Sanders introduces BEZOS Act to tax large employers who pay low wages

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Senator Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., teamed up Wednesday to introduce legislation to tax big companies whose wages are so low that their employees are forced to rely on public assistance programs.

The bill is aimed at large corporations such as Amazon and Walmart and is even named after Amazon chairman and CEO Jeff Bezos. The Senate version of the bill, known as the Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act, would levy a 100 percent tax on corporations with 500 or more employees equal to the amount of federal benefits received by their low-wage workers. Thus, if a worker at Amazon receives $2,000 in food stamps, the corporation would be taxed $2,000 to cover that cost. Khanna's version of the bill in the House isn't named after Bezos and is called the Corporate Responsibility and Taxpayer Protection Act.

According to Sanders, the bill would give large, profitable corporations a choice of either paying their workers a living wage or pay for the public assistance programs like Medicaid, food stamps and public housing its low-wage workers are forced to rely on.

“Let us be very clear: We believe that the government has a moral responsibility to provide for the vulnerable – the children, the elderly, the sick and the disabled,” said Sanders. “But we do not believe that taxpayers should have to expend huge sums of money subsidizing profitable corporations owned by some of the wealthiest people in this country. That's what a rigged economy is about.”

Sanders took particular aim at Bezos, who has also come under attack from President Trump because of Bezos’s ownership of the Washington Post and Amazon’s deals with the U.S. Postal Service.

“Jeff Bezos, the founder of Amazon, is the wealthiest person on earth,” said Sanders. “Today, his net worth is $168 billion, according to the Bloomberg Billionaires Index. Since the beginning of this year, his wealth has increased by about $260 million every single day. Meanwhile, Mr. Bezos continues to pay many thousands of his Amazon employees wages that are so low that they must rely on food stamps, Medicaid or public housing in order to survive, programs that are financed by middle-class taxpayers. According to a recent report from the New Food Economy, one out of three Amazon workers in Arizona and 2,400 in Pennsylvania and Ohio need food stamps in order to feed their families.”

Under the legislation, large employers are defined as employers who have more than 500 employees, including part-time workers, independent contractors and franchise workers. Federal benefits would be defined as: the Supplemental Nutrition Assistance Program (SNAP), Medicaid, the school lunch program and Section 8 housing.

The bill also would make it unlawful for a large employer to ask employees whether or not they qualify for federal benefits. Under the bill, the IRS, in consultation with USDA, HUD and CMS would issue regulations necessary to administer the corporate welfare tax.

“If you work hard for a company that’s doing well, you should make enough to pay the bills,” Khanna tweeted. “That’s why I’m working with @BernieSanders to make sure that when huge corporations make taxpayers pick up the tab for workers’ wages, they have to pay back every dollar.”

The bill is unlikely to pass in the Republican-led Congress and be signed into law. However, also on Wednesday, House Speaker Paul Ryan, R-Wis., said the House would vote this month on legislation making the temporary tax cuts for individuals in the Tax Cuts and Jobs Act permanent (see Ryan says tax cut 2.0 vote still planned, despite SALT hangups). They were scheduled to expire in 2025. House Ways and Means Committee chairman Kevin Brady, R-Texas, plans hearings next week on the so-called “Tax Reform 2.0” legislation that would make the individual tax cuts permanent, as well as offer incentives for business innovation to allow startups to write off more of their initial costs. The plan also promotes family savings by creating a new Universal Savings Account for families, expand section 529 education savings accounts, and allow families to access their own retirement accounts penalty-free when bringing a new child into the family by birth or adoption. That bill too, however, is unlikely to pass in the Senate, where it would need votes from both Republicans and Democrats to pass this year.

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Finance, investment and tax-related legislation Tax laws Bernie Sanders Amazon Walmart