Trump floats restoring full corporate tax deduction for meals as coronavirus derails restaurants

Trump floats restoring full corporate tax deduction for meals as coronavirus derails restaurants
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President TrumpDonald John TrumpPennsylvania Supreme Court strikes down GOP bid to stop election certification Biden looks to career officials to restore trust, morale in government agencies Sunday shows preview: US health officials brace for post-holiday COVID-19 surge 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 MnuchinBiden's Treasury pick will have lengthy to-do list on taxes On The Money: Initial jobless claims rise for 2nd week | Dow dips below 30K | Mnuchin draws fire for COVID-19 relief move | Manhattan DA appeals dismissal of Manafort charges Mnuchin to put 5B in COVID-19 relief funds beyond successor's reach MORE and Labor Secretary Eugene ScaliaEugene ScaliaWhat's behind the divisions over Biden's secretary of Labor? Business groups shudder at thought of Sanders as Labor secretary Why millennials will win Trump's war on socially responsible investing 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.