Did you know?
The IRS is considering taxing meal benefits for companies. http://www.mercurynews.com/business/ci_22982220/irs-is-looking-into-whether-free-meals-at
Silicon Valley is correctly labeled the innovation center of America. With companies creating top paying jobs and the best technology software and product in the world, Silicon Valley's progressive corporate culture is the envy of the innovation centers around the world.
Google, Apple, Facebook, LinkedIn, and Twitter are shining examples of how having great employees and benefit programs can lead to out-sized economic and social impact.
One of the key elements of the Silicon Valley culture is the concept of team building and treating employees as family members. Google has famously creating a world class free cafeteria for its employees, and all their employees have done in return is:
- classify the world's information with a simple keyword search,
- build a self-driving car,
- create the world's most popular smartphone operation system,
- offer free email for hundreds of millions of people, and
- manage a video sharing site that servers over 1 billion people every month.
If you ask any Googler, they will confirm that the free lunch program is a huge part of their corporate culture. Ditto at LinkedIn, Yelp, Facebook, and Twitter. So the IRS is considering taxing this lunch benefit for companies. If this tax were to go into effect, the lunch benefit as we know it will begin to disappear from a number of companies. The most successful cash-rich companies will likely continue the lunch benefit regardless of the tax classification. However, the next Facebook or LinkedIn may reduce or remove the benefit. This would mean that the talent wars would shift that much more towards larger corporations, and away from the high-growth companies looking to challenge these giants. Instead of looking to make a few dollars in taxes by creating such an ill conceived tax, this tax will effectively slow down the fast growth engine that Silicon Valley has been for the last half century. The government should be looking at encouraging other regions such as Austin, Boston, NYC, and other up-and-coming innovations centers to take the best practices of Silicon Valley and mimicking these. Programs such as employee stock options and employee benefit programs are part of the Silicon Valley culture and should be encouraged instead of taxed.