MIDDLE-CLASS TAX RELIEF AND JOB CREATION ACT; Congressional Record Vol. 141, No. 31
(Extensions of Remarks - February 16, 1995)

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[Extensions of Remarks]
[Pages E384-E385]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                         HON. NEIL ABERCROMBIE

                               of hawaii

                    in the house of representatives

                      Thursday, February 16, 1995
  Mr. ABERCROMBIE. Mr. Speaker, I rise today with the cochairs of the 
Tourism Caucus, Mr. Oberstar and Mr. Roth, to introduce legislation 
based on a commitment to fairness for the working people of this Nation 
and a sense of the profound need for job creation. Specifically, this 
legislation would restore a 100-percent deduction for business meals 
and entertainment [M&E] and the spousal travel deduction.
  The decision to cut the M&E deduction and the spousal travel 
deduction is one of those fair-sounding ideas that can have unintended 
and undesirable consequences.
  Travel, tourism and entertainment constitute the third-largest 
industry in the United States. Its 1990 payroll was $83 billion and it 
is an industry that employs 6 million people. This is an industry whose 
growth Washington should support and promote.
  The next time you are eating lunch in a restaurant, take a look 
around at the business types. Here's what you probably won't see: the 
stereotype of obscenely rich tycoons sipping three-martini lunches. 
What you will see are sober, serious middle-class people doing business 
the American way: in face-to-face meetings.
  Meetings are a legitimate cost of doing business. And until 1986, the 
cost was fully tax-deductible. At that time, the deduction was reduced 
to 80 percent. The effect that has on a business may be as simple as 
making phone calls instead of airline flights. Yet, the ramifications 
are enormous.
  After all, when business takes its act on the road, there's a big 
supporting cast: airline pilots, mechanics, luggage handlers, flight 
attendants, waiters, waitresses, cooks and restaurant owners, food 
service companies and truck drivers, convention caterers and service 
employees, and hotel bell captains and receptions clerks.
  They're all middle-class working people. The people who have been 
victims of misguided economic policy since the 1980's.
  [[Page E385]] Furthermore, we don't want to give our foreign 
competitors an advantage over American workers and American businesses. 
Thousands of foreign travelers criss-cross the country every day. They 
and their employers know they've got to talk to Americans face-to-face 
to make sales here. That's why their governments--Japan, South Korea, 
Taiwan, France--permit 100-percent deductibility for business expenses. 
If we're to be competitive, we must level the playing field for our own 
  In September 1994, a survey conducted on behalf of American Express 
examined the impact of the M&E deduction on company spending, and the 
ultimate impact on the restaurant industry. The study was taken among 
small and mid-sized companies where the impacts would be more 
  The findings indicated there is a high propensity or willingness to 
enforce behavioral change as the financial impact of the tax law is 
  I am sure that if a study was conducted on the spousal travel 
deduction the results would be similar.
  I ask my colleagues to support us in this effort and work with us to 
ensure that it is included in any middle-class tax relief legislation 
that comes before the 104th Congress.