Three-martini lunch: ‘It’s unconscionable’: Outrage over the ‘three-martini lunch’ tax deduction in the new coronavirus aid deal

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fskimospy

Elite Member
Mar 10, 2006
88,177
55,741
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interchange said:
The rich people don't "get the money" exactly. They have to actually patron the restaurant in order to receive the deduction. So if they are taxed at 35% and this reduces their tax liability by $1k. All the $1k spent though goes to the restaurant. It's jus that the government gives $350 to the spenders in exchange.
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If those rich people do not alter their behavior one iota they simply get $350 dollars more than they would have had before. It is most definitely just giving rich people money, it’s just that the hope here is that they will spend more because of the tax breaks to an extent that this spending would exceed just direct aid to the restaurants. My point is this theory is dubious.

But it's not trickle down economics because the spending of money here is required in order to get the tax benefit, and it's pure consumption. The rich person receives nothing durable in return.
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It is because it’s giving tax breaks to businesses and corporations with the hopes that they will spend in ways that benefit poorer people/restaurants.

The government could spend $350 and give it to the restaurant directly, but I think they'd prefer the $1k in business. The economic question is whether the additional $175 in deduction is enough incentive such that they actually spend enough at restaurants additionally to make it where the restaurant nets more than getting paid directly.
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Yes, the goal is to incentivize well off people and corporations to patronize restaurants through tax incentives.

If you really wanted to incentivize restaurant patronage you could of course do this by directly subsidizing the checks of the patrons like the UK did - if the goal is to help restaurants and not rich people you could again just effectively ‘give’ the money to the restaurants by picking up part of the tab.

Helping restaurants is not the goal though, or at least not the primary goal. Cutting taxes for the rich is.
 
sdifox

sdifox

No Lifer
Sep 30, 2005
100,988
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How else are they going to celebrate getting a tax cut for owning race horses?
 
Amused

Amused

Elite Member
Apr 14, 2001
57,501
20,099
146
Fenixgoon said:
not only am i shocked, but he's requesting MORE aid? wtf? that sounds like something a real president might do
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Besides the bullshit election denialism at the end, I found myself agreeing with most of that speech.
 
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