Tax Deductions and Entitlements

In “Entitlements Subsidize More Than the Poor” (Commentary, April 16), Lenny Goldberg stated “the single most abused entitlement in the tax code is the deduction for business meals.” But if Goldberg were to really research the facts, I think it would change his thinking.

As a restaurateur and small businessman, I know a lot about the business marketing meal. It’s not about $50-power lunches or the ridiculously outdated “three-martini lunch” fallacy. At my restaurant, for example, about 30% of my lunch business is from small business people. These people do not have lavish expense accounts; in fact, their average lunch check is less than $10 per person.

The business marketing meal is used mostly by small businesses that can’t afford expensive offices or marketing techniques, such as advertising and sampling. Under President Clinton’s proposal--which Goldberg endorses--these small businesses will be penalized. The result of reducing the business meal deduction will be to tax small companies more heavily for using this marketing technique while continuing to allow the larger, better-financed companies to receive 100% deductions for very expensive advertising campaigns and sales promotions. If the new Administration is serious about wanting to help small business, this isn’t the way to do it!

By my calculation, Little Joe’s will lose about 20% of its total sales due to this cut. As a result, I’ll probably have to cut back on my operations and eliminate the need for a number of servers, busboys and kitchen workers. That could be as many as 10-12 more unemployed people on the street. And if the food service industry isn’t hiring these entry-level people, who is?

STEVE NUCCIO

Los Angeles