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The Fighting Hunger Incentives Act: Whose Interests Does it Really Serve?


Last week, U.S. Representative Tom Reed (R-NY) stood in a warehouse full of canned goods and laid out his proposal to help the U.S. put an end to its food waste problems. The Fighting Hunger Incentives Act of 2015, if passed, would change the country's tax code to permanently extend a provision allowing food donations to be written off. Theoretically, this would encourage restaurants, supermarkets, and farms to donate more of their excess food.

On the surface, it seems like a slam dunk. But as is the case with anything in Congress these days, things aren't as cut and dry as that.

First, some specifics: The proposal would allow deductions of food inventory donations of up to 15% of the donating organization's net income. This is an increase from the 10% that was previously allowable. Also, the bill will allow certain businesses to "make assumptions about the cost basis and fair market value of donated food inventory." The main thing is that places with massive amounts of extra food will now have a legitimate (read: monetary) reason for making sure it gets to food banks rather than just ending up in dumpsters. As Reed put it:

Why don't we have a tax policy that recognizes and (provides incentives) to say, 'Why don't we donate that to our neighbors, to the food banks of America, so that they can use that food, rather than putting it in the ground in a landfill?' Use that food where it needs to be utilized best. And that's on the tables of hungry Americans across the country.

The idea is a pretty easy sell, so it's not surprising that it made it out of the House Ways and Means Committee (with a 24-14 vote). According to legislative prognosticators, it's expected to easily pass in the House with bipartisan support. So why is the Obama Administration already threatening to veto it?

A big issue has to do with the massive chunk of money that will be lost in government revenue due to the tax code rewrite. The Joint Committee of Taxation estimates the new code will reduce government revenues by $2.2 billion over the next decade. Without a sum of that size being offset in some capacity, it's gonna get the veto.

Another issue is just who's going to benefit from the tax breaks. Yes, food banks will theoretically have more foodstuffs in their pantries to hand out, but those won't be the only winners:

Joel Berg, executive director of the New York City Coalition to End Hunger, said the bill could provide beneficial incentives for some, but worries that it is not targeted enough. "You need to carefully separate the farmers who would be able to give away more food from big corporations that are just going to get another tax break," he said.

In fact, that higher-income individuals and large corporations will come out of this bill as the winners had the White House on alert last year. See, this isn't the first time Reed tried to pass this bill. Last year, it was proposed and eventually swallowed up in the more exhaustive "America Gives More Act," which included tax code rewrites for other charity donations as well. (That massive super-bill would have added a whopping $16.2 billion to the deficit over the next decade.) While it passed in the House, it died in the Senate, much to the delight of the White House, who recognized that those tax breaks would primarily benefit the rich.

Another reason the White House butted heads against the bill was due to the irony of Republicans trying to solve hunger through tax provisions rather than, you know, programs that solve hunger. For starters, maybe don't cut $40 billion from the food stamp program? Or, as the White House put it more politely:

Congressional Republicans have let other tax provisions that directly benefit the poor, including improvements to the Earned Income Tax Credit, the child tax credit, and education tax credits, expire.

That said, the bill isn't a completely horrible thing. Any program attempting to find a way to turn wasted food into consumed food is worth pursuing. Perhaps a few tweaks are in order to get it past the veto; putting small farms into different categories than billion-dollar corporations is a good start. But the fact that the conversation's happening at all is a step, if not a leap, in the right direction.

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