KEY POINTS
House Republicans are considering treating work benefits such as employer-provided transportation, free food and on-site gyms as a new source of taxable income to help pay for President Trump’s tax cuts.
These tax proposals are still in the early stages and other aspects of Trump’s tax promises would help workers, such as tax breaks on tips, overtime pay and Social Security benefits.
The concept of taxing employee perks has been debated before in Congress and never made it far, but with the size of the deficit and Trump wanting trillions of dollars in expiring and new tax cuts, some budget pay-fors will need to be found, and this one would dip into workers’ pockets.
Companies will just get rid of those perks, won’t they?
My assumption is that the employee would pay them, not the employer.
in australia, we call this fringe benefits tax and it’s paid by the employer. it tends to lead to employers giving less of these benefits, which was the point: it raises salary by a reasonably comenceate amount so employees receive actual wages rather than benefits that they have no choice over
interesting side effect is that there’s some FBT stuff that doesn’t apply to charities, so you can do a thing called “salary sacrifice” (which is a well known, approved by the govt thing) where you pay some of your pre-tax salary thereby reducing your taxable income, but the charity doesn’t have to pay FBT. it’s a cheap way of providing charities with ways of incentivising their employees to stay
if you’re interested:
https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax
I’m sure there’s enough companies around who like employees beholden to them on account of granting the privilege of health insurance and the like.