The U.S. Senate Committee on Finance is considering a bill that would penalize business owners for hiring employees using federal entitlement programs, by increasing the corporate tax rate paid by owners to offset the value of welfare consumed by employees.
Senate Resolution 3410 (S.R. 3410) would apply to employers with more than 500 workers, levying “a tax equal to 100 percent of the qualified employee benefits with respect to such employer for the taxable year,” including food stamps, government-provided meals for schoolchildren, housing subsidies, and Medicaid.
The bill, officially titled the Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act, named after Amazon.com founder and chief executive officer Jeff Bezos, was introduced by U.S. Sen. Bernie Sanders (I-VT) on September 5. The Finance Committee has not yet scheduled debate on the bill.
Edward Hudgins, director of research for the Heartland Institute, which publishes Budget & Tax News, says it’s important to remember jobs improve people’s lives.
“There are a half-million people working who would not be working today, thanks to Jeff Bezos and to Amazon,” Hudgins said. “You can say the same thing for Wal-Mart. You can say the same for many, many other businesses. They’re the ones who create the jobs. What do these people get from people like Bernie Sanders? They get envy-driven desire to loot and to steal what they cannot create.”
Hudgins says the private sector provides real solutions to people’s problems.
“Bernie Sanders and politicians create nothing of value, except for minimal law enforcement and enforcement of contracts,” Hudgins said. “It is people like Jeff Bezos, Steve Jobs, and Bill Gates that start with zero. They start with nothing, have a vision, and build it.”
‘There Should Be Statues’
Hudgins says Bezos and other successful business owners should be celebrated, instead of targeted by politicians.;
“Amazon, as well as Walmart, as well as all these other companies, should be celebrated,” Hudgins said. “There should be statues built to these wealth-creators. Instead, you have people like Bernie Sanders who want to penalize them for creating wealth.”
Good Intentions, Bad Idea
Adam Michel, a policy analyst with the Heritage Foundation, says the intentions of the bill’s sponsors may be good, but that’s the only positive aspect of the proposal.
“They seem to be saying that the welfare state is much too large and accessible to people who don’t need it, and the bill is trying to take some of that back,” Michel said. “The intention, as with most liberal policies, seems to be a good one: they want businesses to step up to the table, to not have their workers rely on these programs, but when you start thinking about the consequences, it can be pretty perverse.”
Michel says the bill would reduce businesses’ incentive to help people get out of poverty.
“It essentially would penalize any business that is trying to hire low-skilled or low-income employees, simply because the government has such generous benefits,” Michel said. “They then tax companies that are trying to hire and give folks a job that fits that criteria.”
‘Who Drove Up Those Costs?’
Hudgins says politicians such as Sanders typically create the problems they say they wish to solve with the power of government.
“Who created the welfare and the redistribution?” Hudgins said. “It was people like Bernie Sanders. Who drove up the cost of medical care? It was the government, it was people like Bernie Sanders. He complains, and he says corporations should be taxed at 100 percent over a certain amount, to make up for the fact that the government has to pay Medicaid to poor people. Who drove up those costs? Just take a look at the last seven or eight years under Obamacare. It’s clear. It’s documented.”
Hudgins says every good or service the government has used its power to make more affordable has become less affordable.
“Take a look at things like internet access, computers, televisions, virtually any kind of consumer goods, even food,” Hudgins said. “You take a look over the last twenty to thirty years, and you see that it’s either stayed steady or gone down in real, inflation-adjusted costs. Then you look at health care and education, and the costs have skyrocketed. Those are the two areas where government has been most involved.”