Tag Archives: taxpayer subsidies

Subsidizing the Rich

Lawmakers and pundits continue to beat up on poor folks. The latest effort in Indiana is Democrat Terry Goodin’s proposal to drug test welfare recipients–never mind that such efforts elsewhere have been a colossal waste of money, since savings from the minuscule number of abusers haven’t begun to offset the costs of testing everyone getting benefits.

As I noted in an earlier post, it’s all about shaming and humiliating the “takers.”

But here’s what drives me up the wall: we not only don’t shame those who are ripping us off for more money than welfare recipients could ever dream of, we admire them. We accord them (undeserved) respect, because we think they’re smart businesspeople!

Once again, an academic study has documented what we all know: low-wage business enterprises depend upon taxpayers to support their workers and give them an unearned competitive advantage.

U.S. taxpayers pay roughly $153 billion each year to supplement employers who refuse to pay a livable wage, according to report published Monday by the University of California, Berkeley, Center for Labor.

As the Minnesota Post has noted,

The study most likely understates the degree to which taxpayers subsidize low-wage workers. It was limited to the cost of four major public-assistance programs:  medical assistance, food stamps, Temporary Assistance to Needy Families and the Earned Income Tax Credit, a refundable credit to working people with low and moderate incomes.

It did not include the cost of housing assistance, child-care assistance, free school lunches and other programs also available to low income families.

Let’s be clear: there are entrepreneurs and businesspeople who make a lot of money “fair and square.” They don’t offload costs onto taxpayers, either through externalities (dumping pollutants that we must pay to clean up), or paying wages that we must supplement. Those are the good guys, and they’re entitled to enjoy all the benefits their hard work and creativity have generated.

But the so-called “Captains of Industry” who profit at the expense of the public–those whose fat bottom lines depend upon the generosity of taxpayers–are the ones who deserve the scorn that instead gets directed at the single mom who has fallen on hard times, or the factory worker whose job vanished during the last recession.

The real “addicts” are the companies like Walmart and McDonalds whose business models  are dependent upon the drug called other people’s tax dollars.

A lot of us could be successful businesspeople if someone else was paying our employees.