Rampell: Tax Bezos and help workers, but not with Sanders bill

That means, for instance, that if Medicaid shelled out $15,000 to pay the health bills of a Walmart employee, Walmart’s taxes would rise by $15,000. “The working families and middle class of this country should not have to subsidize the wealthiest people in the United States of America,” Sanders said. “That’s what a rigged economy is all about.”

Which sounds like a reasonable complaint. Big companies and the wealthy aren’t paying their fair share in taxes; many are getting rich on the backs of low-wage workers. But the Sanders-Khanna prescription is not a cure.

The bill would discourage firms from hiring low-skilled workers. That’s a given. But worse, it would discourage them from hiring workers suspected of drawing benefits. These workers come, disproportionately, from some of the most vulnerable populations: families with children, older people and workers with disabilities.

Why would families with children be at risk?

Some of the safety-net benefits included in the bill, such as subsidized school lunches, apply only to children. But workers with children are also more likely to qualify for those that don’t, such as food stamps. That’s because benefit eligibility is determined not only by a person’s wage but also household income and household size.

Programs are structured this way to account for how many mouths a given income is feeding. Now imagine if Stop BEZOS were on the books. For a job that pays $20,000, which kind of worker might employers avoid?

Under this bill, Medicaid-eligible workers with disabilities or other health issues would become thousands of dollars more expensive. Working-age people over 45, who cost Medicaid about twice as much as their younger counterparts, might face even more discrimination in the job market than they already do.

Sensible alternatives

In response to all of this, workers might reasonably choose to forgo benefits that they or their children need in hopes of scoring more job security. Or, because the proposal is tied to a firm’s size, companies could choose to contract out even more of their low-wage work — a phenomenon associated with reduced wages for low-skilled workers.

Perhaps worst of all, as the Center on Budget and Policy Priorities points out, the bill would ultimately create a new corporate constituency to push for cuts to social programs and stricter eligibility requirements. Suddenly, reductions to Medicaid or school lunches would be directly equivalent to a corporate tax cut.

If you want to help workers, there are lots of alternatives less likely to backfire than this. Raise the minimum wage. Eliminate noncompete clauses. Increase other benefits (such as paid family leave). Make it easier for workers to unionize. Of course, these proposals need to be designed carefully, too, to make sure they help more workers than they hurt.

As economists repeat ad nauseam: Incentives matter. No number of strident news conferences vilifying billionaires and big corporations will ever change that.