The final vote hasn’t happened yet, but Congress has agreed to include the Meals Deduction in the Covid relief bill it is currently debating.
In a statement, Michael Bilello, senior vp, Wine & Spirits Wholesalers of America, called the action “a win for family-owned businesses” and said it “will benefit independent restaurants as well as the family distributors who serve them.
“For months now, news reports have focused on the economic harm COVID has inflicted on the hospitality industry. Now, when Congress finally enacts a provision that directly impacts restaurants, some want to criticize the measure.
“This is exactly the kind of action Congress needs to take! Anything that gets people spending money in our nation’s restaurants should be applauded at this juncture. This measure will help restaurants, some of the hardest hit businesses by the pandemic, and deduction is helpful to businesses operating in uncertainty as to what 2021 will actually shape up to be,” Bilello said, adding:
“It’s absurd to say this will only benefit wealthy Americans. Every meal in a restaurant means economic activity that benefits the entire restaurant team — from the owner to the cooks and waitstaff directly. It also creates a ripple effect that helps the meat and vegetable vendor as well as wine and spirits distributors who rely on restaurants as important customers.”
According to a recent study for WSWA by John Dunham & Associates, the impact of a full reinstatement of the deduction for a single year could add nearly 29,000 jobs in the suffering restaurant industry, 3,500 jobs in wholesaling and distribution and 2,300 jobs in production. Suppliers to these industries would be able to add over 13,100 jobs and increased spending would result in the addition of another 19,200 jobs. The overall impact nationwide would be more than 67,000 new jobs, $3.0 billion in wages, and $9.8 billion in economic output.
In addition, the study says, “much of the tax revenue lost by extending deduction would be recouped in the form of excise taxes on increased alcohol and food sales and business and income taxes on newly created jobs, to the tune of nearly $880 million in federal excise and business taxes, and $1.04 billion in state and local taxes. This equates to creating roughly $5.13 in economic activity per net tax dollar, and more than $50 less per job than the federal government is currently spending via unemployment benefits.”