Business-lunch bill seen
helping isle economy

By Lisa Nevans
Phillips News Service

WASHINGTON -- Small businesses would be able to deduct 80 percent of the cost of business meals and entertainment, instead of the current 50 percent, under a bill introduced yesterday by several members of Congress, including one from Hawaii.

The bill would help Hawaii's economy by bolstering spending on business and convention travel, said Rep. Neil Abercrombie, D-Honolulu.

"Stereotypes of three-martini lunches have nothing to do with the largely middle-class taxpayers who take the business meals and entertainment deduction," Abercrombie said. "This is about the waiters, waitresses, florists, airline personnel, bus drivers, reservation clerks and hotel housekeepers whose jobs are in danger if Hawaii's economy continues to stagnate."

The bipartisan bill would phase in the deduction for small businesses and the self-employed over 10 years, beginning at 55 percent in 1999.

Its two main sponsors, Reps. Jim McCrery, R-La., and John Tanner, D-Tenn., are members of the House Ways and Means Committee, which has jurisdiction over all tax bills.

House Ways and Means Chairman Bill Archer, R-Texas, has not seen the bill, but will review it before he introduces his own tax bill in May or June, said Ari Fleischer, a spokesman.

In 1987, the business meal deduction was reduced from 100 percent to 80 percent; in 1994, it was further reduced to 50 percent. Abercrombie has said he hopes to restore the deduction to 100 percent.

While the term "business lunch" conjures up an image of lavish feasts, the average business lunch costs $11.60, said Herman Cain, CEO and President of the National Restaurant Association.

"We're talking a chicken sandwich, cup of soup and an iced tea," Cain said.

Two-thirds of business meal spenders earn less than $60,000, according to research conducted for the restaurant association, which supports the bill.