Masters Week: Augusta National Comes Into Focus Again For Its Discrimination

 WASHINGTON, DC - As The Masters gets underway this week, there is action again on Capitol Hill to end tax breaks for business functions at clubs that discriminate, such as August National. Rep. Carolyn Maloney (NY-14), along with Rep. Brad Sherman (CA-27), today reintroduced legislation that would prohibit businesses from taking tax deductions on business expenses related to discriminatory clubs. Maloney has fought side-by-side with Martha Burk, the Chair of the National Council of Women’s Organizations, to end discrimination at Augusta National and other similar clubs across the country.  

“They say The Masters is ‘a tradition unlike any other,’ but Americans have come to realize that at Augusta it’s a tradition of discrimination,” said Maloney. “The blatant discrimination at Augusta and other clubs on par with it is appalling in its own right. Making taxpayers subsidize discrimination undercuts the equality that we supposedly cherish in America.

Maloney continued: “Taxpayers should know that they are subsidizing business functions at discriminatory clubs - not just during The Masters, but every single day, whether they like it or not. If we don’t end these tax breaks for discrimination, it’s like telling taxpayers that discrimination is acceptable.”

“This bill is modeled after a California statute that has been working successfully since 1987,” said Sherman. “Government should not support business entertainment that is conducted at clubs that discriminate. In California, a discriminatory club must print on its receipts ‘Not Deductible for California Income Tax Purposes.’ Surely, federal tax law should not give a deduction when a white male obtains a business advantage by using a facility that is not available to his competitors.”

“The National Council of Women’s Organizations condemns all companies that participate in these clubs,” said Burk. “We would particularly like the public to know that SBC, IBM, and Exxon Mobile are spending millions of dollars to underwrite the broadcast of the Masters Golf Tournament which showcases a club that discriminates against women, and they will deduct every penny. This is not only an outrage for taxpayers, it is an insult to stockholders, customers, and female employees.”

Congress’s Joint Committee on Taxation has estimated that, over the next 10 years, this legislation would be worth $52 million for the federal government in taxes paid for business functions at clubs that discriminate (http://maloney.house.gov/sites/maloney.house.gov/files/documents/olddocs/FairPlayEqualAccess/091203DiscriminationScore.pdf).

Background on the bill:

CURRENT LAW:
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.

THE MALONEY/SHERMAN BILL:
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

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

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:
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.

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