Mustard or ketchup? These are the kinds of pressing questions the nation faces today because it’s National Hot Dog Day.
I know what you’re thinking: who knew hot dogs had their own day? They do. They have their own month, too: National Hot Dog Day is part of National Hot Dog Month (I kid you not) as designated by the National Hot Dog and Sausage Council.
Americans love hot dogs. Love them. Last year, Americans spent more than $2.5 billion on hot dogs just in supermarkets. That’s about 10% of the entire gross domestic product of El Salvador. On hot dogs.
That doesn’t count all of the dollars spent in restaurants and at sporting events. At baseball stadiums, hot dogs are practically required eating: fans consumed more than 21.4 million hot dogs last season with Los Angeles putting away the most (a remarkable 3 million). It’s no coincidence that baseball, a summer sport, and hot dogs, go hand and hand: during the summer stretch, Americans will eat 7 billion hot dogs, or about 818 hot dogs every second.
While Americans may love their hot dogs, we don’t love taxes. And we don’t love taxes on hot dogs. Believe it or not, the two became intertwined in the 1970s when the so-called “hot dog tax” reared its ugly head.
In 1971, New York managed to push through a law which imposed a state and city sales tax to restaurant bills that totaled more than a dime and less than a dollar. The price range earned the tax the moniker “hot dog tax” because it boosted the tax on lunches like hot dogs – while exempting breakfasts (at the time, cheaper than a dollar) and pricier meals. In other words, your caviar-laden baguette could have escaped taxation but not the lowly hot dog.
Ironically, while the “hot dog tax” was characterized as a tax that hurt the poor, then Gov. Nelson Rockefeller (R) used the extension of the sales tax – introduced just a few years before – to promote large welfare programs and public works projects. The New York Governor was considered far too spend-y and tax happy to be a Republican at the time and caught a break when President Nixon (R) was forced to resign: President Gerald Ford (R) chose Rockefeller to serve as his Vice President (despite Rockefeller’s clear lack of popularity, losing the primary three times in his bid to become President).
Despite the motivation behind the hot dog tax, it was, as you can imagine, wildly unpopular. A Citizens Committee to Repeal the Hot Dog Tax was formed (yes, it was a real group) to urge the Governor to ditch the tax on the “masses, not the classes.” At the helm of the committee was Robert Wagner Jr., son of the former mayor of New York City. He collected more than a million signatures on a petition signatures protesting the tax; the petition was largely ignored.
Today, the dollar price threshold no longer applies in New York. But illustrating just how tricky – and in some cases, silly – sales taxes can be, New York still imposes a tax on hot dogs, just not all hot dogs. Refrigerated hot dogs are exempt from sales tax but if heated or served on a bun, it becomes taxable. Similarly, in Pennsylvania, ready to eat or heated hot dogs would be taxable while a hot dog grocery or deli item would not (brochure downloads as pdf). In Massachusetts, hot dogs are taxable in stores if served as a hot food and inside convenience stores whether heated or refrigerated (if the store provides a heating unit) and whether or not prepackaged; South Carolina has a similar statute. In California, hot food is generally taxable while cold food is not; the opposite is true for take out drinks where hot drinks are generally taxable and cold drinks are not.
Confusing, right? That’s what lawmakers are counting on. The sales tax is one of the easiest taxes to manipulate – and politicians love it for that reason. It’s confusing enough that it’s simple to hide and is, in most cases, easily forgotten by taxpayers. An extra half penny or penny in sales tax can bring in millions of dollars in a single year without additional administration. It takes little effort from the government to collect since the burden is on the retailer or vendor. And despite clear evidence that the tax is regressive – affecting those at the bottom the most – sales tax has one of the widest bases since everybody pays something. That makes it easy to simply slap a tax on practically anything – even our beloved hot dogs.
Sales taxes, once implemented, tend to last a long time – you rarely see repeals or exemptions even when a tax is said to be temporary (Philadelphia, anyone?). And even when sales taxes do dip, they often come back up – just ask the folks in Chicago who are dipping into their pockets to pay a whopping 10.25% sales tax. Again. It’s even worse if you’re trying to pick up some food and drink – including those famous Chicago hot dogs – in the McPier area of Chicago: those rates will hit 11.25% in 2016 due to the recent hike.
“Hot dog tax” or no, Americans will continue to chow down on hot dogs. We can’t resist. As for those toppings? For the record, Americans prefer mustard. According to a survey conducted last year on behalf of the National Hot Dog and Sausage Council, nearly three quarters (71%) put mustard on their hotdogs. Ketchup comes in a distant second (52%), while onions (47%), chili (45%) and relish (41%) round out the favorite things to put on a hot dog list.
(What, no peppers? Chicago, I’m so disappointed.)