The Stimulus Deal and the Three-Martini Lunch
Apparently one of the non-negotiable requirements of Republicans in forging the stimulus package this weekend was what has been called the three-martini lunch, referring their insistence on amending the Internal Revenue Code to allow a 100% business deduction for the cost of meals, including alcoholic beverages, at which business is discussed rather than the 50% deduction that has been permitted for many years.
I once had occasion to look up the language of this provision in the Code and, as I recall, to qualify for the deduction, discussion at the meal didn’t have to be fully devoted to business matters, or even substantially devoted to business matters, or even significantly devoted to business matters. A two-hour long lunch including three martinis would be 50% deductible as long as it included at least some discussion of business. Now the cost of such a lunch will be 100% deductible. The argument for amending the Code to provide for such an egregiously regressive tax break, was that it will help the restaurant industry. If the government wants to help the restaurant industry it would be vastly more efficient to provide it with targeted subsidies. The insistence of Republicans on subsidizing three-martini lunches demonstrates that, as Jennifer Rubin put it in one of her Washington Post columns yesterday, they are “apparently more interested in grabbing stray goodies for the donor class than in helping the country fend off a full-fledged recession.”