Pigeon with wild mushrooms, duck with figs and rabbit pate' could become endangered species if a portion of the Treasury Department's proposed tax simplification plan is adopted.

The dishes are specialties of Le Lion D'Or, a Connecticut Avenue restaurant where the price of a dinner entre'e tops out at $35 -- or $10 more than the tax-deductible limit for an entire dinner that was proposed by Treasury in the tax plan unveiled last week.

Over at the Vista International Hotel on Thomas Circle, an "oyster sampler" appetizer is $8.75, stuffed rack of lamb is $24.50 and an "American dessert" is $3.50. Prices are a bit lower at Duke Zeibert's, where an evening's steak or fish won't cost much more than $18. Per person.

Downtown diners eating on expense accounts don't blanch at these prices. A $100 lunch that can be written off the taxes of an executive or a corporation is considered a lunch well spent. Those who eat, those who serve and those who write off understand that the tax-deductible business expense is the sine qua non of pricey restaurants.

The Treasury Department's plan would change all that. If the proposal is enacted, deductions would be cut to only $25 for a dinner, $15 for a lunch or $10 for breakfast. Per person.

It doesn't take a calculator to figure out that business would have to pick up the tab for just about everything but the water and the entre'e under these restrictions -- if employes continue to eat high-priced meals.

"So you say to some lobbyist or some Senate staffer, you can have the veal or the good wine, but not both. And while we're talking appetizers, let's talk dessert," said Frank Mankiewicz, executive vice president of Gray & Co., a public relations company.

"People don't want to conduct business in Roy Rogers," said Mo & Joe's Mo Sussman. His response to the Treasury plan was typical of downtown restaurateurs, whose reactions differed primarily by degree: from slow burn to outrage.

Sussman said his best three days in the restaurant business occurred during last week's convention of "25,000 radiologists, who packed the restaurants and hotels. . . . It wouldn't have happened if it weren't all tax write-off-able."

"Restaurants cannot survive on kids going to high school proms," Sussman said.

Trying to raise federal revenue via business meals is like "hitting a gnat with a sledgehammer," said Duke Zeibert, who argued that the measure would produce little revenue.

"We've really gone through this once before," said Marshall Coyne, owner of the Madison hotels, who -- along with Zeibert -- has weathered attempts by previous administrations to limit the "three-martini lunch." Even if deductions were limited, Coyne said, "meals would still be an avenue of getting new business. You have to spend money to make money. If the government takes part of it, so be it."

But restaurateur Mel Krupin, who estimated that more than half of the customers at his Connecticut Avenue establishment are eating on expense accounts, echoed another, more general reaction: "I don't think business executives would use the time to go out for lunch because it would come out of their pockets."

The National Restaurant Association holds the same view. "Many restaurants would simply go out of business because the reduction in sales would be too great," said Jeff Prince, the group's senior director.

Treasury's proposal notes, in fact, that "the demand by businesses and certain executives for expensive meals . . . would decline."

The department's argument against business meals comes down hard on the expense-account patron, pitting him against "the typical taxpayer, who does not have access to business perks." The business meal is listed as a "tax abuse" and is targeted for the chopping block alongside "deductions for seminars on cruise ships."

The implication that legitimate business is not usually conducted over food caused all affected parties to bristle.

"Although it's a very visible thing, people tend to look at business meals as a tax loophole," said David Romm, food and beverage manager at the Vista hotel. "If you really look at legitimate business meals, there's a lot of business taking place."

The Treasury Department argues that, while current law allows some business expenses to be deducted, "others are improperly claimed as deductions, both by unscrupulous taxpayers and by generally honest taxpayers who give themselves the benefit of the doubt in marginal or uncertain cases," with the government picking up the tab.

Whether business is done or not at meals claimed as a business expense, they are big business. The business-meal sector accounted for $24.7 billion in volume last year, according to the National Restaurant Association. A study done for that group by Chase Econometrics found that limiting the deductibility of business entertainment to 50 percent (from its current 100 percent level) would result in a net loss of $3.7 billion in federal revenues in 1985 and a loss over three years of $14.8 billion in taxes paid by people who derive their income from restaurants and in transfer payments required to make up for lost income.

The Chase study showed that 910,000 jobs would be lost in the entire economy -- not just in the food services -- in the first year, and the unemployment rate would rise over three years by 0.7 percentage point.

"Anytime you talk about the three-martini lunch, there's another group that's going to be affected, and that's the waiters, the waitresses, the busboys, the cooks, the entry-level jobs," said Mankiewicz.

The Treasury plan maintains that restaurants would cut their prices if their tables weren't getting filled. "The price of such services and goods would also tend to decline, benefiting the typical citizen who is unable to obtain a subsidy for consumption expenditures by characterizing them as business expenses."

But several restaurant owners protest that their prices are pegged to real estate costs. "If the landlord would cut the rent, I would cut the prices," said Mel Krupin.

Some indicated that, if pushed, they could feed their customers Treasury's $10 breakfasts and $15 lunches. But $25 dinners are considered out of the question. Sussman was in the majority when he said, "That is maybe acceptable for breakfast, maybe for lunch, a disaster for dinner."

One solution to the proposed limits on the cost of business meals is the business breakfast, a trend some restaurant owners claim already has begun to happen. At the Four Seasons Hotel in Georgetown, for example, the breakfast business is up sharply. This increase comes on top of the hotel's luncheon traffic, which is estimated to be 80 percent business-oriented.

"Whether it's cost or expediency, we've seen an abrupt transfer" to breakfast, said spokeswoman Sharyn Thomas. "It's part of a trend for briefer meetings over lighter meals. The proverbial three-martini lunch with extended cigar-smoking is no longer happening."

There were some restaurateurs who said such a change wouldn't affect their business. Maison Blanche maitre d' Georges Torchio said his business customers might be asked to "slow down" on their expense accounts. "But if they're talking about a contract of $1 million, or if a lobbyist is talking to a senator or congressman," the meal just gets added into the $1 million.

Others only hinted that they might be able to adjust. "I'm a flexible guy. I say this now, but I'm going to go with the wind. I have to pay my bills," said Zeibert.