The president covered a wide range of economic possibilities during the Monday White House Coronavirus Task Force briefing as conversations about re-opening America became increasingly feverish. While neither Trump nor state leaders have given definitive dates or plans about how business-as-usual can coexist with a pandemic, some suggestions held significant water.
One of the most ravaged industries in the wake of the Wuhan coronavirus in America has been restaurants, bars, and entertainment. Shelter-in-place orders meant a total halt in business for the majority of dine-in restaurants, theaters, casinos, and concert venues with no telecommuting possibilities. While some restaurants with low overheads have been able to survive on a wing and a prayer while delivering drinks and food to quarantined residents, others have shuttered completely with little hope of returning.
President Trump suggested on Monday that restaurants and entertainment venues be the beneficiary of repealed tax regulation. Since the 2017 Tax Reform Act, businesses have been unable to deduct client dinners and entertainment purchases like concert tickets, greatly reducing companies' ability to splurge on customers. But with the economy in peril, particularly for restaurants and entertainment, the repeal of the restaurant deductibility ban would be enticing to companies eager to show the post COVID-19 world that they are open for business.
Trump has promoted the idea of restaurant deductibility throughout the month of April through his consistent lens of optimism. As an industry that traditionally operates on razor-thin margins, even at the highest end of luxury, hospitality has been gutted in the past few months. If a government incentive for companies to ring up big tabs at steak houses and buy skyboxes at Madison Square Garden exists, it should be granted.
Cities like New York, which have been acutely impacted by the Wuhan virus both in public health and economy, could stand to be most benefited by such a repeal. NYC is home to some of the most sought after and iconic restaurants in the world - all of which are now looking at precarious futures. A simple tax incentive for companies and businesses to re-enter restaurants with full pockets could provide a desperately needed influx of cash when doors to fine-dining open again.
Dining out will have the added benefit of being something dearly missed and almost nostalgic in a re-opened economy. As chefs, cooks, sommeliers, and servers get back to work, a cooped-up and frustrated America will be glad to sit across from each other again with no worry, apart from choosing an entree. Tables may start out further apart than normal, bartenders might don masks, and gloves, but this little change would start putting cash in pockets. Any incentive to get people through the door would be helpful.
Likewise, tickets to concerts and sporting events will likely not be near the top of immediate purchases in the post-COVID-19 world, but giving businesses the opportunity to once again entice their clients with these event passes will boost a troubled industry.
Just as there is no clear, perfect answer to life in the pandemic, there is no perfect answer for how to transition out of it other than that we must. A return to restaurant deductibility, as touted by President Trump, is an obvious stimulus that does not require billions in cash to be approved by Congress.
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