The fact that this surtax has continued 12 years past its original intended and represented purpose is truly an inequity that unfairly burdens the small business community. Thus, the turnover of employees and the hiring of temporary employees or seasonal employment further escalate the employment tax burden on the small business owner. This .2 percent surtax should be repealed now. Small and women-owned businesses typically rely on close personal relationships and customer service to compete for sales rather than on expensive advertising campaigns. Expenditures for meals and entertainment are often an important part of this effort.
Relationship marketing is key to women-owned businesses.
Being able to sit down across the table from a client or prospective client is the best form of sales and marketing techniques available. The prior changes in the tax laws that disallowed 50 percent down to 30 percent of these expenditures for tax purposes have disproportionately increased the selling costs for many small and women-owned businesses. Ten years ago business and travel meals were 100 percent tax deductible as ordinary and necessary business expenses. Looking for revenue, Congress lowered the tax deduction to 80 percent in 1987 and 50 percent in 1994. This results in an unfair and disproportionate tax increase on the restaurant and entertainment industries and the business customers they serve.