No Such Thing As a Tax-Free Lunch At Google? 631
theodp writes "In search of the best corporate cafeteria in the world, Gourmet Live's Tanya Steel visited the Googleplex, where she found Petaluma chicken cacciatore, porcini-encrusted grass-fed beef, whole-wheat spaghetti pomodoro, and Parmesan-creamed onions on the menu in one of the search giant's 25 cafes. So, must all good things come to an end? The WSJ's Mark Maremont reports that it's debatable whether Silicon Valley's daily fringe-benefit meals are taxable, and the issue is now on the IRS's radar. 'What would a food tax on Google's meals look like for the average employee?' Maremont asks. 'Assuming a fair-market value of between $8 and $10 per meal, a Googler chowing down two squares a day could get dinged for taxes on an extra $4,000 to $5,000 a year.' That'd be just fine with UF tax-law Prof. Martin J. McMahon. 'I buy my lunch with after-tax dollars,' said McMahon. 'And I have to pay taxes to support free meals for those Google employees.'"
"Cost the government"? Don't think so. (Score:4, Interesting)
I'm so sick of the expression "cost the government". It's a weasel expression intended to convince people that all money belongs to the government first and they let you have some only after they've spent whatever they want. Bulldinky. Every day you hear about how things have gotten too expensive. Food? Too expensive. Coffee? Too expensive. Air travel? Too expensive. Higher education? Too expensive. Gasoline? Too expensive. Electricity? Too expensive. Insurance? Too expensive. Rent? Too damn high. Healthcare? Too expensive. Why the hell isn't government too expensive? IMHO, if the government got rid of baseline budgeting and actually reduced expenses across the board, those of us who pay for all that crap might not be hell bent on looking for every write-off under the sun.
Re:No you don't. (Score:3, Interesting)
I was a majority owner of a software publishing business in the 80's. After we started making money, I decided to have the company buy health insurance for all the employees including myself. Treated the health insurance as an expense just like every other corporation did.
The difference was I was a majority owner of a privately held corporation. In 1989, the IRS decided that people in that situation should pay income tax on the health benefit. My employees weren't taxed, just the three officers/owners of the company were taxed.
Since we were the owners of the business, we decided to make ourselves whole by granting ourselves a raise equivalent to the tax burden. At the time, the federal tax rate was 36%, State taxes were 9% and social security and payroll added another few percent so we were paying close to 50% income tax. That meant for every $100 in additional tax we had to pay, we had to pay ourselves an additional $200 to cover the new tax. The reason was that when we gave ourselves a $100 raise to cover a $100 in taxes, we now had $100 additional income we had to pay 50% income tax on. Give ourselves another $50 raise and we have to pay $25 tax on that and so on.
There's an aphorism in conservative circles that governments tax activities they don't like and subsidize activities they do like. The IRS is saying they don't like Google employees getting their meals paid for even though Google can make an excellent argument for doing so. Doesn't matter.
The IRS has become so onerous in its demands on small businesses that I eventually threw in the towel even though the business was profitable most of the time. I didn't go into business to work for the government but that's basically what ended up happening.
I'm a tad envious... (Score:4, Interesting)
Who says "No Thanks" to a meal that they didn't have to pay for? Any college student will tell you the best meal they had was "free" not because of the food quality, but because it was free. I'm assuming Google just has a cafeteria that employees can just walk into and get a meal or two during any given day while they are working, and that this is an every day occurrence. I can honestly say, I'm a tad jealous, but I see that as a perk of working for that company. If the IRS is going to tax lunches, CEOs across the nation will have to start paying taxes for their elaborate lunches. But wait, so would every college student who didn't pay taxes on food they ate. Oh and what about all those free day care services some places offer or exercise room, shouldn't those perks be taxable also? Wouldn't this then also impact me going over to a friends house and receiving a meal from a party? I didn't pay for it so I wasn't taxed on it.
This is a slippery slope, and one that if pushed as taxable then it opens up a whole new can of worms. If Google is paying the taxes on the food and upon purchasing the food for giving away, wouldn't taxing the employees be double - taxation?
I'd love it if I could reap such awesome benefits, but I do not begrudge a Google employee from enjoying the perks of working for Google. I'm happy to learn that a company that large is still so generous to their employees.
Re:slow news day? (Score:2, Interesting)
No, it can't be called taxable income, because no employment relationship exists between the two, and the two children are not eligible to pay income tax. So they're safe.
Depends, do you "date" whores? If you buy the meal for her as part of a business relationship, then it might be taxable income for her.
Let me extend your argument, now, so you can see how fucking foolish this line of questioning is:
Are we going to go after CEOs who opt to take their salary in the form of yachts and gulfstream jets, rather than cash?
Employment relationship? Are you fucking stupid? Since when is taxation based on employment only? The government wants to tax any and every transaction where net GAIN occurs. Win the lottery? Pay up. Found hidden treasure in the backyard, pay up. The school children example is absolutely relevant. If a child has a net gain by trading his dessert cup, that's GAIN and therefore technically taxable.
And since when do software engineers opt to take their salary in the form of food? Meals are a fringe benefit designed to keep employees happy. Will you tax free on site gym usage as well? How about fancy, office chairs? Or how about taxing free legal advice that some companies offer? How about taxing employee discounts on the products the company sells? Company holiday parties? Tax that bitch. You know what, you and IRS can go eat a bag of dicks. Stop taxing everything under the sun.
Re:slow news day? (Score:2, Interesting)
A single payer health care system would free employers from the burden of providing health care, allow entrepreneurs to pursue their own business goals without fear of losing health coverage, and provide massive cost savings by allowing everyone to receive preventative care rather than having the 50 million uninsured people end up in the ER once their condition has deteriorated to the point where they can no longer ignore their illness.
The role of an emergency room as a health care center is there because they are required by law to not refuse treatment and that many people somehow figure out how to avoid paying for medical costs. It is skewing the way that people seek health care assistance when
The real "solution" is to simply let doctors be entrepreneurs and for them to charge reasonable professional rates for services rendered in an open competitive marketplace where the patients are the customers. All of the messes in the health care industry are precisely because this doesn't happen and the government trying to meddle into that client-practioner relationship.
Thank goodness engineers aren't paid by insurance companies and government agencies to build homes and businesses.... at least in most cases. Even more so, that such activity is seem as "essential to life" and deemed something that should be nationalized with all engineers encouraged to become government employees.