[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[Extensions of Remarks]
[Page 16643]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       THE MEAL TAX REDUCTION ACT

                                 ______
                                 

                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                         Monday, July 19, 1999

  Mr. SMITH of New Jersey. Mr. Speaker, today I am reintroducing the 
Meal Tax Reduction Act. This legislation, which I also introduced in 
the last session of Congress, is designed to alleviate some of the tax 
code inequities that hurt the food service industry. As many of my 
colleagues know, the food service industry is the only business 
specifically excluded from normal business expense deduction rules. My 
legislation is aimed at restoring fairness to current law.
  The Meal Tax Reduction Act would partially restore the deduction 
permitted for meals and entertainment expenses to 80 percent. While I 
believe we should eventually reinstate the meal tax to 100 percent, 
this legislation takes the first steps to gradually restore the tax to 
at least the pre-1993 level of 80 percent.
  Under the Balanced Budget Act, transportation workers can already 
deduct a higher percentage of their meal expenses than other workers, 
and transport workers will eventually be able to deduct 80 percent of 
their food expenses. My legislation would simply extend the deductions 
already put in place for the transportation industry, so that fairness 
is ensured for everyone.
  This important legislation would eventually allow someone starting a 
small business, working away from home on a construction job, or 
traveling away on business to take a reasonable tax deduction for food 
expenses.
  Since the law was changed in 1993 to a 50 percent meal tax deduction 
there has been a notable has had a negative effect on the restaurant 
sector of our economy. And the restaurant industry employs millions of 
people. Restoring the meal tax deduction would help create new jobs in 
our economy, often for people who are trying to enter the workforce for 
the first time. If welfare to work is to be fully implemented, we need 
to create the kind of entry level positions and entrepreneurial 
opportunities that are often the first steps up the ladder to the 
American Dream.
  In addition, law penalizes and de-legitimizes the food service. The 
Meal Tax Reduction Act would begin moving the restaurant industry 
toward parity with other businesses. The act immediately increases the 
meal tax deduction to 60 percent next year, and eventually to 80 
percent by the year 2008. My legislation gradually fixes the meal tax 
inequity.
  Lastly, I want to note that since the introduction of my legislation 
last year, that support for meal tax equity has been steadily 
increasing. In fact, Chairman Bill Archer of the Ways and Means 
Committee has included meal tax reductions in his comprehensive tax 
plan tat are very similar to legislation for which I have been 
advocating. There is nothing like an idea whose time has come.

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