ENDING TAX DEDUCTIONS FOR DISCRIMINATION

Jun 11, 2003
Press Release

WASHINGTON, DC - A bill introduced by Rep. Carolyn Maloney (NY-14) and Rep. Brad Sherman (CA-27) would eliminate tax write-offs for corporations that use the 24 all-male golf clubs in the United States clubs for business purposes. Martha Burk, Chair of the National Council of Women's Organizations and critic of Augusta National Golf Club for its discriminatory policies, has worked closely with Reps. Maloney and Sherman, and she joined them today to announce the bill's introduction.

"The American taxpayer should never pick up the tab for discrimination of any kind," said Maloney. "This bill sends the message that we are not stopping at Augusta. It is not about ending sexual discrimination at one club, it's about ending sexual discrimination everywhere."

Sherman, who headed the nation's second largest tax agency, the California Board of Equalization said, "this bill is modeled after a California statute that has been working since 1987. Business entertainment should not be conducted at clubs which discriminate. In California, a discriminatory club must print on its receipts 'Not Deductible for California Income Tax Purposes.' Surely, federal tax law would not give a deduction when a white male obtains a business advantage by using a business facility not available to his competitors."

"The recent announcement by Augusta National Golf Club that it has been unable to attract Masters sponsors for the second year in a row clearly indicates that responsible corporations do not want to be associated publicly with clubs that discriminate," said Burk. "But neither should they benefit privately from tax deductions for lavish entertainment expenses incurred by CEOs and their cronies for events at such clubs, which cost the American taxpayer."

Current tax code permits full deduction of business expenses associated with business conventions and accommodations, and it allows for 50% deductions related to business meals - all of which are commonly held at golf clubs.

The bill's authors argue that not only do the clubs' discriminatory policies run counter to numerous court decisions that put equality for all ahead of country club interests, but it also greatly disadvantages women in the business world. Golf and golf clubs are commonly used as a tool for business; the PGA sponsors a program, called "Golf: For Business & Life," that stresses the business opportunities golf provides.

Background on the bill:

CURRENT LAW:

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Current Internal Revenue Code allows business expenses to be deducted from Federal income tax that are associated with private clubs. This includes business related expenses for conventions, travel, accommodations, and advertising. Dues are not deductible. Business expenses that are directly associated with promoting and doing business at these clubs, as well as fifty percent of business meals are allowable.

llows business expenses to be deducted from Federal income tax that are associated with private clubs. This includes business related expenses for conventions, travel, accommodations, and advertising. Dues are not deductible. Business expenses that are directly associated with promoting and doing business at these clubs, as well as fifty percent of business meals are allowable.

THE MALONEY/SHERMAN BILL:

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Denies the deduction for business expenses for use of clubs that discriminate on the basis of sex, race or color, including any amount paid or incurred:

  • to any private discriminatory club
  • for use of services or facilities of any private discriminatory club
  • for transportation, meals, lodging, and other traveling expenses or incurred in connection with use of any private discriminatory club


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Denies the deduction for any amount paid or incurred for:

  • advertising of any event held at any facility of a private discriminatory club
  • advertising for any product or service advertised on broadcast media during or associated with media coverage of any such event


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Defines private discriminatory club as any club organized for business, pleasure, recreation or other social purpose if the club restricts membership or use of services or facilities on the basis of sex, race or color.

Requires receipts for disallowed expenses to carry the printed statement, "The expenditures covered by this receipt are nondeductible for Federal income tax purposes."

SCOPE:

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There are over 3000 private country clubs in the U.S. It is currently not known how many of these clubs discriminate against women. At least twenty-four male-only clubs have been identified in the popular press.

Annually corporations spend untold amounts of money and legitimately expense them as business deductions from Federal income taxes.

In April 2003 alone, major corporations did not participate at all or at prior levels at the Masters Golf Tournament, held at the Augusta National Golf Club, thus not spending and not expensing the millions of dollars they have in the past including: IBM, Citigroup, and Coca-Cola, General Motors, Cadillac, Georgia Pacific, Southern Company, J.P. Morgan Chase, Lucent Technologies and American Express.

Many consumer-oriented companies stayed away from Augusta because they didn't want to risk alienating customers - both men and women - who believe that sex discrimination is intolerable.

CURRENTLY COSPONSORED BY:

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Rep. Carolyn B. Maloney (D-NY); Rep. Brad Sherman (D-CA); Rep. Louise Slaughter (D-NY); Jesse Jackson, Jr. (D-IL); Rep. Zoe Lofgren (D-CA); Rep. Sheila Jackson-Lee(D-TX); Rep. Major Owens (D-NY); Rep. Madeleine Bordallo (D-GU); Rep. Donald Payne (D-NY)

Information on the Equal Access for Membership Resolution Introduced by Congresswoman Maloney

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