Bipartisan lawmakers introduce bill to roll back '3-martini lunch' tax break

Reps. Suzanne Bonamici, D-Ore., and Peter Meijer, R-Mich., introduced the bill

Reps. Suzanne Bonamici, D-Ore., and Peter Meijer, R-Mich., introduced a bill Friday that would eliminate a tax deduction for business meals and redirect the funds for child care. 

Former President Donald Trump signed the "three martini-lunch" tax break into temporary law in December, saying it would drum up business for pandemic-stricken restaurants. It raised the deduction for business meals and entertainment from 50% to 100%, and drew condemnation from Democrats, though leadership agreed to the provision in exchange for Republicans agreeing to expand tax credits for the poor. 

"They’ll send their executives, they’ll send people there, and they get a deduction. That is something that will really bring life back to the restaurants; I think make them hotter than before. You know, they used to have it. And when they ended it, it was really never the same," Trump had said in advocating for the tax break.


Meijer's and Bonamici's bill would end the increased break. A report from the Joint Committee on Taxation found reducing the tax break would save $5 billion over 2022 and 2023. Those savings would be reallocated to the Child Care and Development Fund.

"The full 'three-martini lunch deduction' is not the most effective use of taxpayer dollars, and it’s time we repurpose these funds," Meijer said in a statement. 

"We should be using federal dollars to meet the needs of working families, not for a needless tax break," Bonamici added. 

It’s not clear whether the bill will ever get a vote, particularly as restaurants struggle to regain their footing. But the Biden administration has been pushing for more child care options for working families and included  $225 billion for it in the American Families Plan. That proposal would cap the amount families that make up to 150% of the median income in their state will have to pay in child care at 7%.


The three martini-lunch deduction was widely popular in the 1980s, but in 1986 was reduced from a 100% break to 80%. It was reduced again in the Tax Cuts and Job Act of 2017, which scaled back the deduction to 50% for meals and basically repealed the allowance for entertainment.