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Free food is literally consumption, and falls within the umbrella of the tax. Heretofore, it has been ignored as de minimis, but the principle always applied. E.g. if companies could get away with giving non-cash compensation like cars on a non-taxable basis, they would.
It's a marginal cost per day/month, and frankly speaking, most of the people at the company can afford it.
Is there anything this country does not want to tax?! How much more burden can we take?
This is not something new the government is taxing, it's just extending the income tax from 'all income paid in money' to 'all income paid in money, goods and services', which is reasonable since money is just a proxy for 'all the things you buy with money', like food or gym memberships.
Im a right leaning, financial conservative libertarian, but gosh. I am impressed.
Food at work makes work more efficient. It may be a perk, but it's less portable than getting paid the street value of whatever food is provided. You can't take it with you, or use that food to earn interest, nor can you get it if you're not at work. You don't get to pick what food gets served or how much it costs, nor can you refuse it in lieu of cash.
There are valid arguments for taxing perks, but it's a tricky issue.
Is there anything this country does not want to tax?! How much more burden can we take?
This is not something new the government is taxing, it's just extending the income tax from 'all income paid in money' to 'all income paid in money, goods and services', which is reasonable since money is just a proxy for 'all the things you buy with money', like food or gym memberships.
The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.
> The IRS taxes compensation. source? genuinely curious if those words are written somewhere. It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes). I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.
The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.
> The IRS taxes compensation. source? genuinely curious if those words are written somewhere. It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes). I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.
IRS Publication 525 -- "In most cases, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options."
It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes).
I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.
You can't send the IRS 40% of a fully paid vacation to Hawaii, including use of the corporate jet either. Should companies be able to give their employees such vacations without out the employee being required to pay taxes on the value?
Think about what incentives that would create -- individuals could evade taxes altogether by simply negotiating with their employer to provide whatever goods and services they wished to consume rather than money. And because such benefits wouldn't make up part of the AGI the individual would also be eligible for government social programs.