The COVID-19 stimulus deal includes a tax break for business lunches pushed by Trump, in exchange for measures that help the poor, report says
A dry martini. Bhofack2 / Getty Images
According to The Washington Post, the still-secret details of the COVID-19 economic agreement concluded on Sunday include a tax break for companies with a "three martini lunch".
Officials familiar with the negotiations informed the paper that the measure was in a draft proposal.
The corporate tax break would allow businesses to deduct the full cost of a business meal from their federal taxes, rather than the current 50%.
Trump has been pushing for the measure since April. The White House did not immediately respond to a request for comment.
According to the Post, Republicans accepted tax breaks for poorer Americans in a deal to secure the measure.
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According to The Washington Post, the draft COVID-19 stimulus package provides for a tax break for the hospitality of companies that President Donald Trump is personally committed to.
The measure would allow businesses to deduct the full cost of a business meal from their federal taxes, as opposed to the current 50%, the paper reported.
Although the leaders of Congress reached an agreement on a stimulus package late Sunday, the details have not been released, so reports like the Post's are the best source for the cut.
According to the paper, Treasury Secretary Steven Mnuchin had included the tax break as a White House priority in the negotiations.
The White House did not immediately respond to a request for comment from Business Insider.
It has been derided by critics as a break for a "three martini lunch", which is not good value for money for business revival.
Summaries of the overall package released by the Democrats, as well as statements made by House Speaker Nancy Pelosi, Senate Minority Chairman Chuck Schumer, and Senate Majority Leader Mitch McConnell, do not directly mention this on Monday.
However, a Democratic adviser told the Post that the Democrats accepted the measure in exchange for the GOP, which agreed to expand tax credits for working poor and low-income families.
Read more: Jared Kushner helped start a Trump campaign shell firm that secretly paid the president's family members and spent $ 617 million on re-election
Meanwhile, there has been public backlash against the planned distribution of $ 600 direct stimulus checks, half the amount from the last round in April.
Trump brought the proposal for a corporate dinner to the table in April to boost the restaurant industry, the Post reported.
"They'll send their executives, they'll send people there, and they'll get a copy," the Post told him. "This is something that will really bring the restaurants to life. I think they will be hotter than before."
It was included in the $ 1 trillion draft GOP Health, Economic Aid, Liability, and Schools (HEALS Act) in July, along with corporate pandemic liability protection. Both measures were vehemently opposed by the Democrats, and the HEALS bill was not passed.
Oregon Democratic Senator Ron Wyden accused Republicans of "holding back aid" to pass the measure in the final negotiations.
Howard Gleckman, a senior fellow at the Tax Policy Center, wrote in May that the measure is unlikely to be effective in stimulating the economy.
"With the president's long history in the hospitality industry, his affinity for this tax subsidy is not surprising," he wrote. "But as a tool to stimulate the currently ailing economy, this tax break is, as the president himself might say, a total loser."
He argued that it "won't do much more than increase the rewards for business people who play the system," noting that the current 50% business lunch deduction is already widely used for tax avoidance purposes.
Congress is expected to vote on the package on Monday after a long tug-of-war between more generous proposals from the Democratic Party and leaner Republican deals.
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