As you may know, here in Silicon Valley the latest thing is for companies to provide all their employees with free lunches (and often breakfast and dinner too). I think Google was the first to do this, and Facebook followed them, and now even small startups bring in a catered lunch every day, or even hire their own chef. This week the WSJ reported that the IRS is looking into whether this perk should be taxed like most employee perks are. After all, the IRS thinking goes, this is effectively compensation.
I’m no expert on tax law, so I can’t really say whether these lunches should be taxed or not. The way the WSJ laid out the issue, it certainly seems like taxation is the legal path, but the article may have not framed the issue properly.
But one of the arguments that tech companies are making is that the lunches aren’t compensation, but an essential part of the collaborative culture of Silicon Valley. As one tax attorney put it, “there are real benefits for knowledge workers in having unplanned, face to face interaction.” This is complete crap.
Can anyone say with a straight face that it’s essential for an engineer to run into a marketer at Facebook, but that doesn’t matter at Procter & Gamble, or at Caterpillar? That somehow cooperation is more impactful at technology companies than other companies? Sheer idiocy. Having interaction between various constituents of a company is valuable no matter what the company does. To claim that somehow it’s different in Silicon Valley is just the height of hubris.