This guest post is by Shashi Bellamkonda, director of social media and public relations — employees call him Social Media Swami — at Network Solutions, a company that helps small businesses establish an online presence and conduct online marketing. Having worked in the hotel and restaurant business for more than a decade, his love affair with the industry clearly has not ended.
These days, news about “jobs” has been gloomy. First, there was the news of Steve Jobs giving up the helm of Apple, one of the world’s most valuable companies. Then, the Bureau of Labor Statistics reported that the unemployment rate held at 9.1% in August, and leisure and hospitality changed little over the month.
I have been watching the refrigerator in the kitchen area of my office, and in the past few years, a lot of folks are bringing their lunches from home. The restaurant owners I meet tell me that their regulars are reducing the number of visits. In times of recession, people rightly hang onto their purse strings and start saving where they can, and eating out can be a casualty. The National Restaurant Association estimated that more than two of five consumers are not dining out or using takeout as often as they would like.
The tax-free lunch plan
President Barack Obama and Congress could join together to pass a law that allows any taxpayer spending $1,000 at restaurants in 2011 to write off that amount. In some form, this is already allowed for business expenses, with some restrictions. In my proposal, I make the accounting simple.
- Receipts from restaurants should be saved to be eligible for this tax relief.
- On average, for taxpayers in the 25% bracket, this is as good as a coupon such as Groupon or LivingSocial.
According to Syracuse University, there are more than 139 million taxpayers in the U.S. Imagine giving this population the incentive and the encouragement to spend. The national restaurant industry estimated that the total economic impact of the industry exceeds $1.7 trillion, as every dollar spent in restaurants generates $2.05 spent in the overall economy. Considering this, it would seem that steps taken to entice restaurant goers could go a long way to help kick-start the economy.
“The U.S. restaurant industry is an economic juggernaut whose annual sales are larger than 90% of the world’s economies — if it were a country, it would rank as the 18th-largest economy in the world,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association.
The 2009 “Cash for Clunkers” program reportedly saved 42,000 jobs in the auto industry. The restaurant industry can help the American economy expand with a plan such as mine.
Leave a comment. What do you think? Do you have other suggestions?