Over half of the Fortune 500 companies in this country made a profit every year between 2008 and 2012. Yet together, those companies dodged a combined $73.1 billion in state income taxes. Twenty-six paid absolutely zero federal taxes during the same period. Any way you break down the numbers, the picture isn't pretty. Rich companies are getting away with paying very little in taxes - far less than their fair share. Many of these same companies are also paying their workers poverty-level wages, forcing them to rely on food stamps (SNAP benefits) and other forms of public assistance that are largely funded by taxpayers. By dodging taxes and stiffing workers, these companies force the public to effectively subsidize their profits. This scheme has been going on far too long and it's high time for big businesses to pay America back.
McDonald's is probably the best-known example of a company that cheats its workers at the expense of the rest of us. In the third quarter of 2013, the fast food giant reported $1.5 billion in profits - up five percent from the same quarter the previous year. At the same time, the National Employment Law Project (NELP) released a report showing that taxpayers are covering $1.2 billion per year in public assistance for McDonald's workers who are forced to rely on food stamps to make ends meet. McDonald's notoriously made headlines last year when their budgeting advice for employees leaked, which suggested that workers find additional jobs and forgo heating their homes in order to survive on McDonald's wages. That's right, even McDonald's acknowledges that its employees cannot make ends meet on dollar-menu wages.
And McDonald's isn't the only culprit. In the fast food industry alone, 52 percent of workers rely on food stamps and other forms of public assistance. Similarly, according to a report released by Congressional staff of the U.S. House Committee on Education and the Workforce, a single Walmart superstore in Wisconsin was estimated to cost taxpayers nearly $1 million per year in public benefits used by the company's employees. Nationally, the estimated cost is $6.2 billion per year. So that's the true cost of their low prices.
But the reality is, low wages are only half the story. Large companies are often the worst offenders when it comes to denying workers benefits, retirement and opportunities for paid leave. Fewer than a quarter of all part-time workers have access to employee health benefits. In the private sector, almost 40 percent of all workers lack basic workplace freedoms like paid sick days and fewer than half receive any kind of retirement benefits. Corporate profits and CEO salaries are skyrocketing, yet these companies can't afford to offer their employees health care or sick days? Things just don't add up. In truth, these companies can afford to provide good wages and benefits. But instead, they have chosen to exploit their employees in order to inflate their own bottom line.
The fact is, these corporations are cheating the American public by cheating their workers. In fact, it's part of their business model. But the current arrangement isn't fair to workers or to taxpayers - nor is it equitable to employers who play by the rules, pay family-supporting wages and contribute their fair share of taxes. Let's be clear: there's nothing wrong with being a profitable corporation, but that success shouldn't come at the expense of workers, our communities and our economy.
That's why corporations that refuse to pay their workers a fair wage and offer reasonable benefits should be subject to a "Bad Business Fee." Such a measure would assess a fine on businesses to incentivize them to provide jobs with decent wages, fair hours and reasonable benefits. A Bad Business Fee could hold a company accountable when it refuses to respond to worker concerns, pays excessively low wages and benefits, and/or relies on taxpayer-subsidized benefits for its workers. And the revenue generated from the fee could then be used to supplement the wages of workers, beef up labor standards enforcement, or even fund community-based organizations that provide low-wage workers with child care, housing assistance and health care in their communities.
Everyone deserves to earn sustainable wages and benefits, but until that time we cannot continue to subsidize outsized corporate profits.