Dodd To TBR: Tax Issues Tough

<I>Washington, D.C.</I> - Sen. Christopher Dodd (D-Conn.) told members of the Travel Business Roundtable at their recent meeting here that he doesn't "hold out a great deal of hope" that Congress will consider increasing the business meals tax deduction this year.

Noting that the recently concluded budget agreement between the White House and Congress sets strict budget deficit reduction targets over the next five years, Dodd commented that the meals tax issue is not being discussed, either formally or informally, in Congress at this time. "I haven't heard that it's on the plate," he said.

Currently, the deduction is limited to 50 percent. Bills have been introduced in Congress to raise that limit to 80 percent and 100 percent, but they are not considered likely to pass. The Travel Business Roundtable supports the efforts of several travel industry organizations working to restore the meals deduction credit.

Dodd also said that a recent recommendation from the fledgling U.S. National Tourism Organization to fund a public-private entity to promote tourism to the United States through some type of departure user fee on airline tickets would be "hard to sell" to Congress. "You will have an awful time," he advised TBR members. "It's hard to sell any kind of tax." But a surcharge on passports to fund an international tourism marketing program "might be a little easier" to sell, he said.

Dodd underscored, though, that the United States needs to put funding resources behind tourism promotion efforts abroad, and he noted increasing competition from other countries that have marshaled government and private-sector revenue to attract tourists. The senator encouraged TBR members to lobby their Congressional representatives when they are visiting their districts rather than concentrating all efforts on Washington-based lobbying.

TBR member Steven Lew of Universal Studios suggested that a portion of the tax credits proposed for U.S. companies that hire workers under the Welfare to Work programs, now being implemented nationally, could be diverted to a national travel and tourism promotion account.

Charles Merin, managing director of TBR's lobbying consulting firm Black, Kelley, Scruggs & Healey, outlined the critical elements of any proposal to provide government funding for a new NTO as including unanimous support from the industry, a proposal that avoids multiple committee jurisdictions, a private sector funding element and no new taxes or user fees.

Tom Ochs, a partner with Squier, Knapp, Ochs Communications, told TBR members to identify ways to raise the profile of the organization and the industry. The organization needs to approach this goal with the intensity and directness of a political campaign, he suggested, with elements of the campaign to include public relations, and grass-roots and Washington-based lobbying. "In an increasingly worldwide climate, if you stand still, you're going to get run over," he warned.

TBR chairman Jonathan Tisch, chairman and CEO of Loews Hotels, unveiled a 10-minute video produced for the organization by Walt Disney Attractions that will be used as part of a congressional educational program to identify the financial contributions that travel and tourism make to the economy. The video will be distributed to all senators and congressmen who meet with Roundtable members.

A central theme of the TBR meeting was publicizing the Welfare to Work Partnership, which was announced by President Clinton during his State of the Union address this year. The private-sector program is in response to legislation recently enacted by Congress that cuts welfare funding and limits the time individuals can remain on welfare. United Airlines chairman and CEO Gerald Greenwald is chairman of the partnership, which already has more than 100 U.S. businesses committed to participating in the program.

Eli Segal, president of the Welfare to Work Partnership, told TBR members that "travel and tourism is poised to be the salvation" of the move to find jobs for welfare recipients because it offers a sizable volume of entry-level jobs. "It is estimated that two-thirds of all jobs for welfare recipients will be found in small businesses of less than 500 employees," Segal said, pointing out that small businesses dominate the travel and tourism industry.

TBR now counts as members 71 CEOs, presidents or senior vice presidents, representing all segments of the travel industry.