Bill Overview
Title: Restaurant Revitalization Tax Credit Act
Description: This bill allows certain restaurants affected by the COVID-19 pandemic a credit against payroll tax liability up to 100% of the wages paid to their employees, not to exceed $25,000 in any calendar quarter.
Sponsors: Sen. Cardin, Benjamin L. [D-MD]
Target Audience
Population: Global restaurant industry workers
Estimated Size: 15000000
- The global restaurant industry was widely affected by the COVID-19 pandemic, leading to closures and revenue losses.
- Restaurants employ millions of workers worldwide, all of whom could potentially benefit if their employers receive tax credits.
- The bill specifically targets "certain restaurants," implying a subset of the global universe of restaurants will benefit.
- The concept of payroll tax credits is applicable primarily in nations with established tax systems, impacting those jurisdictions differently.
- The pandemic affected the restaurant industry worldwide, suggesting a broad impact potential.
Reasoning
- The policy targets U.S. restaurants economically affected by the COVID-19 pandemic, focusing on a subset of the 15 million workers in the U.S. restaurant industry.
- Many restaurants are small to medium-sized businesses that struggled during the pandemic. These entities and their workers would experience direct financial relief due to reduced tax liabilities, potentially increasing workers' job stability and income security.
- The program size limitation implies that only a fraction of the industry will see significant relief, leading to a differential impact across the community.
- Non-eligible restaurants or those that are already stable post-pandemic might experience minimal or no impact from the policy.
- Emphasis on payroll tax credits means that the policy will not influence other business expenses like rent or non-payroll supplies, thus also limiting its effect.
Simulated Interviews
Restaurant Manager (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I think this tax credit could really help us keep staff that we were considering letting go.
- It might not solve all our problems but it is a step in the right direction.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Bartender (Kansas City, MO)
Age: 32 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- If my employer gets a tax credit, they might be able to afford putting me back on full time.
- It's tough right now, anything would help honestly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Restaurant Owner (Miami, FL)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This relief could help us reinvest in some much-needed renovations.
- It's a relief to have some acknowledgment but I hope the roll-out is smooth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 5 |
Waiter (Los Angeles, CA)
Age: 27 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 20/20
Statement of Opinion:
- I don't think our restaurant will benefit much since we bounced back pretty fast.
- It doesn't affect me directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 6 |
Chef (Austin, TX)
Age: 62 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 4/20
Statement of Opinion:
- I see this as beneficial for smaller or struggling operations, but not for ours.
- We didn't really need much help during the pandemic as we adapted quickly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 7 | 7 |
Restaurant Owner (Chicago, IL)
Age: 39 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Every bit helps, but it might not be enough to cover our debt.
- I'm hopeful but cautious with my optimism.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Line Cook (Seattle, WA)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- The tax credit would likely pass over my establishment since our operations remained functional.
- I'm glad it's going to help others though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Cafeteria Worker (Dallas, TX)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 18/20
Statement of Opinion:
- If our cafeteria gets this type of credit, maybe they'll increase our hours.
- It would definitely improve things for me if implemented.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Restaurant Supplier (Phoenix, AZ)
Age: 48 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- While it's aimed at restaurants, it might indirectly benefit us through higher demand from healthier businesses.
- The right policies become catalysts for a lot of positive chain reactions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Barista (Boston, MA)
Age: 22 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- A lot hinges on us getting this credit - it could mean keeping my job here.
- It's a stressful situation, thankfully this helps.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Cost Estimates
Year 1: $4000000000 (Low: $3000000000, High: $5000000000)
Year 2: $4000000000 (Low: $3000000000, High: $5000000000)
Year 3: $4000000000 (Low: $3000000000, High: $5000000000)
Year 5: $3800000000 (Low: $2800000000, High: $4800000000)
Year 10: $3500000000 (Low: $2500000000, High: $4500000000)
Year 100: $2500000000 (Low: $1500000000, High: $3500000000)
Key Considerations
- Only applies to 'certain' restaurants, meaning not all will be eligible or benefit equally.
- Effectiveness depends on the ability of eligible restaurants to claim and benefit from the credit.
- Administrative considerations for claims and potential for fraud or misuse need to be addressed.
- The credit is a temporary measure aimed at immediate post-pandemic recovery, not a long-term solution.