By Lambert Strether of Corrente
Here is a summary of the Sanders’ “plan” (which I put in quotemarks for reasons I’m about to explain). Common Dreams:
To Force Billionaires Off Welfare, Sanders Tax Would Make Corporations Fund 100% of Public Assistance Their Low-Paid Workers Receive
Declaring that this ever-growing gulf between the obscene wealth of top executives and the poverty wages of workers—which is hardly unique to Amazon—is morally unacceptable, Sen. Bernie Sanders (I-Vt.) announced on Friday that he will introduce legislation next month that would impose “a 100 percent tax on large employers equal to the amount of federal benefits received by their low-wage workers” in an effort to pressure corporate giants into paying a living wage.
Under the new legislation, “if an Amazon worker receives $300 in food stamps, Amazon would be taxed $300,” the Vermont senator’s office noted in a press release. The tax would apply to all companies with 500 or more employees.
So — and I really didn’t expect to have to put on my yellow waders here — I went to the links supplied for the “press release” by Common Dreams. Turns out the link is to a Tweet. Here is the Tweet:
.@SenSanders introducing bill on Sept. 5 which his office says would establish a 100 percent tax on large employers equal to the amount of federal benefits received by their low-wage workers. This is in response to a petition on Amazon workers pic.twitter.com/qmoHGrc8cQ
— Gideon Resnick (@GideonResnick) August 24, 2018
The tweet — oddly, not from a Sanders staffer, so what was Common Dreams thinking, here? — contains two screenshots of the putative press release, but no link to the actual press release. So I Googled for the first sentence: no joy, as of August 26, 1:31:40PM (here; here). At the same time, I checked the Sanders Senate site’s for a press release; the last press release is on August 13. Finally, I searched the Sanders site for “Bezos”; again no joy. In fact, what we have is an online petitition, a Facebook page, and a video on Facebook and Twitter. Let’s look at each of those in turn, to see what we’re dealing with and to get the current state of play on the record:
First, here is the petition, in its entirety:
Mr. Bezos: It is long past time you start to pay your workers a living wage and improve working conditions at Amazon warehouses all across the country. It is beyond absurd that you would make more money in ten seconds than the median employee of Amazon makes in an entire year.
Meanwhile, thousands of Amazon employees are forced to rely on food stamps, Medicaid and public housing because their wages are too low. I don’t believe that ordinary Americans should be subsidizing the wealthiest person in the world because you pay your employees inadequate wages.
Second, the Facebook page, also in its entirety:
I am introducing legislation on Sept. 5 to demand that Mr. Bezos, the Walton family of Walmart and other billionaires get off welfare and start paying their employees a living wage. Our legislation gives large, profitable employers a choice: Pay workers a living wage or the public assistance programs your low-wage workers are forced to rely upon.The greed of the billionaire class is having an horrendous impact upon our economy and the moral fabric of this country. Together, we’re going to change that.
Third and fourth, the videos, both on Facebook, which sadly I cannot embed (thanks, Mark), and Twitter, which I can:
There is something fundamentally wrong when thousands of Amazon workers are on food stamps while their boss, Jeff Bezos, is the richest man in the world. pic.twitter.com/MmET8n4nGG
— Bernie Sanders (@SenSanders) August 24, 2018
In relevant part:
Meanwhile, Mr. Bezos continues to pay many thousands of his Amazon employees wages that are so low that they are forced to depend upon such as food stamps, Medicaid and subsidized housing in order to survive. And .
So it appears we do not have a “plan”; we have a plan to have a plan. We do have an example of the Sanders “digital media empire” in operation, and very effectively, too, given that the Sanders media operation has induced the normally sensible Common Dreams (and the Daily Beast, too) to treat an unsourced screen dump as a press release, and no, it’s not OK when “our guys” do it. I know actually wanting to see a concrete, fleshed out proposal is Boomer oldthink, but holy moley!
Well. I certainly didn’t think I’d have to start off what I had intended to be a short post with a media critique, but that’s where we are these days. Let me now turn to the problems with Sanders’ plan to have a plan. There are three defects in the idea as presented:
1) The framing reinforces the notion that Federal taxes “pay for” Federal spending, so Sanders traps us in the austerity box;
2) The framing turns public assistance into a public-private partnership, since Amazon would now pay its “fair share” (my shudder quotes);
3) Even if you accept the “pay for” model, only cost of the services conveyed is covered, so the government would still be subsidizing Amazon for administrative costs.
Let’s look at each of these defects in turn.
Federal taxes do not pay for Federal spending, nor do taxpayers.. It is not true, as Sanders says, that “you pay for it.” You don’t. (I’ve helpfully underlined the places where Sanders reinforces this falsehood.) I won’t rehash the fact issue here, since most NC readers are familiar with the debate, but see “Taxes For Revenue Are Obsolete,” Beardsley Ruml, 1946; Ruml was Chair of the Federal Reserve. Unfortunately for us all, the implications of Sanders’ framing are horrific, whether for the left, or liberals of good faith, if any. Joe Firestone at NC on fiscal myths in campaign 2016:
The process of using fiscal myths to undermine Senator Sanders’s message has already begun with an attack by Laura Meckler of the Wall Street Journal on key elements of his program.
The attack was easily turned aside by progressive supporters, such as Gerald Friedman, who showed that the fiscal proposals being criticized as “fiscally irresponsible” were sure to net save at least $5 Trillion, rather than cost $18 Trillion over a decade, as the WSJ was claiming, because they would replace current expensive programs, and deliver huge out of pocket savings for Americans. His views were particularly effective because the WSJ had relied on his study for the data informing its critique.
Apart from Friedman’s decisive critique of Meckler’s article other notable instances of progressive pushback came quickly from James Kwak, Robert Reich, Joshua Holland, Matthew Yglesias, John T. Harvey, (who alone brought a Modern Money Theory (MMT) perspective to the debate), and John Geyman.
An important characteristic of the defenses of the Sanders agenda, with the exception of John Harvey’s, is their emphasis on the point that we can afford Bernie’s agenda because it pays for itself with increased tax revenues from various sources. These defenses are within the neoliberal framework and reinforce that framework. They pay silent homage to the fiscal myth that the Government can only get money to pay for programs by taxing or borrowing, and that this is important because the Federal Government, like a household, a State Government, and all private organizations have Government Budget Constraints (GBCs).
Attacks on other proposed fiscal policies on the Senator’s agenda in the infrastructure, climate protection and job creation areas are sure to intensify in the coming weeks and months as these policy proposals get increasing exposure and scrutiny. Critics will say that the likelihood is high that policies in these areas, will require substantial deficit spending, and increases in the national debt, and also that deficit reduction and deficit neutrality should be targeted as the first principle of responsible fiscal policy outweighing all other considerations.
But this assumption belongs to a constellation of fiscal myths that are all false. Nonetheless, as Campaign 2016 develops, faux fiscal responsibility deficit and debt memes, fueled by a chorus of think tanks where the Very Serious People (VSP) sit and talk only to one another, will take center stage in political debates. At that point, mainstream critics in the media will use these myths to whip the Sanders proposals unmercifully as the ravings of a “pie in the sky” “socialist” who knows nothing about public finance and the need for fiscal responsibility.
As indeed they did. The “fiscal myth” that taxes pay for Federal spending is already being used to attack #MedicareForAll. When Sanders asks and answers “You know who pays for those programs? You do,” he’s teaching an entire constituency a falsehood that actively works to undermine working class interests in universal concrete material benefits! Why on earth would Sanders do this? To the next points, which are shorter–
2) Public assistance should not be framed as a public-private partnership. Follow the money. Under the Sanders plan — leaving the morality of “greed” out of it — Amazon “pays back” the government $300 (say) for the Food Stamps the government gave its employees, so that they can survive on the miserably inadequate wages that Amazon pays. In other words, Amazon and the goverment have become partners in provisioning the working class such that its members can reproduce their labor power. Surely this means, in principle — and I know that legislation would have to be introduced for this to happen — that Amazon could reduce its share of Social Security matching, and have the government make up the difference there? Why not? Suppose Amazon wants to start “reforming” Food Stamps, on the grounds that, as a partner, it should be getting value for the $300 it spent?
3) The Sanders plan is still a subsidy. Conveying goverment services to citizens has adminstrative costs. So — assuming for the moment that Federal taxes do indeed “pay for” Federal services — the $300 in Food Stamps that Amazon “reimburses” the government for should be marked up to reflect those costs. That seems like a careless, sloppy omission (unsurprising, considering the process through which the plan to have a plan was released).
To cure these defects, Sanders — and I do hope some staffer is reading this — should do the following:
1) Make sure the false idea that Federal taxes “pay for” Federal spending is not enshrined in legislation, even in the preamble. Contact Stephanie Kelton if you don’t believe me;
2) At least, for pity’s sake, de-emphasize that false idea in campaign materials;
3) Frame “the greed tax” as openly punitive (removing the “pay for”/reimbursement aspect entirely);
Of course, this leaves aside the whole question of whether the tax system can be used to achieve the desired effect; but that is a topic for another day. Oh, and from the 30,000-foot level, the Sanders idea would apply to other ginormous malefactors, like Walmart. And Sanders is going after individual corporations, like Disney. I like that, too. But if the left is to become “the party of ideas,” as seems to be happening, those ideas need to be fully worked!
 It’s worth noting that Sherrod Brown (D-OH), with whom Sanders has a legitimate beef (see also), had a similar concept, which he called the “Corporate Freeloader Fee.” From Brown’s 77-page white paper, “Working Too Hard For Too Little: A Plan for Restoring the Value of Work in America” (PDF), pages 44-45:
Some forms of employee marginalization, such as wage theft, anti-unionizing efforts, and unpredictable schedules will be addressed by the improved labor standards described above. Raising the minimum wage to $15 an hour will help lift millions of American out of poverty, and requiring part-time workers to get the same access to retirement plans as full-time employees could increase savings for millions of workers. But it is possible that through the denial of hours or other means, employers may maintain policies that keep their employees impoverished. In these instances, . Taxpayers should be reimbursed for subsidizing a company’s workforce through a fee, called the . The fee would be based on the percentage of staff earning wages less than 200 percent of the federal poverty rate for an individual person, or $23,760 for 2016. The fee would be assessed only on employers that have paid $100,000 in payroll taxes a day for 180 days in the last year,266 and it would be scaled based on the percentage of a company’s workers below the poverty threshold. For example, a fee of 25 basis points of total payroll would be levied on employers with 25 percent or less of their workforce earning wages at the poverty level or lower. The fee would increase to 50 basis points for companies with between 25 percent and 50 percent of their workers earning less than poverty Clevel wages. The fee would be 75 basis points for employers with between 50 percent and 75 percent of employees earning less than poverty level wages and 100 basis points for more than 75 percent of employees and above. Companies could reduce their fees by 25 basis points if they provide healthcare benefits and make employer contributions to retirement. Conversely, companies that are already providing decent wages to their employees and are dedicated to staying in the U.S. should be rewarded.
To be unfair, I gotta say this strikes me as yet another liberal attempt at “problem-solving” through an insanely complex rejiggering of the tax code. Sander’s plan-to-have-a-plan of moving $300 out of Jeff Bezos’ pocket back into the government’s is a lot simpler to understand and explain. To be fair, Brown does attempt to address the fundamental issue — the power imbalance between workers and owners — with improved “labor standards.” To be even more fair, the words “monopoly” and “monopsony” don’t appear anywhere in Brown’s white paper. Since Amazon isn’t profitable — except for AWS — why not just turn the marketplace into a public utility? Neither Brown nor Sanders want to go there, however.
 It may be that here we have a case of the old adage that “science advances one funeral at a time.” Younger candidates like AOC are more receptive to ideas that reflect the real operations of the economy.
 Taxes do not have to pay for spending to make this problematic. Follow the logic to its conclusion, and you come to the idea that Amazon shouldn’t pay any taxes at all. Oh, wait…