[Congressional Record Volume 141, Number 14 (Tuesday, January 24, 1995)]
[Extensions of Remarks]
[Page E169]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      BRINGING BACK THE DEDUCTION FOR LEGITIMATE BUSINESS EXPENSES

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                       HON. BARBARA F. VUCANOVICH

                               of nevada

                    in the house of representatives

                        Tuesday, January 24, 1995
  Mrs. VUCANOVICH. Mr. Speaker, today I am introducing legislation to 
restore the business meal tax deduction to 100 percent. In 1993, as 
part of the President's economic plan, Congress passed legislation 
reducing the tax deduction for business meals and entertainment from 80 
percent to 50 percent. I didn't see the wisdom of that $16.3 billion 
tax increase then, and I don't see it now.
  Anyone who has owned a business or been involved in management can 
testify to the legitimacy of using meals and entertainment as a 
marketing tool. Yet we single out this particular business expense, 
penalizing the restaurant industry, the tourism and entertainment 
trades and the foodservice industry, to name only a few. When this 
deduction was reduced from 100 to 80 percent in the Tax Reform Act of 
1986, it greatly impacted these industries--industries which are 
crucial to Nevada. Now, because of the reduction from 80 to 50 percent, 
it is estimated that almost three-quarters of mid-sized companies in 
America have made policy changes resulting in reductions in meal and 
entertainment expenses.
  I can tell you from conversations I've had back home that many of 
Nevada's businesses rely heavily on the business meal and entertainment 
deduction as a marketing tool to solicit clients. Moreover, restoring 
the deduction is essential to the tourism trade--which employs almost a 
third of the State's labor force--in my home State of Nevada. Restoring 
the business meal deduction will increase restaurant patronage and 
convention business and help fill hotels and motels not only in Nevada, 
but across the country. I'm sure it would have a similar effect across 
the Nation, and I urge my colleagues to support my efforts to restore 
the 100 percent deductibility of business meal and entertainment 
expenses.


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