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The “three-martini lunch” tax break sums up why so many people hate capitalism

A bartender pours martinis on a yacht at the United States Sailboat Show in Annapolis, Maryland
Reuters/Molly Riley
Deductibles.
  • Lila MacLellan
By Lila MacLellan

Quartz at Work reporter

As Americans dig into the details of the government’s new stimulus bill and debate the impact it will have on the average household, one provision has sparked utter disgust: the so-called “three-martini lunch” tax break.

As reported by the Washington Post, this tweak of the tax code will allow corporations to deduct 100% of their business meals, instead of the 50% they’ve been able to claim since the 1980s.

Tim Scott, a Republican senator from South Carolina, introduced the deduction, claiming it would help restaurants and restaurant workers who have been struggling since the beginning of the pandemic.

While the goal is admirable, the logic of the measure—which was championed by the Trump White House—is hard to defend.

Before we even get to the economics, let’s ask why elected officials would incentivize indoor dining, the very activity that puts restaurant workers (and patrons) at risk of contracting Covid-19, when hospitals already are buckling under the stress of case spikes in several US states? Restaurant environments are so friendly to the virus—giving it access to people from various “bubbles” mixing indoors without masks—that scientists are calling them “superspreader destinations.”

Part of the answer has to do with a sense of entitlement. As we saw with members of US president Donald Trump’s inner circle who refused to wear masks during a string of events before election day, many Republican officials seem to believe that public health rules don’t apply to them or their corporate friends. They have been modeling the worst behaviors since Covid-19 first became a threat—and now they’re using the tax code to encourage people to put their fellow Americans at risk.

That’s standard cronyism, of course, which is something the Trump administration has brought to new levels—deadly heights, in fact—over the past four years. And it pairs perfectly with a lack of empathy.

Democrats who spoke to the Washington Post on the condition of anonymity said they only agreed to this deduction in exchange for an item on their own wish list: additional tax credits for low-income families and the working poor, according to the Post. If true, the swap adds insult to injury. It’s shameful that a benefit for the lowest earners was treated like any other pawn in the horse-trading that led to this package. More generous deductions for business lunches will literally cost the government’s coffers funds that could have been used to support more Americans. And yet it’s also Republicans who continue to push a narrative that says people are responsible for their own social mobility, that where there’s a will, there’s a way, et cetera.

“Republicans are nickel-and-diming benefits for jobless workers, while at the same time pushing for tax breaks for three-martini power lunches. It’s unconscionable,” senator Ron Wyden, a Democrat from Oregon, told the Washington Post.

In short, the tax break is symbolic of winner-takes-all capitalism at its most piggish, and helps explain the rising number of Americans who hold a positive view of socialism.

With an estimated 26 million Americans going hungry and millions out of work, the Republicans, while claiming to represent the working class, sought ways to enrich the privileged. Though disguised as a gift for restaurant workers, their policy is actually a gross endorsement of greed and classism.

To quote actress Sandra Bernhard’s response to the news: “Happy holidays, peasants!” And to those who plan to take advantage of the US government’s latest show of corporate welfare, at least have the good sense to enjoy your now fully deductible business lunch at an outdoor table.

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