If there’s one thing a politically riven nation can agree upon, it’s that there’s never been an election quite like the one wrapping up Nov. 5.
A major political party has never before changed candidates midstream, to cite just one bit of historical significance. Nor has either put up a convicted felon as its standard-bearer.
Add in the stump-speech references to cannibal extraordinaire Hannibal Lecter and the back-and-forth about pets being eaten, and we have a race just one trapeze act short of a circus.
The sideshow antics have complicated assessments of how each candidate aligns with the needs and preferences of the restaurant industry. Both have offered a pie-in-the-sky promise to end taxation of tips, and the Democratic hopeful has called for ending the national tip credit, surprising no one. Yet little else with unique relevance to the business has been served up by either contender.
They seem more preoccupied with debating whether Democratic Party nominee Kamala Harris actually worked at a McDonald’s in her youth, as if that figures into which candidate is better qualified to hold the nuclear codes.
But the meaty issues are there. The posturing and sniping just have to be ignored to see them.
Here’s a look at the matters that could make life better or worse for restaurateurs post-election, and where Harris and Republican Party hopeful Donald Trump stand on each.
Tax reform
More than 30 provisions of an omnibus 2017 tax bill will sunset at the end of 2025, including several that extend breaks to restaurants and other businesses. Right now, for instance, certain employers can qualify for a tax credit if they pay employees taking sick leave. That and a host of other measures will lapse, all but guaranteeing comprehensive new tax legislation will be taken up in Washington, D.C., by the next Congress and administration.
It’s arguably the most important issue pending for restaurants this election cycle, according to veteran industry lobbyist Franklin Coley. Yet that significance isn’t reflected in the amount of attention the presidential candidates have given the matter. Hannibal Lecter may have gotten more mentions.
The measure that will expire is the Tax Cuts and Jobs Act (TCJA), a signature achievement of the Trump administration. Trump has said he’ll renew the tax bill he midwifed during his administration, though with a few tweaks. For instance, the current income-tax rate for corporations is 21%. The former president said he’d drop the levy to 15% for businesses that produce their products domestically, and to 20% for all others.
Harris has pledged to raise the rate to 28%. She’s also promised to discourage stock buybacks by raising the tax rates on those transactions fourfold, to 4%.
But she’s prompted a thumbs-up from the industry for a proposal aimed at helping entrepreneurs start restaurants and other small businesses. The vice president has proposed hiking the standard tax deduction for startups to $50,000, or 10 times the current $5,000 write-off.
The suggestion drew praise from the National Restaurant Association, though the watchdog group has also called for extending a number of TCJA provisions, including a write-off on interest expenses and an accelerated depreciation schedule.
Harris has also pledged to slash the regulatory red tape that can delay a business launch, but has not revealed how she intends to do it.
A tax break commonly used by restaurant employees is the Earned Income Tax Credit, also a part of the TCJA. Harris has promised to reinstate the measure, which extends a credit to low-income workers who have children.
Both candidates have proposed ending the federal taxation of hospitality workers’ tips as income, but most analyses conclude the move is fiscally unrealistic. Tax revenues would drop precipitously, with no clear alternative for making up the loss. Tax Foundation, a research firm, has estimated that ending income taxes on tips would cost the federal government $107 billion over a 10-year stretch.
In any case, Coley said during the most recent podcast from his firm, Align Public Strategies, any tax reform measures would have to be ramrodded through Congress, and it’s not clear how receptive the legislature might be. There’s not even a consensus on which party will end up in control the House of Representatives or the Senate. “I have no idea,” Coley acknowledged.
Inflation
Harris has made inflation reduction a key plank of her campaign platform, but the Democrat has not aired many details about how she intends to do it. The big move she’s promised is putting a federal law on the books that embodies the anti-price-gouging regulations in place within 37 states.
But most of those measures deal with retailers and wholesalers hiking prices during crisis situations where consumers have little leverage to resist being gouged, like during a natural catastrophe—hotels jacking up room rates for evacuees from a hurricane, for instance. But it’s not clear how she intends to hold or hammer down high prices of day-to-day essentials like food.
Her limited comments on that specific item have so far only addressed grocery prices, with no mention of menu charges.
Trump, a candidate hardly renowned for his reserve, is promising to end inflation outright. But he’s said little about how he’ll curb food costs. His official platform states only this: A Republican administration will “promote Economic Policies that drive down the cost of living and prices for everyday goods and services.”
The policy preview does offer a specific on bringing down housing costs, an issue that affects the industry tangentially because the workers in some restaurant markets can’t afford to live there. The former president intends to push through tax breaks to help first-time homebuyers afford a place; to cut the red tape that can drive up developer and builders’ costs; and open some federal lands to residential development.
Trump has also pledged to bring down the price of gasoline and heating oil by stepping up domestic production of fossil fuels. Or, as he puts it in his speeches, “Drill, baby, drill.”
But he’s also championing tariffs on most imports. In his speeches, he’s promised hiking the charge of goods from overseas anywhere from 10% to more than 300%. If he’s elected and able to convince Congress to levy the charges, restaurateurs would pay more for all supplies brought into the country.
Regulation
Trump’s fundamental goal as president would be to restore common sense to government, according to the official GOP platform. A big part of that, it stresses, would be eliminating federal regulations “that stifle Jobs, Freedom, Innovation and make everything more expensive.”
The former president showed during his administration that it’s no empty promise. During that four-year stretch, the hotelier slashed or rewrote a number of regulations the restaurant industry found irksome, including the rule determining when employers could impose a tip credit while paying servers, bartenders and other employees who regularly receive gratuities.
The Trump administration replaced the so-called 80/20 rule with a guideline welcomed by the industry as being simpler and more sensical. Essentially, it set four questions for determining when tipped workers were entitled to a full cash wage and when a portion of their tips could count toward the minimum pay they’re due.
The Biden administration reinstated the 80/20 rule with a twist blasted as being even more burdensome for employers. That 80/20/30 guideline was recently vacated by a federal court, but no regulation has been put forth to replace it. None is expected until a new president is in the White House.
The franchise community has championed the other half of the Republican ticket, vice presidential candidate J.D. Vance, for opposing certain franchising regulations in particular. In a highly unusual move, the International Franchise Association endorsed Trump’s selection of the Ohio senator as his running mate because of what it characterized as his pro-franchising stance. In particular, it praised Vance’s opposition to regulating franchisor and franchisee as joint employers equally responsible for the treatment of licensees’ staffs.
Harris says she’ll cut the red tape that can delay the launch of a small business, but did not reveal her intended means.
Wages and benefits
Harris has called for increasing the federal minimum wage, which has been stuck at $7.25 an hour since 2009. She’s also taken up organized labor’s call for disallowing employers from paying tipped workers as little as $2.13 an hour if gratuities bring them up to the $7.25 threshold.
The Democrat also supports a federal requirement that most employers provide paid medical and family leave.
Trump and his party have made no official statements on the issue.
Immigration
Restaurant employers are unlikely to swoon over either presidential hopeful’s plan for immigration reform. Both of the proposals aim to more firmly regulate the inflow of what the industry has traditionally viewed as potential new job candidates, not to ease the new arrivals’ transformation into documented restaurant workers.
Harris has said she’ll resurrect and push the bill that was hammered out at the beginning of 2024 to address what both parties have acknowledged is a crisis at the border with Mexico. It created a mechanism for halting the influx of migrants when the volume threatens to overwhelm the system for considering their requests for asylum in the U.S. The most relevant components for employers were the provisions intended to streamline the process for immigrants to become U.S. citizens and sanctioned additions to the labor pool.
Prominent Republicans played a key role in drafting the legislation over a four-month stretch, but their party nonetheless voted down the measure. According to accounts from both parties, Trump asked his fellow Republicans to kill it because it would rob him of a key campaign issue, the mess at the border. Neither the Republicans nor their standard-bearer deny it.
The Republican candidate has repeatedly pledged to seal the southern border and ship all undocumented immigrants back to their homelands in what his party predicts will be the largest deportation program in American history.
Unionization
Facilitating the unionization of American workers has been a central plank of Harris’ campaign platform. She’s vowed to support several monumental pro-union bills the industry has vehemently opposed with success, including the much-hated PRO Act.
The measure—technically the Protecting the Right to Organize Act—would redefine what employers can and cannot do if they face a union drive like the one that has turned 500 Starbucks units into union shops. For instance, an employer couldn’t require employees to attend a meeting where the benefits of remaining union-free are aired. It would also ban so-called right-to-work laws, the state regulations that exempt workers who choose not to join a union from having to pay dues because a majority of co-workers opted for representation.
The election process would also be simplified; employees could use their phones to vote on whether to unionize.
Harris has already shown she has a close relationship with the two biggest unions of restaurant workers, Here United and the Service Employees International Union. She’s pledged to support the latter’s call for ending the tip credit.
The words “union” and “labor” are not mentioned even once in the Republican Party’s campaign platform.
Courtship of the industry
In what’s likely a first, both presidential candidates have reached out more to restaurant workers than to their bosses. But the reverse still wouldn’t have drawn an endorsement for either contender from industry representatives like the National Restaurant Association.
The national group has a policy of not choosing a horse in the race for the White House, focusing instead on congressional contests with implications for the business. Its state affiliates concentrate their campaign contributions on influencing local contests with import to the trade.
“We’re going to have a seat at the table irrespective of who wins on election day,” Sean Kennedy, EVP of public affairs for the association, said in an interview with Restaurant Business.
As for predictions, the industry’s chief lobbyist isn’t about to make any. “What we look at is the overall trends line,” he says, speaking of what off-year and other past elections have revealed.
The one overriding takeaway: It matters, deeply. Says Kennedy, “The person who controls the White House controls every piece of legislation that comes out of Congress. It’s going to have an immediate impact on the operation of restaurants.”