February 8, 2001

Says estate tax repeal is priority issue for members in industry full of family-owned businesses

(Washington, DC) As President Bush sent his tax package to Capitol Hill today, the National Restaurant Association, on behalf of the nation’s 844,000 restaurant locations, unveiled its legislative agenda for the 107th Congress. The Association applauded President Bush for calling for the end of the estate tax—a top legislative priority for the Association this year.

The estate tax, or “death tax”, is a tariff that impairs or destroys family-owned businesses when they are transferred to a family member after the death of the owner. The issue is significant for the restaurant industry, as many of the nation’s restaurants are family-owned businesses.

“We are pleased that the Administration has heard the cries of the thousands of restaurant owners who face a massive tax when their operations are handed down to their families, and look forward to swift action on this issue,” said Steven C. Anderson, president and chief executive officer of the National Restaurant Association. “We also are pushing for other tax reforms that will greatly help the nation’s restaurants—70 percent of which have fewer than 20 employees—provide opportunities to the nation’s 11.3 million employees in the industry.”

In addition to announcing its priority of repealing the death tax, the Association also today unveiled its other top policy issues during 107th Congress:

Immigration – The restaurant industry has long been a welcome home to the nation’s immigrants, and has provided many individuals with the opportunity to achieve the American dream by owning their own business. Unfortunately, current immigration laws often make it difficult for individuals who are legally in the United States and want to work and pay taxes to reach a permanent working status. The Association will continue to press Congress to address this and other important pro-employer/pro-employee issues this year.

Entry-level Wage – The National Restaurant Association believes that wages are best determined by competition and market forces. Research shows that federally-mandated hikes in the entry-level wage fall disproportionately on labor-intensive industries such as restaurants, and hurt the employees they are meant to help: teenagers, little or unskilled individuals and former welfare recipients. These individuals hold the vast majority of minimum wage jobs and look to the industry for an entry into the work force to gain the skills needed to succeed.

Building Depreciation – Outdated depreciation schedules are potentially punitive on the restaurant industry, which experiences excessive wear and tear to its buildings on a daily basis. Currently, commercial real estate generally has a 39-year depreciable life for the original building and any renovations or improvements. Yet certain establishments benefit from shorter depreciation schedules. The Association is urging Congress and the Administration to address this important issue because the 39-year schedule is unrealistic for the average restaurant.

NRA Health Plans – The Association has long argued that Congress should focus on ways to make health care more affordable and accessible for the uninsured. Emboldened by statements by President Bush that he favors Association Health Plans (AHPs), a concept long-endorsed by the National Restaurant Association, the Association will aggressively work to put insurance within reach for its members and their employees by calling for Congress to pass and the President to sign AHP legislation – which allows the Association and other trade groups to offer insurance to their members at a more competitive rate.

Business Meal Deductibility - The National Restaurant Association will again urge Congress to increase the business meal tax deduction to 80% for small businesses and the self-employed. A large and bipartisan coalition agree that the nation’s restaurants are the conference rooms for small businesses, and that conducting business over a meal is a staple in today’s business world and should be treated the same as advertising or any other business expenses under the nation’s tax code.

ADA - The National Restaurant Association strongly supports accommodation for people with disabilities and applauds efforts to promote a cooperative approach on accessibility issues by giving small businesses 90 days to comply with an alleged ADA violation. The Association believes that such an approach will ensure a solution beneficial to both business owners and individuals with disabilities, without tying up the courts with unnecessary litigation.

WOTC - The National Restaurant Association will be working with its members to reach out to the new Congress and the new administration to garner support for a permanent extension of the Work Opportunity Tax Credit (WOTC). One in four restaurants utilizes the credit as it helps them absorb the costs that accompany the additional training and educating often needed for disadvantaged individuals who are new to the work force.

Social Security Reform – The National Restaurant Association has been pushing for Social Security reforms aimed at providing employees with more control over their retirement benefits. Given the demographics of the industry, it is clear that restaurant industry employees would be most impacted by any changes to the Social Security system. Two-thirds of this industry’s workforce are under the age of 35, and 50 percent are under the age of 25. This sector of the workforce overwhelmingly supports reforming the current system and allowing individuals more control over their savings. As a result, the Association will renew efforts to urge Congress to pass a reform proposal to strengthen the current system by adhering to the following principles:

no increases in payroll taxes;

preserving benefits for current and near-retirees; guaranteeing a minimum government safety net for all retirees; and

allowing workers to invest a portion of their payroll taxes in individually-owned and directed personal retirement accounts that can be privately invested.

For more details on any of these issues, and for a list of other issues of importance to the National Restaurant Association, visit our web site at www.restaurant.org/government/index.html.

Source: NRA Press Release