Letter: Restore The Meal Tax Deduction

<I>Bills have been introduced in both houses of Congress this session seeking the restoration of the business meal tax deduction. In the House of Representatives, two bills--H.R. 1285 by Rep. John Ensign (R-Nevada) and H.R. 628 by Rep. Neil Abercrombie (D-Hawaii) would restore the deduction to 100 percent. In the Senate, a bill from Daniel Inouye (D-Hawaii) would restore the deduction to 80 percent. Following are excerpts from Sen. Inouye's letter to fellow senators.</I>

On Jan. 21, I introduced S.114, which would restore the business meal and entertainment deduction to 80 percent. The deduction was reduced from 80 to 50 percent under the Omnibus Budget Reconciliation Act of 1993, and went into effect on Jan. 1, 1994.

Restoration of this deduction is essential to the livelihood of the food service, travel and tourism, and entertainment industries throughout the United States. These industries are being economically harmed as a result of this reduction. All are major industries which employ millions of people, many of whom are already feeling the effects of the reduction.

Many companies have changed their policies on travel and entertainment expenses as a result of the change. Businesses also have been forced to curtail reimbursement policies. In some cases, businesses have eliminated expense accounts. Consequently, restaurants, which have relied heavily on business lunch and dinner services, are being adversely affected.

I sincerely hope that the business meals reduction to 50 percent does not become a "luxury tax two," in which Congress moves toward restoration only after the damage has been done and huge job losses have occurred. Accordingly, I urge you to join me in co-sponsoring this important legislation and to reverse this negative trend.