitly stating in a press release their decisions hinged on covering employee healthcare costs.

Lucques Group, Suzanne Goin and Caroline Styne, owners of the restaurants, also named several other restaurant groups that will be duplicating their efforts; Restaurants Rustic Canyon, The Hungry Cat and Melisse were among those mentioned.

I am sure all those restaurants are competing for customers. If they have to raise their prices (or, what amounts to the same thing, add a surcharge) then they must seriously need the extra revenue. Furthermore, they must be confident that their competitors will also have to gain new revenue by either also imposing the surcharge or by simply raising their food prices. Otherwise, those other restaurants would gain more of the customers in L.A. by keeping their prices lower.

But it also seems like another aspect of the Obama economy has made restaurants prefer the surcharge to simply raising the price of items on the menu. According to a press release:

The cost of offering these benefits is significant and the reality is that restaurants, particularly smaller restaurants like the ones many of us own, have a very high ratio of staff members to revenue and run on very slim profit margins. Successfully run restaurants generally make between 5-10% net profits so a health care benefit which eats away 3% of gross sales will take away anywhere from 30% to 50% of annual profits for a restaurant. We’ve discussed simply raising menu prices, but ultimately food prices are tied in many ways to the ingredients we purchase. Those ingredient costs have increased astronomically recently so we’re already struggling with working creatively to keep menu prices down and don’t feel it’s right to try to factor health care costs into menu prices as well. We’d rather keep our menu costs as an accurate reflection of our ingredient prices so that customers know that if we have to raise them it’s because we can’t avoid passing on our increased costs.

Let me translate: the price instability caused by the Federal Reserve’s quantitative easing scam has already played havoc with the menu prices. Factoring in the needed revenue to cover the health costs is simply too complicated now. The rising price of ingredients is not due to increased demand, like it is for butter. It is due to the Fed’s money printing.

Between inflation and Obamacare, the White House has “double tapped” the restaurant industry.