Not all employees will want massages anyway (but of course will happily take the raise
And not everybody will choose to eat in the cafeterias, but of course will happily take the raise, too. So why doesn't Google simplify *everybody's* life, and simply give everybody some extra money in their paycheck, and begin charging for these services? The employees benefit (those who want to use them don't have any net loss, while those who don't want to use them can use the money on things they value more), and Google benefits in not having to go through all the tortuous process of having to account for these things
It's not the IRS' job to make sure that Google gets to save a few bucks on offering services instead of additional pay because they're banking on the fact that some % of their employees won't take advantage of those services.
So what? Google's paying taxes to buy the food, they're paying payroll and FICA and other taxes for the employees working at the cafeteria, they're just making it more efficient by not giving a bunch of money to some third-party vendor to use as profit, by doing it in-house. They also give other valuable benefits that are untaxed, such as free parking. Why should free parking be exempt, and not free lunches? Why not free bus fare?
I don't get to claim a tax deduction when I buy food in the cafeteria at my work, yet my company still "pays taxes to buy the food, pays payroll and FICA and other taxes for the employees working at the cafeteria," so why, exactly, should Googlers be exempted from paying taxes on the money they buy food with? That's the essence of what we're talking about here, and it's a question that NOBODY has answered in any way other than "but I like Google!"
As for bus fare - the IRS allows for numerous transportation benefit exemptions, including bus / mass transit fares, parking, bike commuting, and ride-sharing. These programs are ALSO generally exempted up to the $240 dollar per month amount. In cities where parking is expensive, it's quite common for employers to offer mass transit benefits - bus, subway, commuter rail, ferry, etc. (An "Unlimited 30-day" MTA card in NY will run you about $115 a month, well under the $240 per month limit. I'm sure there are still companies that offer parking stipends as well, even in New York - many of them probably cap the benefit at $240, to keep the benefit non-taxable, so the employee has a choice: keep driving & parking (and pay the difference between stipend & fees out of pocket), or take the subway. There are plenty of tax-exempt fringe benefits your company can offer instead of / in addition to a parking program. In most areas that are not smack in the middle of the business district of the closest city, on-site parking is the fringe that makes the most sense, but it's not the only one the IRS allows.
When the meals are provided every day, all day, for free, using expensive ingredients, and for the purposes of retention, goodwill, morale, and attracting new hires (the food is featured prominently in lots of their recruiting materials), it is not exempt, and is considered compensation, and thus taxable. Again, this doesn't seem unreasonable - everybody MUST eat, and their other alternatives would be brown-bagging it, or spending money on restaurants in the area. They don't have to spend on either of those, and instead can eat on site free of charge. Since this has the net effect of putting more money in the pockets of employees, Google has provided them with a significant (4000-5000 could easily be an effective 4-5% raise) additional source of income.
And this is precisely the point of my whole argument: the tax code needs to be simplified.
s/simplified/modified to provide specific benefits to Google, because they're cool and stuff./g.
THAT is the essence of your whole argument. People everywhere are expected to pay taxes on income, with a fairly narrow set of exceptions for perks that are exempted. $4000-5000 / yr worth of meals and free food qualifies as income no matter how you want to slice it - it'd easily cover yearly groceries for a typical person who isn't pinching pennies when they buy food - averages published by the USDA suggest the average grocery bill is topping out around $360 per month for a single person.
The IRS has created specific exemptions for fringe benefits that don't include this type of meal program - it sucks for Google if that somehow makes them spend more money to administer the program differently, but bear in mind that "it's cheaper for Google to do it this way," really is an argument that says "Google shouldn't be expected to pay the same taxes everybody else has to, they should be allowed to ignore the law if they like." Whether or not the law *should* be simplified, it is NOT simplified today - and so Google should be in compliance with it while they use some of their considerable lobbying power to buy new laws -- that Google "doesn't like the law as it stands today" is not sufficient grounds for them to ignore it.