Hypocritical Conservatives Want Taxpayers To Subsidize Their Business Costs

End The Subsidy — Businesses, Not Taxpayers, Should Pay Their Own Expenses

Feb 24, 2017 · 10 min read

By David Grace (www.DavidGraceAuthor.com)

“Should citizens be taxed to subsidize private businesses?”

Conservatives would, of course, say “No.”

And I agree.

The problem is that the Conservatives don’t really mean it. Not at all.

Conservatives Want To (And Do) Shift Their Labor Costs To The Taxpayers

While Conservatives give lip-service to the “No government subsidies” rhetoric, they do everything they can to shift their labor costs to the taxpayers.

When businesses pay poverty wages (let’s call them what they really are, “food-stamp wages”) what they’re really doing is transferring the costs of employing their workers to the government and ultimately to the taxpayers.

While claiming to believe that businesses should stand on their own without government subsidies they’re really championing a system that forces taxpayers to subsidize their employees’ wages with tax-supported public assistance.

That Conservative, maybe Libertarian, businessperson is actually saying:

“I don’t want to pay my employees enough to live on. No, I want you, the taxpayer, to give him food stamps to cover the shortfall between what I pay him what it costs to feed his family. I want you, the taxpayer, to give him Section 8 housing to cover the shortfall in the cost of housing his family. I want you, the taxpayer, to cover the shortfall in the cost of providing him with medical care in the form of state or federal medical subsidy programs like Medicaid.”

Double Standard

Sure, over the dinner table they will complain about “socialism” and “welfare” and all the money the government wastes on those “losers” who don’t want to work hard, but that’s all just hot air floating their hypocrisy balloon.

They’re not stupid. They know that a person of average intelligence with a high-school education and no family that is able to subsidize years of special training will never to able to support himself leastwise raise and educate his/her children on a take-home pay of $12,000 a year.

They know that less than 5% of the workforce is unemployed but 15% of the population is forced to live on food stamps.

They know that leaving fifteen or twenty or thirty percent of the population to live in cardboard boxes and to starve on the streets is never going to be a real-world option in this country. They know that one way or another some local, state or federal level of government is going to have to pick up the slack left by their food-stamp wages, and that’s just fine with them.

They get to complain about the wasteful government and then fight to maintain a system where some level of the government has no option but to subsidize the food, housing and medical costs of their food-stamp-wage employees.

They make their extra profits from the food-stamp wages they pay their full-time employees and shift their employees’ actual costs of living to the taxpayers, all the while complaining about government waste and creeping socialism.


Businessmen Think That Their Training Costs Should Be Paid By The Taxpayers

The same executives who claim that they are Conservatives and are against spending tax money to subsidize private businesses, in the next breath say:

“I don’t want to pay the costs of training my own employees. I want the government, the taxpayers, to fund colleges and universities where the engineers, chemists, economists, programmers, mathematicians etc. etc. etc. that I need to hire are trained. I want the taxpayers to pay the costs of training my skilled employees.”

And if there aren’t enough doctors or programmers or whatever skilled workers they need available to staff their companies what’s their plan? Do they train people in the skills they need?

Do they look at training as a cost of doing business to be added into the other costs that are baked-into the prices they charge for their products?

NO and NO.

They go to foreign countries where other taxpayers have paid the bill to educate these workers and then they bring those already educated people here to take the jobs that these same businessmen refuse to train Americans to do.

How Companies Could Pay Their Own Training Costs

Lots of worker-training costs can and should be handled privately. There’s no reason why Microsoft, Apple, Google, Facebook etc. couldn’t get together and create a “Coding University” to train the software professionals they need.

Their Coding University would take the most promising applicants and train them for deferred fee. There would be a set charge for the training payable after graduation from wages earned.

If the student took a job with any of the companies sponsoring that school then that employer would pay the graduate two-thirds of the going rate for that position and each year the the school would forgive one-third of the cost of the training. At the end of three years the student’s training fee would be satisfied at no out-of-pocket cost to the student and their salary would then go up to market level.

If the student took a job with a company that was not one of the school’s sponsors then the student would owe the school the remainder of the training fee to be repaid over three years from earnings and without interest.

If none of the sponsoring companies offered the student a job or if they fired him/her without cause the training would be free.

GM says it needs tool and die makers, lathe operators and machinists. The construction industry needs residential and commercial electricians, plumbers, etc. There’s no reason why these industries can’t build their own not-for-profit schools and operate them on the same basis of tuition forgiveness over the first two or three years of the student’s employment by any of the sponsoring companies.

And we’re just beginning to talk about the ways that hypocritical, so-called conservative business people shift their company’s costs onto the taxpayers.

They talk big about supporting the Free Market, but they really just think of the market as a way to get other people to pay part of the costs of running their business.

We’ve just seen how the free market for labor is actually only a mechanism for shifting much of the cost of that labor from the employer to the taxpayer.

What Is A Living Wage?

By the way, a living wage is not just fifteen or sixteen dollars an hour for adults*. It’s also medical insurance and at least a week of paid time off.

*(For details on how the minimum-wage would differ for adults and teenagers see my post: “Raising The Minimum Wage Has Little To Do With Helping People. It’s Real Value Is As A Tool To Reduce Welfare And The Size And Cost of Government.

If you employ someone in excess of thirty hours a week, you need to pay the entire cost of their medical insurance. Below thirty hours a week you need to pay a proportionate share — 75% of the insurance cost for a thirty-hour/week employee, 50% for a twenty-hour/week employee and so on.

How Capitalism Works

As a capitalist I believe that the price of a product should reflect the costs of producing that product and that the consumer should then be able to price-compare various products based on their actual costs of production, not their false, subsidized costs of production.

But the so-called Conservatives don’t believe that at all. They are only interested in how much profit their business can make and they know that every dollar of their costs that they can shift from themselves to the taxpayers will make them richer.

So, they pay the absolutely lowest wages they can get away with, food-stamp wages, and they shift their full-time employees’ costs of food, housing, medical care, training and the like onto the taxpayers.

And, yes, businesses will need to raise their prices to cover those living-wage costs so that the taxpayers don’t have to cycle their money through the government bureaucracy in order to pay the workers’ living expenses through public assistance programs.

This is how capitalism works. You factor the actual costs of producing your product into the price and then the Market decides which products succeed.

If all employers paid a living wage they would factor the costs of that living wage into the pricing of their products and their customers would then be able to price-compare between product categories and within product categories.

In that way the consumers would directly bear the costs of paying a living wage to the employees who produce those goods instead of allowing employers to shift those labor costs to the entire society in the form of tax-supported government welfare programs.

What Do You Think?

If you really believe that taxpayers shouldn’t subsidize private businesses, if you really believe that people should earn their own living without being supported by the government, if you really believe in the value of a hard-working, self-supporting middle class, then you will fight these self-serving, so-called Conservatives and demand that they, not the taxpayers, pay the real cost of the labor that they use to build their products.

If you’re really against a government-subsidized society, you will demand that every employer be required to pay a living minimum wage.

If all employers paid a living wage instead of a food-stamp wage then working Americans would be able to buy their own food, their own housing and their own medical care instead of depending on taxpayer-funded government programs for those necessaries of life.

Who Really Pays The Cost Of Market-Driven Rents?

Here’s another way that the unrestricted free market shifts private costs to the citizens at large.

Let’s consider the rental real estate market.

Business is booming. Rents in downtown locations begin to rise. That nice little stationary store can’t sustain the increased rent from the hot market and it’s gone. Then the bookstore, the nail salon, the mom-and-pop diner, all gone, replaced by business offices, banks, insurance companies, maybe a high-end sushi place.

So, if you want to buy office products or get your hair cut or buy a pair of glasses where do you go? Simple, you drive two or three or four miles to a Walmart or a shopping center.

Pretty soon your city has “districts” where you have to go to get different things. You have to go to this district to find specialty food stores or a good butcher shop or a bakery. You have to go to this other district for plants and garden supplies. You have to go someplace else for a restaurant. Drive to work here; drive to a grocery shop there; drive to eat someplace else; drive home twenty miles away.

You don’t think about it. You just get into your car and drive.

  • Who has to build, clean and maintain all those roads? The taxpayers.
  • Who has to install the traffic lights and catch the speeders? The taxpayers.
  • Who has to build and operate the bus lines and the light rail?
  • Who has to deal with the pollution?

The government and the general public.

What about all the wasted gasoline and wasted time? Those are all taxes on everyone who lives there.

So, while the “free market” for rental real estate sounds fine, in fact it generates lots of taxes on the citizens, both financial ones paid to the government and direct costs in time and money paid by the citizens.

The landlords make the money and the taxpayers pay the bills.

It also concentrates commerce in huge chain businesses like Walmart and Home Depot while at the same time squeezing out smaller businesses that require high-foot-traffic urban areas in order to survive.

On the other hand, if zoning laws prohibited business offices on the ground floor of buildings in city centers, those spaces could be preserved for small business and you could have a mix of lots of different kinds of businesses and housing in one area.

My point is that the free market is not always really free.

The “free market” for labor actually shifts the costs of labor to the taxpayers.

The “free market” for rents burdens taxpayers with huge overhead costs and penalties while enriching the landlords and developers.

In many ways the free market is often a mechanism for shifting costs from those who benefit from an activity to the society as a whole and it often generates its own sorts of costs and taxes which are borne by third parties.

What Do I Propose?

So, here’s my proposal:

  • We no longer let businesses shift their labor costs onto the taxpayers.
  • Instead, we raise the national minimum wage for adults from the current food-stamp wage to a real living wage including medical insurance, and we tie that wage to inflation.
  • We no longer let businesses shift their training costs onto the taxpayers.
  • We create a legal structure and reasonable rules for the corporate operation of industry-sponsored vocational-training centers.
  • We no longer let landlords shift the environmental and transportation costs of their properties onto the taxpayer.
  • We use zoning laws and excess-rental-profits taxes to restrain the effects of runaway rents.
  • We make sure everyone who wants to work, can work, and we create government funded, public benefit, non-profit corporations that provide unskilled and semi-skilled, living-wage jobs to everyone who is willing to work but cannot find employment elsewhere.

How would that work?

For details on how a non-profit corporation would provide jobs see my article: A Guaranteed Minimum Income Is The Wrong Answer To The Right Question. The Solution To The Shortage Of Living-Wage, Low-Skilled Jobs Is Publicly Funded, Non-Profit Corporations That Will Pay A Living Wage.

What I’m Saying Boiled Down To One Sentence

I propose that we run the country by the motto:

Everyone who can work is guaranteed access to a living-wage job that pays him/her enough money to be able support themselves without welfare.

–David Grace (www.DavidGraceAuthor.com)

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Graduate of Stanford University & U.C. Berkeley Law School. Author of 17 novels and over 200 Medium columns on Economics, Politics, Law, Humor & Satire.

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