For many years, Mr. K, the president of KJ Inc., took the corporation’s most important clients to lunch at Al’s Steak House several times a week. However, after the tax law was amended to disallow a deduction for 50 percent of the cost of business meals, Mr. K and his clients patronize this restaurant only once or twice a month. What does this scenario suggest about the incidence of the indirect tax increase represented by the meals and entertainment disallowance rule?
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