The particular service I want to look at is food (though I think the same ideas should apply to all services). So Let's say that a Google employee spends a dollar on food, purchasing groceries. They got that dollar through working for Google, and their income is taxed, so lets say getting that dollar required $1.3 in income. But if Google bought the groceries for them (I'm aware this isn't how Google's food is provided), it would require only $1 in expenditure from the company. The missing $0.3 in income tax would simply disappear. I believe this is how healthcare for employees works as well.
Is this right?
If it is, why is it that extensive services are provided by high margin companies competing for talent, rather then lower margin businesses looking to boost their profits by reducing their expenditures on employees (by cutting out the government)?
For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$.
The lower the margins of the business and the more (in percentage of fixed costs) the company spends on employees, the greater the increase in profits these savings enable.