It's worth emphasizing that while the White House's Larry Kudlow
claimed early yesterday that the GOP relief package would include “increased business deductions for meals and entertainment,” the bill released hours later included the deduction for meals,
but not entertainment.
At face value, the idea may not seem outlandish. After all, the restaurant industry has been brutally slammed by the pandemic, and it's hardly unreasonable for policymakers to look for ways to give the industry a boost.
But the details matter. At issue here is a tax break to those who talk business while eating out. As the Center on Budget and Policy Priorities' Robert Greenstein
noted yesterday, it's a policy popularly known as the “three-martini-lunch deduction,” generally celebrated by wealthy executives and lobbyists.
Jon Chait
added a while back, "It is certainly true that restaurants face an existential threat from the coronavirus. But letting executives write off the cost of meals where they 'discuss business' -- a notoriously lax requirement that functionally subsidies pleasure as a business cost -- is unlikely to save those restaurants. How many executives are going to start crowding into restaurants just to get the sweet tax deal if they’re worried about contracting a deadly virus?"
What's more, it's hard not to wonder whether the White House started pushing this idea as a way to help Donald Trump's businesses -- where three-martini lunches are probably quite common.
But there's also a larger context to consider. When it comes to this aid package -- what some have begun referring to as Phase IV -- House Democrats passed a bill that included $10 billion
for low-income food assistance.
But as Sen. Bernie Sanders (I-Vt.)
told MSNBC's Chris Hayes last night, Republican officials are now fighting for "a 100 percent deduction for rich people to go out and have three-martini lunches. But you know what, millions of families in this country are facing hunger. There's not an additional nickel in their package for nutrition programs for children or for working people."
The Center on Budget and Policy Priorities' Robert Greenstein
emphasized the same observation: "The lack of stronger [food-stamp] provisions is made all the more striking by the package’s inclusion of a measure
doubling the tax deduction for business meals.... Under the Senate Republican plan, meals for corporate executives would be more heavily subsidized, but a strengthening of SNAP benefits for people facing hunger and food insecurity didn’t make the cut."
As congressional negotiations begin in earnest, there's obviously no way Democrats are going to accept provisions like these. The problem, however, is that this is the kind of agenda Republicans consider worthwhile.
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