Independent Senator Bernie Sanders of Vermont has been attacking large corporations that have employees who need federal assistance because their incomes are not sufficient to meet the basic demands of their budgets.
The senator has set his sights on executives and large shareholders, such as Amazon’s Jeff Bezos. Bezos whose wealth has swelled to north of $160 billion dollars, is under scrutiny amid reports that employees in Amazon’s distribution and operational centers cannot earn a living wage.
Sanders, to combat this, introduced the “Stop Bad Employers by Zeroing Out Subsidies Act.”
The Act would tax large companies – those with more than 500 employees – dollar-for-dollar for the federal benefits their employees receive.
Possible Impact if Passed
Balance sheets could take a hit, and disclosures would be required, if the Sanders bill passes.
Assume that a company had exactly 1,000 employees in each of the 50 states qualifying for government benefits of $2,000 each in total dollar value assistance. That totals 50,000 employees, and $100 million annually added to the tax bill.
Companies, such as Amazon, would be expected to file disclosures of this pending legislation in the footnotes of their financial statements, and possibly estimate the amount of tax liability.
Under the Act, qualified federal benefits include the dollar value of:
Supplemental nutritional assistance program (SNAP)
Qualified at school lunch for the individual or the person’s dependents
Assistance payments for rental housing
Payments made for medical assistance under a State Medicaid plan
Amazon currently has over a half a million employees across the globe. Warehouse Pickers and Warehouse Associates earn the least, with an hourly rate of around $12.75 according to payscale.com.
“In 2017, nearly one in three Amazon employees in Arizona was on food stamps, or lived with someone who was, meaning 1,800 people. In Pennsylvania, one in 10 Amazon employees was on food stamps, or more than 1,000 people” and “700 amazon workers in [Ohio] received food-stamp benefits,” according to Businessinsider’s August 25, 2018, report Data from states shows thousands of Amazon employees are on food stamps.
Sanders caucuses with the democrats, so passage of the Act will be difficult in a republican run congress. However, the Senator may find support from the unlikeliest of places. President Trump took swings at Amazon, tweeting in March 2018 “that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon.”
While conservative Fox News host Tucker Carlson tweeted August 31, 2018 “Jeff Bezos is the richest man in the world. Many of his employees are so poor, you’re paying their welfare benefits” adding “this is an indefensible scam.”
In the event the Act passes it will be important to see if the Financial Accounting Standards Board (FASB) takes a position to require qualitative and quantitative information around such disclosures. With companies like Amazon and Wal-Mart – who has also come under attack for a lack of a living wage – employing hundreds of thousands of people, it is not impossible to imagine a disclosure framework where investors are more informed about the federal benefits employees receive, working for the companies they invest in.
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