Trump floats restoring full corporate tax deduction for meals as coronavirus derails restaurants
President TrumpDonald John TrumpHealth insurers Cigna, Humana waive out-of-pocket costs for coronavirus treatment Puerto Rico needs more federal help to combat COVID-19 Fauci says April 30 extension is ‘a wise and prudent decision’ MORE said Sunday that he would push to restore the ability for corporations to deduct the full cost of meals and entertainment from their taxes as the restaurant industry suffers during the coronavirus pandemic.
Trump said Sunday afternoon that he would ask Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump floats restoring full corporate tax deduction for meals as coronavirus derails restaurants Mnuchin emerges as key asset in Trump’s war against coronavirus Sunday shows – New coronavirus projections, quarantine talk dominate MORE and Labor Secretary Eugene ScaliaEugene ScaliaTrump floats restoring full corporate tax deduction for meals as coronavirus derails restaurants Some Democrats growing antsy as Senate talks drag on Democrats balk at ,200 rebate checks in stimulus plan MORE to look into reversing a provision of the 2017 tax-cut law that could incentivize corporations to spend more money on restaurant meals.
“You’re going to lose all these restaurants and they’re not going to make it back. They have to get going,” Trump said Sunday during a briefing at the White House. The president said he spoke with iconic chef Wolfgang Puck earlier in the day.
“Some are closing right now. Despite the fact that they could be open in the not too distant future. We expect that. But there are some that aren’t going to be able to get open.”
Restaurants and bars across the U.S. have been forced to shutter or restricted to take-out or delivery operations as Americans seek to slow the spread of COVID-19, the disease caused by the novel coronavirus. Tens of thousands of food and bar industry employees have lost their jobs amid the pandemic as the food industry braces for widespread bankruptcies.
The 2017 Republican tax overhaul signed by Trump revoked a provision that allowed corporations to deduct “any expenses related to activities generally considered entertainment, amusement or recreation” from their annual taxes.
Corporations are currently allowed to deduct 50 percent of the cost of meals, including for employees and current or potential customers or clients, so long as the meals “are are not considered lavish or extravagant,” according to 2018 gudiance from the IRS
Changing the U.S. tax code would likely require an act of Congress, and it’s unclear whether the idea would have enough support from lawmakers or industry to make it into law.
Restaurant industry advocates and celebrity chefs have urged lawmakers to provide the industry with extensive financial support to weather the pandemic and keep workers on payroll in hope of a quick rebound when the pandemic subsides.
Trump on Friday signed a $2 trillion economic rescue package that includes billions in loans for small businesses that would not need to be repaid if used entirely to pay workers, rent and other essential expenses.