I live in the business world and I'm generally with RayClay on this. I've seen so much waste (not from my company, of course) that it's sickening.I have seen companies buy season tickets for various sports and they end up giving 90% of them to their own execs as a sort of tax-free benefit without any real benefit to the company or anyone else. There is no way that it should all be deductible.
I understand your point, but it is also the same thing as employee benefits.
If my company purchases Patriot tickets to give to my employees as a perlk, that is just as legitimate an expense as increasing the company portion of health insurance premuim, subsidizing the company cafeteria to keep costs down, or paying for a coffee service for employees.
It may be debatable which use of corporate money for which gain in 'corporate good' is best, but ultimately that is up to the corporation, and a tax policy that dictates which uses of money for marketing expense or employee benefit is truly the government sticking their nose where it doesn't belong.
Business expenses are ALL treated the same way. To single out some vs other as illegitimate is dnagerous territory for our government to get involved in.
We could easily say that onsite child care should not be an allowable expense written off against revenue, because it is available elsewhere. That would be somewhere down the slippery slope you enter by making judgment on whether entertainment is a legitimate expense to a company who clearly feels that it is and spends their money to prove it.
We can be clear that the idea they would spend it to deduct it is silly, because even in a 50% tax bracket, not spending $1,000 and keeping it is better than spending it and reducing your tax burden by $500.