California’s Food Truck Shakedown

How state officials mistreat mobile food vendors

We would all laugh at a man who, sinking in millions of dollars in house payments, car loans, and credit card bills, decided to fix his problem by looking for spare quarters lurking behind the cushions of his sofas.

Likewise, we should shake our heads at the way the state of California—with a budget deficit approaching $16 billion and hundreds of billions of dollars in unfunded pension and retiree medical benefits—is stepping up tax collection to help plug a hole caused by its chronic overspending.

On Tuesday, I met in Santa Ana with about 12 owners of catering trucks—those mobile restaurants that sell mostly Mexican food—and they told a disturbing tale of how the state’s Orwellian-named tax agency, the Board of Equalization, is targeting and mistreating them. The people assembled in the room blamed state tax authorities more than the economy for their tough times.

The truck owners say the state is handing them tax bills for tens of thousands of dollars based on unrealistic estimates of their taxable sales. When you buy food at the trucks, the burrito and Mexican Coca-Cola (the kind with the real sugar, rather than the icky corn syrup) may cost, say, six bucks. That’s what you pay, as opposed to a restaurant where state tax would be added onto the transaction. The trucks don’t collect per-item tax, but owners later estimate their sales and send their money to the tax man.

The BOE, truck owners say, used to tax them based on realistic sales estimates and used to account for the fact that many of the items they sell are not taxable items. They say the BOE also used to work with them to make their tax bills and treat them respectfully. No more. Desperate for cash, state officials now make unrealistic estimates of their sales and employ heavy-handed tactics, they explain.

To make matters worse, the truck owners say that local police harass them—thanks in part to city officials that don’t like having the trucks around. Every city has different rules for placement of permits on the truck, and most of the owners report getting multiple citations for minor infractions. Each citation can cost $700, which can eat up days worth of taco sales.

The people in attendance spoke mostly Spanish, which was translated for me by Lou Correa, the Santa Ana state senator who organized the group at my request. I promised to quote only the first names of the attendees because of their fear of retribution from the authorities.

“It reaches the point where you have to think about your health,” said Vernonica. “They filed lawsuits against me. They said they would charge me as a criminal in court. I’m out of business. I sold my truck. There are people out there who get government aid who are driving brand new cars. They come after a person like me who is not asking for anything. As long as I have two feet and two hands, I want to work.”

Officials suggested to one truck owner that he go down to the welfare office for benefits. That’s just like California these days—hard-working people are ill treated, but there are plenty of benefits available for those who prefer to live on the dole.

Many told stories of long waits, complicated audits, confusing instructions, unhelpful officials, of bureaucratic indifference. Then BOE reports them to the IRS, they say, which triggers a federal audit. Those who work other jobs have their wages garnished to pay the state.

“We were paying an acceptable amount, and then the state needed more money,” said Gilberto. He told me that this is a group of mom-and-pop business owners that cannot afford attorneys and accountants.

I talked to the Board of Equalization’s Michelle Steel, the elected official who represents Orange County, and she promised to pull the records of the taco truck owners and see what can be done to help them.

At the gathering in Santa Ana, one man blurted out the word “pensions.” Everyone laughed. In English or Spanish, these business owners understood that the state is shaking them down to come up with money to pay for its lavish overspending, on programs including six-figure pensions for government employees.

The state Capitol is controlled by liberal Democrats, who frequently invoke the poor, working-class people and immigrants to justify their latest government spending ideas. Yet here is the latest example of how these officials put the demands of the well-paid and powerful unions over the needs of hard-strapped immigrants and working people.

State officials refuse to tackle the pension debt or rein in public spending. Indeed, they are busy spending more on fanciful projects such as high-speed rail. Yet the state has no money. This is the end result of an infantile progressive movement that refuses to make hard choices, always blames the private sector and figures that higher taxes will solve every problem.

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  • Whiterun Guard||

    I love California. But if I depended on a catering truck for my living, I’d fill it up with my belongings and drive to Nevada.

    You're part of the problem! If everyone just did their fair share we wouldn't have to extort money from these mother truckers.

    I bet they'll still vote democrat. 'Course they'll have to now, since they'll be without income.

  • Hyperion||

    I bet they'll still vote democrat. 'Course they'll have to now, since they'll be without income.

    See, their plan really is working. At least until they run out of ALL of other peoples money.

  • Tulpa the White||

    When you buy food at the trucks, the burrito and Mexican Coca-Cola (the kind with the real sugar, rather than the icky corn syrup) may cost, say, six bucks. That’s what you pay, as opposed to a restaurant where state tax would be added onto the transaction. The trucks don’t collect per-item tax, but owners later estimate their sales and send their money to the tax man.

    If they're being that sloppy they're begging to be molested by the state. It's not right and not fair, but it's also not hard to avoid that. Price your items so that when sales tax is added it comes out to an even amount, then record it. It's not rocket science.

  • EDG reppin' LBC||

    Yeah, I agree. If the cost of accounting and legal services is too much for each individual truck, they should form a consortium and hire services for the consortium. I am assuming that these entrepreneurs are immigrants, or at least not strong English speakers. They need to better learn the maze of government.

    I'm sorry the State is coming at them hard, but they really should get good accounting/legal representation. Without it, they will get steamrolled.

  • Bardas Phocas||

    They need to better learn the maze of government.

    What a soul crushing statement.
    Filthy outsiders. Learn the secret ways of the State and riches and tits are yours. Fail, and you will be eating mealy government cheese in California.

  • EDG reppin' LBC||

    What a soul crushing statement.

    It totally sucks, I agree. But there is an abundance of wealth pie in California, and these entrepreneurs should try to get their piece. Reality is, part of getting that piece is shooing the government flies away. Honest, professional accounting/legal services will go along way in swatting those flies. I can recommend excellent accounting and law firms here in Long Beach.

  • R C Dean||

    And those firms are affordable on a taco truck income?

  • EDG reppin' LBC||

    The individual trucks could organize as an S corp or LLC, and pool resources. Again, I would prefer the State get it's fucking nose out of these people's business. But reality is, they won't. So in the meantime, the truck owners should use the tools that are available to them to fight the menace of the State.

  • R C Dean||

    One of those tools, of course, is the truck's inherent mobility, which I am sure will carry it to friendlier climes.

  • EDG reppin' LBC||

    It's a conundrum. You can leave to a better business environment, say Des Moines, IA. But your market, and revenues, are way smaller. Stay in Orange County because there is so much moolah to be made, but it's difficult to extract.

  • Tulpa the White||

    And this is the part of the show where RC learns that it's easier to argue with the strawman. If he didn't know already.

  • Scooby||

    You would be the expert to consult on that subject, Tulpa.

  • Bill Dalasio||

    Why am I inclined to think that the ability to "swat government flies" doesn't have an incredibly high correlation with the ability to prepare a really tasty lunch for $6.

  • SIV||

    If the cost of accounting and legal services is too much for each individual truck, they should form a consortium and hire services for the consortium.

    There goes the $6 lunches.
    I disagree completely. Assuming they are reporting realistic figures it should be up to the state to prove they are evading sales taxes. Put a bureaucrat outside each truck with a calculator and compare his figures to the owners' reported sales.

  • Pro Libertate||

    You'd think there would be an exemption for businesses below a certain sales threshold. Like with other regulatory requirements, the burden of compliance can get heavy for small businesses.

    I think they could fairly easily comply in this instance, but as a general matter, I think smaller businesses get the shaft from all layers of government.

  • Tulpa the White||

    You'd think there would be an exemption for businesses below a certain sales threshold.

    There are some food trucks that have tons of sales; they may not fall below that threshold unless you make it ridiculously high.

  • Brian D||

    You'd think there would be an exemption for businesses below a certain sales threshold.

    There is because it's good PR to have one, but if any businesses are below the threshold it's a clear indicator that the threshold needs to be lower.

    sin,
    government leech

  • Bryan C||

    "Like with other regulatory requirements, the burden of compliance can get heavy for small businesses."

    Well, yeah. That's the point. Big businesses pay good money for those regulations. Every small business that can't cope is one less potential competitor.

  • R C Dean||

    This probably comes up with cash-only businesses that don't generate documentation for each sale. Other than requiring them to document each sale, I don't see a good way to get an exact, or even auditable, number.

  • ||

    I agree. Employing antics like forming a consortium is just playing into their fuckin hands.

  • Tulpa the White||

    I'm not talking about hiring an accountant, I'm talking about WRITING DOWN HOW MUCH OF EACH ITEM YOU SELL. You know, what a sane businessperson does anyway, if only to keep track of where they're losing money. It's not like the food trucks have such a vast array of stuff they sell that it would be that difficult.

  • Bill Dalasio||

    No offense, but, it's not clear from the article that they don't already do that. My guess is that these figures are what is being called an estimate. Tax authorities generally look for documentation when something isn't called an estimate.

  • robc||

    I agree with Tulpa on this (I think the first time we agreed on anything food truck related), but I think you might be right too, and Tulpa is using his definition of "estimated" which may vary from the CA definition.

  • Tulpa the White||

    And here we go with the redefining words again.

    There is no meaning of the word "estimate" that would apply to a careful record of every sale that actually happened.

    Indeed, in the article we have

    Desperate for cash, state officials now make unrealistic estimates of their sales and employ heavy-handed tactics, they explain.

    How in HELL could they be talking about actual records of sales as "unrealistic"?

  • R C Dean||

    I'm not talking about hiring an accountant, I'm talking about WRITING DOWN HOW MUCH OF EACH ITEM YOU SELL.

    Even if you do that, how is that a solid, auditable paper trail? Why would that protect you from some government drone who thinks he knows better?

    I'll tell you: It wouldn't. Somebody who can write down a daily tally of 20 tacos in real time, can write down a bunch of daily tallies of 10 tacos at the end of the year.

  • Tulpa the White||

    It would be more foolproof than what they're doing now. Don't make the perfect the enemy of the good.

  • robc||

    Its not even necessarily that hard. I dont know what the CA form looks like, but the KY tax form starts on line 1 with "Total revenue including sales tax collected".

    And you back figure the 6% from there.

    So, take total receipts and divide by 1.06 (adjust for different sales tax rate). Problem solved.

    Even Tulpa can teach math that simple.

  • Tulpa the White||

    I mean, would they allow a brick and mortar restaurant to just "estimate" their sales at the end of the year and expect the state to take it on faith that that is the true sales tax amount? No. So I don't see how this is discriminatory at all. Sounds like the food trucks were getting a sweet deal before.

  • Paul.||

    Sounds like the food trucks were getting a sweet deal before.

    And as we know, no one gets a sweet deal in California!

  • Hyperion||

    So instead the state will drive them out of business so that they have to rely on state assistance to live. Such a great idea that only those as wise as bureaucrats could think of it

  • Tulpa the White||

    If you sell an eggroll, write down "1 eggroll, 85 cent". Pretty sure they do that in China too.

  • robc||

    Or just fucking count your money at the end of the day.

    We started with $50 in cash drawer, now we have $583. We sold $533 today.

  • R C Dean||

    I mean, would they allow a brick and mortar restaurant to just "estimate" their sales at the end of the year and expect the state to take it on faith that that is the true sales tax amount? No.

    Has "estimating" only been allowed for food trucks in the past, and not for anyone else? Until we know whether ByM establishments are barred from estimating, or whether they have been getting shakedowns as well, I wouldn't assume anything.

  • Brett L||

    I assume it is more like how waiters are allowed to "estimate" tips received in cash. It is called an estimate not because they are not to report the exact number, but because there is no way to document such transactions. I mean, I can show you register tape, but what does that actually have to do with what came and went through the business? I imagine brick mortar restaurants are also allowed to "estimate" cash sales.

    Although, my experience is that with those smart phone CC scanners, food trucks and pretty much all other previously cash-only businesses are moving towards a cash/card distribution closer to BM restaurants.

  • Tulpa the White||

    The state can audit your business at any time, and you probably can guess how that's going to go if you just shrug your shoulders and say it's about right. If you have standard procedures for ringing stuff up/documenting sales you're probably OK because you have extensive records and they can ask employees if stuff is being sold under the table.

    They probably thought the food trucks weren't worth going after before, and as always, people like to be lazy (and possibly dishonest -- I see no reason to think that just because someone serves cold dim sum from a rusty truck that he's beyond reproach).

  • Aresen||

    Of course, as a totally off-the-wall and ridiculous proposal, how about just lowering the taxes on everybody, including storefront businesses?

    I realize this is a crazy proposal - not one for SERIOUS PEOPLE to consider - but I just thought I'd throw it out there.

  • ||

    Sounds like the food trucks were getting a sweet deal before.

    How far we've fallen that being able to engage in commerce and earn a living unmolested means you're somehow "getting a sweet deal."

  • VG Zaytsev||

    I mean, would they allow a brick and mortar restaurant to just "estimate" their sales at the end of the year and expect the state to take it on faith that that is the true sales tax amount?

    It's very straight forward for BoE auditors to compare the reported sales to actual deposits in the business checking accounts.

    So they are basically accusing the operators of skimming cash, ie not reporting it as business income at all.

    Which may be happening, but I don't know how the BoE can prove that or even what there basis for suspicion is.

    The bonus for the food truck operators is that if the BoE extracts money in that case, the Franchise Tax Board and IRS will be along soon looking for their share too.

  • Tulpa the White||

    It's very straight forward for BoE auditors to compare the reported sales to actual deposits in the business checking accounts.

    I don't see any reason to think the deposits would match the sales. It may be that a lot of the truck operators are using the revenue from the truck to pay immediate expenses without going through a bank first (and may not have a business checking acct anyway).

  • Bill Dalasio||

    But, Tulpa, you're citing a lot of the reason many of us are skeptical of your placing responsibility on the truck owners. How can they document all this stuff.

  • VG Zaytsev||

    If they are sole props and operating on a purely cash basis it will be extremely hard to prove anything, and the enforcement costs will surely be more than any revenue collected.

    Maybe they are trying to terrorize others into voluntary compliance, but that is likely to fail with micro sized businesses.

    So it's a lose-lose-lose for the state but a a jobs program for bureaucrats.

  • sailshonan||

    Except that the state wouldn't accept a sales ticket that read "one eggroll, 85 cent." In Florida, restaurants must submit all their source documents. This includes the register receipts, and invoices, and if needed, the actual original dining ticket (you know, in small businesses, the carbon copy, blue-green ticket that your server writes on. Of course, restaurants use these not just for the tax man, but for internal control reasons as well.) But you must also have your invoices for purchases, to establish an audit trail for the state. This is not a simple math problem. This involves instituting a system of internal controal (simple as it may be) and also reconciling the receipts at the end of the period. Also, restaurants are inventoriable by state auditors, so your inventory counts better be within tolerable misstatement.

  • sarcasmic||

    I've got an idea! Let's hassle the food trucks until they sell or move out of state! That'll create jobs and raise tax revenue!

    /typical government retard

  • Hyperion||

    It's the Cali way. It's the Dem way. California rest in peace...

  • Hyperion||

    I once worked for a manufacturing company whose owner would obsess over the cost of things like office supplies and how much paper towels were being used in the restrooms, while millions of dollars worth of scrap sat in recycle dumpsters out back because he wouldn't pay enough to keep skilled engineers and maintenance people. There would be entire days that nothing but scrap was produced. Needless to say, that company is long since out of business.

  • Hyperion||

    Oddly enough, when I was thinking of all that metallic scrap, this image of a high speed rail was flashing into the scene...

  • sarcasmic||

    Penny wise and pound foolish.

  • sailshonan||

    I'm surprised the employees didn't start selling the scrap and pocketing the profit.

  • SugarFree||

    You got to give Daddy his cut. You don't give Daddy his cut, he gonna haveta hurt you. Daddy don't want to haveta hurt you, but he gotta have his cut. Daddy knows what's good for you, bottom bitch.

  • Pro Libertate||

    You know, just thinking about it, there's something really odd about the idea of a sales tax. Why does the government have the right to tax commercial transactions? Seriously?

    I can see the logic around some taxes, but that's one that really escapes me.

  • Anonymous Coward||

    The government has as much of a "right" (which is to say it doesn't, as governments don't have rights, it has powers. Pedantic moment over.) to tax your buying and selling as it does anything else you do. However, the sales tax is more equitable and easier to avoid than, say, the personal property tax, the income tax, the excise tax, etc.

  • Pro Libertate||

    I hear you, but I think a fundamental flaw in our system is the very invasive powers of state and local governments, which have general police powers and broad tax authority. I know the government needs revenue, and I know taxing income and, worse yet, property has it's own problems, but there's something really wrong with the idea of the government getting a piece of purely private transactions. And it certainly has a negative economic effect.

  • ¿Ex Nihilo?||

    It is also easier for the state to use each business as a tax collector, more efficient for them. It also keeps a money stream going to the state, rather than when property taxes are paid.

  • SIV||

    Ask Gay Jay and the LP why they support the "fair tax".

  • Aresen||

    I think you are very close to the mark, Pro Lib, but the underlying problem is that it is impossible to create a tax system that is "fair".

    Even if you accept the necessity of some form of taxation, you are still faced with the problem of those who evade the tax via loopholes or outright refusal to pay. If you try to close the loopholes, you usually wind up creating more loopholes in the process. And the more power you give to your collectors to enforce payment from evaders, the more likely that power will be abused.

  • Pro Libertate||

    Maybe we should give up taxation altogether and just let the government fund everything by printing money.

  • Aresen||

    I realize you are joking, but:

    a) Isn't that what governments have been doing for the last 100 yeasrs?
    b) Debasing the currency is a tax on saving.

  • Pro Libertate||

    I was joking.

  • robc||

    I know you were joking, but in some ways it isnt a bad idea (in others, it is horrible). Its a nonregressive tax as it devalues everyone's money equally.

    And no forms to fill out or anything. And the budget can always be balanced, as they print exactly what they need.

    No sin taxes, no excise taxes, no property taxes or sales taxes or income taxes. The government just devalues money to buy stuff.

    I think its pretty much what most of the crowns of Europe did for a long time.

  • R C Dean||

    Its a nonregressive tax as it devalues everyone's money equally.

    Actually, its a tax on savings that falls mostly on lenders and results in a windfall to borrowers. It distorts the hell out of the capital markets.

  • ||

    I vote for a lottery. That way tax payments are voluntary. That in combination with user fees for services like water and toll booths for road use.

  • robc||

    the very invasive powers of state and local governments

    Its like they are completely ignoring the emanations and penumbras that led to a right to privacy.

  • ¿Ex Nihilo?||

    Why does the government have the right to tax commercial transactions?

    Because, fuck you, that's why. Other than that, no idea.

  • Brett L||

    SLD, this is not the only or even the best way to do it, but I could justify it thusly: They do provide the forum for resolving differences of opinion on whether or not parties to commercial transactions have upheld the terms of the transactions. They also provide the force necessary to put or keep parties in compliance, as well as the force to arrest fraudsters and protect from thieves.

    Again, whether this is the best system or whether the government keeps their end of the bargain or whether the government charges a "fair" price for these services is beyond the scope of my argument.

  • sarcasmic||

    “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it”
    ― Frederic Bastiat

    Why do they tax commercial transactions?
    Because money is changing hands and they want some of it.
    That's all.

  • Pro Libertate||

    Yes, that's the real answer. Accepting a minarchist government, what would be the best and most legitimate way to fund it? I suppose we could pay directly for government services, making it more of a use tax, but I'm not sure how easy that would be in anything like a system like we have today.

    It occurs to me that a possible missed opportunity in federalism was to have the states be solely in charge of all tax collection.

  • Brett L||

    Didn't they try that under the Confederation?

  • Pro Libertate||

    It's hard to compare, as there was barely a national government at all in the Confederation.

  • Tulpa the White||

    Unimproved land tax, gas tax or some other use tax for roads, along with fines for lawbreakers would probably be best.

    I'm not really a fan of sales tax as it's horribly regressive (and attempts to make it less so always lead to picking winners and losers).

  • robc||

    Ugh, Tulpa and I are in agreement again.

    use tax gas tax, as I might use gas for off-roading, and that would make it an immoral tax.

  • robc||

    There were 3 greater than signs between use tax and gas tax.

  • Bill Dalasio||

    Theoretically, a contract tax would be ideal. You don't have to pay it, but otherwise the contract would not be legally binding.

  • robc||

    what would be the best and most legitimate way to fund it?

    Single Land Tax.

    Only morally acceptable tax, IMO.

  • R C Dean||

    Unless its voluntary, it entails the use and threat of force, which renders it pretty much ipso facto immoral, no?

  • Tulpa the White||

    Only if you're a natural law nutjob.

  • Paul.||

    You know, just thinking about it, there's something really odd about the idea of a sales tax. Why does the government have the right to tax commercial transactions? Seriously?

    I can see the logic around some taxes, but that's one that really escapes me.

    Gonna have to disagree with you here.

    It's "income tax" that is dubious and ultimately immoral.

    While one can scrutinize the logic of any tax and find dubious elements, a sales tax is the best of a bad lot.

    Income tax always ends up down the rabbit hole of defining "income" which gets us all kinds of perversions as defining favors and free services as "income".

    Plus, it requires the government to know how you make your living. That, in my opinion, leads to all kinds of government shenanigans.

    There are some reasonable arguments which can call a sales tax into question as well, but none of them are as dubious or problematic as the concept of an income tax.

    Give me a sales tax any day, and remove my income tax, and I'm a happier man.

  • sarcasmic||

    In my opinion the only justifiable tax is the tariff, which I view as a fee for crossing borders that are maintained by the government.
    Then again I support free trade.
    Color me conflicted.

  • Paul.||

    I'm going to be careful to make a very fine separation between "justifiable" and "fair".

    Taxes are a form of force and so an argument can be made that by definition, no tax is justifiable. But that's a theoretical beat I don't want to walk.

    But if you're going to accept taxes of a form, or a few limited forms, the sales tax is as close to 'good' as you can get.

    Rich people pay a lot more because they buy more. Poor people pay considerably less, in measure of percentage and amount because they buy less and only buy certain goods.

    They can be made non-regressive the same way municipalities and states make them non-regressive now: Don't tax unprepared foodstuffs, staples like diapers, baby formula etc. Ie, it is tweakable to soften regression. It keeps the government out of its subjects business in how they make their living. How or what you pay me to do my job, or what benefits you bestow upon me, monetary or non is none of the governments business. Period.

    The sales tax is difficult to avoid in a mainstream, industrialized economy. The drug dealer, the prostitute, an illegal alien, the thief will all eventually buy a cup of coffee, a pack of cigarettes, fill a tank of gas- so they'll pay some taxes and contribute to the system.

  • sarcasmic||

    I oppose sales taxes because it turns the vendor into a tax collector. Same with income tax.

    Taxes should be collected directly by agents of the state, not by a middle man.

    Not only that, but they should not be hidden.

    Sales tax is hidden in the final price.
    Income tax is deducted from the paycheck.

    If people had to save up and pay their income tax quarterly, instead of having it deducted from their paychecks, this country would be in a full scale revolt.

  • Paul.||

    If people had to save up and pay their income tax quarterly, instead of having it deducted from their paychecks, this country would be in a full scale revolt.

    So you see why income taxes are the more evil of the two?

    Sales tax is less hidden. When I purchase an item, I know how much is about to be added and am reminded every time I go to the register.

  • ||

    I don't agree with efforts to make it non-regressive. That just gets you into the same problems with cronyism that we see today. Choosing items to exempt from the tax would be completely arbitrary.

  • Pro Libertate||

    I wasn't saying that the income tax was good. Or even better. I just have a visceral reaction to this idea. The income tax is similarly "How is the government's business?"

  • Paul.||

    *shrug*

    I can't say. I have a problem with property taxes because you end up paying the government rent, and therefore you never "own" your property.

    I still posit that the sales tax is the lesser of a lot of weevils.

  • Pro Libertate||

    No, I agree, property tax is gloriously offensive.

  • VG Zaytsev||

    While one can scrutinize the logic of any tax and find dubious elements, a sales tax is the best of a bad lot.

    How so?

    Income tax at the personal level for most people is just a sales tax on your labor.

  • sarcasmic||

    The sales tax puts the burden of tax collection onto the vendor.
    Essentially it conscripts anyone who sells things into a tax collector for the state.

  • sarcasmic||

    Of course income tax does the same thing, conscripting the employer into being a tax collector for its employees.

  • R C Dean||

    Worse than that: it conscripts everybody who earns anything into being their own tax collector.

  • Paul.||

    I beat you at 1:29. Finally, I'm first on Hit (ampersand) Run.

  • sarcasmic||

    If you were your own tax collector then you would have to set aside some of your income yourself, as opposed to your employer deducting it from your paycheck, and write checks to the government.

  • Paul.||

    If you were your own tax collector then you would have to set aside some of your income yourself, as opposed to your employer deducting it from your paycheck, and write checks to the government.

    You DO have to set aside some of your income for yourself.

    While I will admit that not many of us fall into this category, the reality is that the concept is very real.

    If you receive non-monetary benefits from any source, and the value of those benefits (defined by whom?) reaches a certain threshhold, you must voluntarily provide that information to the government and then pay a percentage of that as income tax in real dollars. If you fail to set aside those monies before or as you're receiving this non-monetary compensation, you'll be in default.

  • Paul.||

    While I will admit that not many of us fall into this category, the reality is that the concept is very real.

    *scratches head*

    I'm working while debating. Never a good combination.

  • VG Zaytsev||

    If you were your own tax collector then you would have to set aside some of your income yourself, as opposed to your employer deducting it from your paycheck, and write checks to the government.

    Which as a merchant I do have to do.

    The I also right more checks to the government based on my profit and more checks to the government based on the labor that I sell to myself.

    A sales tax looks good if your not a commercial seller because it's relatively hassle free. But that's no different than saying a capital gains tax isn't bad if you never have capital gains.

  • Paul.||

    How so?

    Income tax at the personal level for most people is just a sales tax on your labor.

    REad my post above.

    Income tax is a kind of sales tax on your labor, but because it taxes income, it's forced to define "income", and therefore taxes "things of value".

    If you're not paying me in money, the government is then forced to put a price tag on those "things of value" and then comes after me for a percentage of an arbitrary value they placed upon my compensation.

    If you give me a house, the government calls that "income" and comes after me for $25,000 (to make up a number) in taxes. That's real money I have to pay the government, even though you gave me something that wasn't legal tender.

    The sales tax puts the burden of tax collection onto the vendor.
    Essentially it conscripts anyone who sells things into a tax collector for the state.

    Sarcasmic:

    This is true, however, it's a system we already have...right now and it's a fairly straightforward system. And as you note, the income tax already does this writ large. And in fact, forces you to be a tax collector for yourself.

  • VG Zaytsev||

    This is true, however, it's a system we already have...right now and it's a fairly straightforward system. And as you note, the income tax already does this writ large. And in fact, forces you to be a tax collector for yourself.

    The distinction vanishes for the vendor.

  • Tulpa the White||

    Sales tax has loopholes too....it's all in the question of what's taxable and what's not (which varies from jurisdiction to jurisdiction and day to day in some places).

  • Paul.||

    All taxes have loopholes. However, the sales tax is not some bold, new frontier. We have one now, it's been in place and functions quite well. The income tax, on the other hand, is an unholy (ha!) mess that has unfairness built in.

    For instance, when people demand that the Estate tax be eliminated or reduced, they're essentially asking for an income tax loophole.

    If you receive something of value from someone else-- even as a gift, it's income. And if you can't pay the dollars and cents in taxes on that stuff, you have to sell it.

    This is why families of modest means who receive something of great value such as a rare piece of art are not allowed to keep it. They have to sell it just to pay the taxes on it. Which then deprives them of the chance to dispose of the item as they see fit.

    Income tax is like eminent domain for personal property.

  • robc||

    Single Land Tax is the only morally acceptable tax.

  • John C. Randolph||

    Why does the government have the right to tax commercial transactions?

    It doesn't. It has usurped the power to do so, because back when they started the routine shakedown of innocent business owners, the people failed to apply tar and feathers as necessary to deter future usurpations.

    -jcr

  • Dr. Kenneth Noisewater||

    Why does the government have the right to tax commercial transactions? Seriously?

    Because they have the guns?

  • Anonymous Coward||

    The state Capitol is controlled by liberal Democrats, who frequently invoke the poor, working-class people and immigrants to justify their latest government spending ideas.

    Yes, they do because that's where they mean for those same people to stay. If you aren't poor, working hard and ekeing out a living day-to-day, paycheck-to-paycheck, the public tit, and all of the waste that comes with it, becomes less attractive.

  • Pro Libertate||

    Out here in the streets,
    I fight for my meats,
    I give my tax just from living.
    I don't need to fight
    To prove I'm right.
    I don't need to be forgiven.

    Don't cry,
    Don't raise your eye.
    It's only a food truck shakedown.

    Patron, take my hand.
    Travel south crossland.
    Put out the fire,
    Don't look past my frier.
    The exodus is here,
    The happy ones are near.
    Let's get together
    Before we get hungrier.

    Food truck shakedown,
    It's only a food truck shakedown.
    Food truck shakedown,
    Oh, oh,
    Food truck shakedown.
    They're all shakin'!

  • Ken Shultz||

    In some places, the food trucks are so good, they've built like food truck malls, where people can come sample different food trucks for lunch and dinner.

    And now they're adding a beer garden.

    http://www.somastreatfoodpark.com/

  • Brett L||

    Tallahassee has a regular friday night get together in the lot behind what used to be a Coca-Cola bottling plant. 5-6 food trucks, live music and a beer/wine bar.

  • Whiterun Guard||

    Yeah but the live music is a Creed tribute band, so I'd rather die than eat there.

  • Ken Shultz||

    a Creed tribute band?

    There's no such thing.

    That's unpossible.

  • Brett L||

    Oooh. Burn. I've not heard Candy Lee. Tomorrow the same venue (sans foodtrucks) is showing a Sonny Chiba double feature. I think they should show True Romance afterwards.

  • Ken Shultz||

    Nice!

    The pursuit of great food and drink--it should have been in the Bill of Rights.

    I say it's under the 9th Amendment.

  • Brett L||

    Shit, I fucked the link. (Won't call it SF'd, because I do it more than him now.) Trying again

  • Ken Shultz||

    The food trucks have twitter pages so you can follow where your favorite truck is going to be--and what's on the menu that day.

    Every downtown area needs one of these places--a place with ten independent chefs, who trade out regularly every day? Menu always changing?

    Where are my keys?

  • ||

    We haz Food Truck Fiesta, so you don't have to follow a shitload of Twitter feeds.

    There are also little truck festivals like Trucko de Mayo and Truckaroo.

    Who knew DC would lead the nation in food truck culture?

  • Ken Shultz||

    In San Francisco (where I don't live by the way), I suspect it has something to do with the high rents.

    Buying or leasing a truck has got to be a lot less expensive than renting restaurant space anywhere in South of Market.

    In DC? Hell, I grew up outside of DC, I bet it's probably driven by the horrific traffic there? ...my guess anyway. Traffic is still a nightmare in DC, right?

    If you only have an hour for lunch, and you're in DC, so you can't drive anywhere that serves great food in an hour and get back in time (or find parking)? Then you're stuck with either fast food, pizza delivery or whatever's in walking distance.

    ...or an awesome food truck!

    I imagine the local restaurants hate food trucks.

  • ant1sthenes||

    Why don't they just have their customers order from a computer at the truck that connects to an office in Nevada? The food truck would just be a "delivery" service. Of course, their customers would have to pay a use tax, which I'm sure they would be honest enough to do.

  • Adamson||

    Hell, my county bans food trucks entirely. I'm SOL.

  • Loki||

    an infantile progressive movement that refuses to make hard choices, always blames the private sector and figures that higher taxes will solve every problem

    Nothing more need ever be said about the "progressive movement". This is it in a nutshell.

  • blackjack||

    I have experience with the Board of Evildoings as well. They used the same tactics on me. Repeated audits, imputed sales, info-mining from my suppliers, etc. In 2010, they started because, my sales "were down." I mentioned that the whole countries sales were down, but they were undaunted. Couple of appointments and a buncha threats later I closed for that and other reasons (like all of my government shakedown bills, fire dept, building and safety, carb, bar, etc, doubling and tripling.) The trucks are VICTIMS of the BOE, not absconders. I was under the impression that to-go food items were non taxable, anyway. Unless they snuck in a policy change in recently.

    Do not think that CA has simple easy to comply with regs like normal states. Sales tax returns are due monthly. I had 5 licenses, 4 separate tax returns to file (2 of them monthly) numerous annual inspections, each with an ever increasing accompanying fee, sign inspectors, undercover agents trying to get me to give them my used tires (*so they could fine me for improper disposal,) mandatory oil recycling and storage conditions (which made zero sense,) etc. I spent a huge amount of time, attempting to comply. The scheme is, basically, no one is in compliance so they can selectively enforce against anyone they choose. They mostly used to not care, but when their whole scam is almost broke, their selections are vastly more broad.

  • The Hammer||

    Steven, did you try to get comments from any of the BoE douchebags?

  • The Hammer||

    Steven, did you try to get comments from any of the BoE douchebags?

  • blackjack||

    "I talked to the Board of Equalization’s Michelle Steel, the elected official who represents Orange County, and she promised to pull the records of the taco truck owners and see what can be done to help them."

    Oh, you're writing a piece on taco trucks? Well let's pull their files and see if we can get them some special treatment! No, we won't be making any real changes that might make our system more equitable and just.

  • UWB AAB||

    About 20 years ago I worked in a CA tax preparers office helping Mom and Pop shops deal with sales/income taxes. The same stuff was happening back then: Mom and Pop run the business on a cash basis, using their wits to make a profit and keeping expense receipts in a shoebox. No records are kept of revenue (what idiot would do that?) Thus, sales revenue is always estimated on the low side to minimize taxes paid. The state BOE or FTB, as the case may be, when auditing the Mom and Pop prepares its own revenue estimate because the Mom and Pop estimate is not well-supported by the requisite paper trail and is obviously low compared to expenses. The state estimate is always initially very high. If the amount at stake is worth it, Mom and Pop hire an agent and usually the thugocrats negotiate the tax down to a more reasonable figure. Henceforth Mom and Pop exercise more care with record keeping on the revenue side and the amount of expenses/revenue reported. But Mom and Pop never report all of their cash income (I suspect), because what idiot would do that? Occasionally the thugocrats change the rules of the game, but the essence of the game remains pretty much the same, so long as the parasite is smart enough to keep the host alive and producing income.

  • blackjack||

    Mucho changes in the last twenty years. I had my first shop in '99, and it was easily a quarter of the headache, thugocrat wise. Back then there was no LA city tax, sales tax was quarterly, no tire tax, no "pressure vessel" compressor tax, ALL the fees were less than a quarter of current rates. Back then, I spent more time working on my shop than arguing with the thugs.

  • code_monkey_steve||

    "the state’s Orwellian-named tax agency, the Board of Equalization"

    "Randian", surely.

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