Save 75% - Only $49.99 for 1 full year! digitalPLUS subscription offer ends 12/1
NewsOpinionOp-Eds

Cut food subsidies for wealthy CEOs, not needy families

Laws and LegislationBusinessSupplemental Nutrition Assistance ProgramCorporate Officers

Congress seems to be focusing its austerity efforts on America's most vulnerable citizens, including those who need help feeding their families. Meanwhile, large food subsidies that benefit the most affluent Americans aren't even on the table.

The House of Representatives recently voted to cut $4 billion a year from food stamps, known more formally as the Supplemental Nutrition Assistance Program (SNAP). A cut of that level would mean 3.8 million Americans would lose the help they receive to put food on their families' tables, according to the Congressional Budget Office. Democrats have resisted that effort, but with President Barack Obama's call for Congress to turn its attention back to passing a farm bill in the wake of the recent government shutdown, the level of food subsidies will once again be at the center of debate.

What nobody in the House is talking about, though, is the fact that wealthy corporate executives will continue to enjoy food subsidies of another sort. When CEOs of major corporations host business dinners at 5-star restaurants, they get to deduct that expense from their income taxes.

Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax law allows companies to deduct half of the cost of business meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner for 10 people provides more public food assistance than the $279 an average household receives in food stamps for the whole month.

The IRS doesn't publish data on meal deductions taken by America's businesses. Citizens for Tax Justice, a non-partisan public interest research and advocacy organization, last examined the issue a decade ago and at that time found that food subsidies for businesspeople cost the government $4 billion a year. Given inflation, and a lack of evidence that businesses have cut back on their food and entertainment tabs, it's likely that the cost of this tax break is even bigger now.

Can someone please tell me why American taxpayers should subsidize meals consumed by CEOs and other businesspeople at no risk of experiencing hunger?

Food stamps provide a subsidy of about $1.50 per meal to SNAP beneficiaries. If the same $1.50 per meal subsidy were applied to the CEO dinner party mentioned above, the corporation's tax bill would be cut by $15. That would be 95 percent less than the tax reduction allowed by current law.

Another way tax policies subsidize the food and beverages consumed by affluent Americans is the lavish marketing that pharmaceutical companies spend on physicians. Drug companies annually spend tens of millions of dollars taking physicians on cruises, ski jaunts and other free trips, where they learn about the drug companies' latest products — when they aren't indulging in lavish meals or otherwise enjoying themselves.

In many instances, drug companies spend far more on marketing their drugs than they spend on research and development. All of the expenses of physician trips and other marketing efforts are fully deductible from corporate taxes. For every $10 million a drug company spends this way, taxpayers pick up as much as $3.5 million of the tab.

Why do so many members of Congress feel obliged to curb federal spending for food subsidies for people with bare pantries? Ending tax subsidies for fancy corporate dinners would make far more sense.

Scott Klinger is an associate fellow at the Institute for Policy Studies in Washington.

Copyright © 2014, The Baltimore Sun
Related Content
Laws and LegislationBusinessSupplemental Nutrition Assistance ProgramCorporate Officers
  • 'OUR Walmart' is a union front
    'OUR Walmart' is a union front

    The Friday after Thanksgiving, also known as Black Friday, is reliably one of the busiest shopping days of the year. And, just as reliably, you can expect a group called OUR Walmart, which is financed by the United Food and Commercial Workers union (UFCW), to attempt to disrupt the day with...

  • Cold War all over again?
    Cold War all over again?

    Reading the latest headlines transports me into my childhood, which was spent in a country that no longer exists. I grew up in St. Petersburg, then in the USSR, in the mid '70s and '80s. The Cold War was in full swing. The news stories that involve Russia now are almost identical to the ones...

  • Better management of manure long overdue
    Better management of manure long overdue

    We commend Gov. Martin O'Malley's decision to proceed with science-based management requirements to reduce the significant flow of Chesapeake Bay-choking phosphorus from farmland already saturated with an excess of the nutrient. We fully support the proposal and urge the new governor and...

  • Report concludes Maryland can safely 'frack'
    Report concludes Maryland can safely 'frack'

    Maryland agencies have concluded that natural gas production from the Marcellus Shale by hydraulic fracturing (fracking) can be accomplished without unacceptable risks, but only if a suite of best practices is required, monitoring and inspections are rigorous, and enforcement is ironclad. The...

  • Feed a 'Silent Guest' this Thanksgiving
    Feed a 'Silent Guest' this Thanksgiving

    This Thanksgiving put an extra chair at your table and make room for a "silent guest." That guest can be one of the world's 805 million hungry people.

  • Man's (and woman's) best friend
    Man's (and woman's) best friend

    My friends and I have been saying for years that when it comes to genuine caring, to loyalty and to good judgment, many dogs actually behave better than many people. For example, one cannot buy a dog's love and loyalty with toys and treats, but, sadly, there are some people who can be bought...

Comments
Loading