Former Secretary of Labor Robert Reich writes:
HOW TO DEAL WITH LOW-WAGE EMPLOYERS. I met yesterday with a former executive of a big corporation who had a good idea. Taxpayers spend at least $55 billion a year on benefits (Medicaid, food stamps, etc.) to working people whose employers don’t pay enough to provide them and their families a decent standard of living. So in effect we’re subsidizing these employers – many of which (like Walmart) are large and profitable. His idea was to tax these employers by that amount. It would be easy enough to do since the IRS and the states have the Social Security numbers of all employees who receive these benefits, and can connect them to their employers. Not only would this “lousy-pay” tax be fair to other companies that pay higher wages and don’t get the subsidy. It would also help replenish federal and state budgets. And it would prod these low-paying corporations to raise wages so their employees don’t have to rely on taxpayer-financed benefits. What do you think?
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3 comments:
Why is everything that comes out of this sawed-off, Berkley Buffoon, Robert "3rd Reich" Reich's mouth, nonsense?
Don't like the pay? Move on!
Too easy and simple. Leaves the central government out of it. Something big gov. folks don't like.
How many more government employees would be needed and at what cost to handle the increased workload of these new taxes? Isn't the IRS big enough yet?
Should all jobs (grocery bagger, inventory stocker, cashier, and part time jobs, etc) offer sufficient pay to support dependents?
Should a grocery bagger who has 4 dependents be paid more than a grocery bagger who is single? This is one potential outcome of the proposed tax.
Part of the job problem, as I see it, is some employers are finding it more cost effective to shift their fulltime positions towards part time. It would be more difficult for part time employees to earn a living wage.
The question is not IF there will be benefits, or whether they will be paid for, but WHO will pay them. Should it be working people, or should it be companies that pay their workers less than sustenance wages? Companies could pay workers whatever they wanted, above the minimum wage, but they would be taxed at a level that offset the dependency burden of their employees.
It's a pretty straight-forward computer problem to roughly figure out the costs, and since you are dealing with companies that have assets and markups, and fixed places of business, it's a bit easier to collect.
Will this ever happen? Not likely, but as a tool for getting people to think about how those low-cost goods on Walmart shelves are simply paid for by lost jobs and increased dependency and higher taxes, it's not a bad policy proposal.
And, for the record, Robert Reich is the smartest guy in any room he is standing in. A PhD economist, he has served in the cabinets of three presidents (Ford, Carter and Clinton), taught at Harvard and Brandeis, and is the author of 14 books, some of which have been best sellers. The Wall Street Journal has pegged him as among the top 10 business thinkers in the world, and Time magazine pegged him as among the 10 best cabinet secretaries in the last century. Though only 4 feet 11 inches tall, the man in an intellectual giant, very funny and self-deprecating, and a man of infinite compassion for real Americans -- the folks who have kids, dental bills, and cars that need repair.
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