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The cost of the lunch is $10, but is the value to the employee $10? The problem with taxing a product is that the actual value is unknown. In your example, tax
by BrianEatWorld 14y ago
The cost of the lunch is $10, but is the value to the employee $10?
The problem with taxing a product is that the actual value is unknown. In your example, taxing the lunch as $10 of income is actually giving the benefit to Company B due to the "reverse inequality of exchange". IE if you buy a $10 lunch, you actually value it more than the $10.
- anthonyb 14y agoYou could say the same thing about $10 - the value of a $10 note to (eg.) a millionaire is a lot less than it is to most people. If the employee is hungry, then they'll value lunch more. For accounting purposes though, it's $10.
- rverghes 14y agoSure, but the cash has the value of being flexible. For example, if you were looking to save money, you could brown bag a lunch from home and pocket the extra $10. That flexibility might be more valuable to the employee than the nice lunch.