[Congressional Record Volume 147, Number 59 (Thursday, May 3, 2001)]
[Senate]
[Page S4267]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY:
  S. 831. A bill to amend the Internal Revenue Code of 1986 to provide 
for a 100 percent deduction for business meals; to the Committee on 
Finance.
  Mr. SHELBY. Mr. President, I rise today to introduce legislation that 
would increase the deductibility of business meals to 100 percent. By 
only allowing a 50 percent deduction, the current law unfairly hurts 
small business owners who many times conduct business face to face over 
a meal. For these people, the costs of business meals truly is a 
legitimate business expense. However, unlike other business expenses, 
they are not able to fully deduct the cost of business meals.
  America's small businesses are the backbone of our economy. Allowing 
full deductibility of business related meals will lighten the heavy 
financial burden small business owners face daily just to be able to 
keep their doors open. Furthermore, increased deductibility will inject 
additional capital into our country's businesses, allowing them to 
spend more money on innovation and growth. Such activities will lead to 
more jobs and a stronger economy.
  Full deductibility of business meals will also create an increase in 
restaurant patronage. As a result, my bill will benefit waiters, 
waitresses, cooks and other restaurant workers by increasing their job 
security and wages. Increased wages will make it easier for restaurant 
employees to meet the rising cost of living. With the cost of gasoline, 
electricity, and health insurance rising to unprecedented levels, 
higher wages can not come soon enough.
  Just as importantly, increased wages will make it easier for more 
Americans to save for their retirement. Rather than living paycheck to 
paycheck, increased wages in the restaurant industry will make it 
possible for more people to begin to save for the future. Given the 
bleak predictions for the continued solvency of the Social Security 
trust fund, Congress must do all that it can to encourage saving.
  Similar bills to increase the deductibility of business meals have 
been introduced in previous years. Now is the time to move beyond mere 
discussion and to move towards meaningful action. This legislation will 
have a positive effect on our economy. It fosters small business growth 
and will help increase wages for many Americans throughout the country. 
I ask that my colleagues join me in support of this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 831

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. INCREASED DEDUCTION FOR BUSINESS MEAL EXPENSES.

       (a) In General.--Section 274(n)(1) (relating to only 50 
     percent of meal and entertainment expenses allowed as 
     deduction) is amended by striking ``50 percent'' in the text 
     and inserting ``the allowable percentage''.
       (b) Allowable Percentage.--Section 274(n) is amended by--
       (1) striking paragraph (3);
       (2) redesignating paragraph (2) as paragraph (3); and
       (3) inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Allowable percentage.--For purposes of paragraph (1), 
     the allowable percentage is--
       ``(A) in the case of amounts for items described in 
     paragraph (1)(B), 50 percent, and
       ``(B) in the case of expenses for food or beverages, 100 
     percent.''.
       (c) Conforming Amendment.--The heading for subsection (n) 
     of section 274 is amended by striking ``50 Percent'' and 
     inserting ``Limited Percentages''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
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