THE BLOG
11/21/2012 05:42 pm ET Updated Jan 21, 2013

Wealthy Should Give Thanks for Their Welfare Benefits

This holiday I hope many of the wealthy will give thanks for the benefits they get from welfare. But it's more likely they will continue to ignore, or be ungrateful for, what government does for them -- for the taxpayer-funded programs they rely on to pad their profits and lower the costs of their nannies. This thanklessness and ignorance cannot continue.

Recent discussions of health care costs show some business owners believe they are entitled to profit from welfare. As Matt Yglesias of Slate notes, owners of some Applebee's, Denny's and Papa John's restaurants have been "whining" and are "being jerks" about the Obamacare "employer responsibility" provision. This will require some businesses that don't provide health benefits to pay a new tax of $2,000 per employee. Those whiny jerk capitalists seem to believe they should depend on taxpayers to cover the costs of healthcare for their employees. As Ezra Klein of The Washington Post puts it they resist paying "a small fraction of the cost that the public will pay to insure [their] employees." Klein notes they should be thankful; they're getting a great deal, since the average cost of a private employer health plan is $15,745 per worker.

Private businesses will always have incentives for cost-shifting to the taxpayer. And we must be ever vigilant against those who would let them get away with it. For example in a post on The Economist's website, called "Taxes and the Rich," Will Wilkinson, a usually astute analyst and admirably clear thinker, wrote: "Anyway, it's not the infrastructure of American capitalism that's busting the budget, is it? Our fiscal strain is largely a matter of buying health care for old people."

But Wilkinson is wrong. Yglesias and Klein understand that government-provided health care is absolutely an integral part of the "infrastructure of American capitalism" -- as are many other welfare programs for businesses that employ low-wage earners. Those corporations depend on the safety net, just as their employees do.

American capitalism requires workers. Workers, young and old, require health care. We can't allow them to be treated like inhuman resources, that can be consumed, and the residue conveniently and cheaply disposed of. Here's how The New York Times made the connection, reporting that more older Americans are working longer because, among other reasons, "many corporations have stopped providing health care to retirees... forcing them to work till Medicare is available." Those businesses increased their profits by pushing employees into the publicly funded safety net.

In some low-profit industries, capitalists might have little choice, but in other more profitable businesses, employers simply prefer to pad profits by paying below-survival wages, depending on the safety net to support their employees.

That is how the taxpayer-funded safety net nets increased profits for companies like Walmart, which is owned by the richest family in America. For example, in Ohio, 15,000 Walmart employees use Medicaid. So taxpayers subsidize -- in effect, send welfare payments to -- the richest family in America. Surely this is an unjustified dependence on an entitlement program and a bad use of taxpayer dollars.

But it's not just corporations. Anyone who employs a low-wage worker, such as a nanny, is likely in the same safety net supported boat. Medicaid costs employers only 1.45 percent of salary and if it weren't available, nannies would have to be paid more to be able to buy private health insurance. That's how the government subsidizes private childcare. And it's another example of how many Americans benefit indirectly from welfare received by others.

We can't let any American capitalists continue to ignore what they owe to taxpayer programs. President Obama's you "didn't build that" didn't go far enough: Many of these capitalists "couldn't run that" either, without the safety net.

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