Business Insight: Lavish employee perks cost U.S. billions in lost tax revenues

Wednesday, January 6, 2016

Lawmakers never envisioned 21st Century fringe benefits, but that doesn't mean they should be tax exempt

A whole new breed of fringe benefits and lavish employee perks are going untaxed, creating a troubling and costly problem for tax officials and policy makers, according to Rutgers Business School professor Jay Soled.

In an article that will appear in a forthcoming issue of the Washington University Law Review, Soled and his co-author Kathleen Delaney Thomas explain how these lavish perks enjoyed by some U.S. business owners, executives and professionals cost the nation billions in lost tax revenues. In some cases, employers are also using them to minimize their payroll tax obligations.

Professor Jay Soled. Watch the video

Soled and Thomas call for comprehensive reform to 25-year-old laws that never envisioned exemptions on such expensive and extravagant perks as hi-speed internet service and yoga classes.

In a new Rutgers Business Insight, Soled identifies more of the troubling benefits, how they emerged and three options Congress has for addressing the issue. Take a listen.

To read more on the issue, see a piece by Soled and Thomas that appeared last month in Columbia Law School’s Blue Sky Blog and an earlier blog published in Procedurally Taxing.

Learn more about the Rutgers Master of Accountancy in Taxation.

Read other pieces by Soled.

TAGS: Accounting Business Insights Jay Soled Master of Accountancy in Taxation