On Wednesday morning, Senator Bernie Sanders, the Independent from Vermont, together with California’s Democratic Representative Ro Khanna, introduced a Senate bill that would tax companies with more than 500 employees for the amount of money their employees receive in federal benefits.
Under the proposed legislation, if an Amazon employee receives $1,600 for federal food assistance, the company would be taxed $1,600 to cover the costs of that employee’s burden on the tax base. The law would effectively require large employers to raise their wages. Pay people enough to buy groceries, the logic goes, and you won’t be stuck with a bill from Uncle Sam at the end of the calendar year.
Sanders said the Stop Bad Employers by Zeroing Out Subsidies Act—or BEZOS, quite unironically—will save taxpayers $150 billion a year, citing numbers from a study by the University of California, Berkeley Labor Center. That’s more than double the total cost of the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) in 2017.
Khanna introduced similar legislation last year with nine House co-sponsors. At the time, Amazon had not yet emerged as a major employer of food stamps recipients, and much of the press coverage focused on Walmart. Sanders cited reporting by The New Food Economy when he called out Amazon as a low-wage employer.
Amazon was the second company in American history to reach a $1 trillion valuation this week, following Apple’s similar announcement earlier this month. Amazon has denied claims that it underpays its workers, but Sanders’ team said they heard from hundreds of Amazon employees and cited testimony from two who were earning $11 and $13.25 per hour working full-time at the company and relied on SNAP to bridge their nutrition gap. Amazon has repeatedly claimed that its average hourly wage is “over $15/hour,” but that number includes stock options, which do not vest until employees have logged significant time at the company. The $15 figure also does not account for temporary staffers at Amazon warehouses who earn less money than direct hires.
As we reported in April, Amazon employees’ burden on the safety net is the tip of the iceberg when it comes to calculating the company’s total impact on federal, state, and local tax bases. Jeff Bezos’ company did not pay federal income tax in 2017. It was able to avoid collecting sales taxes in many states for years. And according to an investigation by The American Cities Business Journals, local governments have offered the company generous incentives to site its warehouses in their districts. The company has received an estimated $1.2 billion in subsidies to expand its empire.
The BEZOS Act has little chance of passing in the current Congress. But as Democrats gear up for the midterms, it may complement calls for reforms that would achieve similar ends— a $15 federal minimum wage, for instance, or fair workweek protections for people working in fast food and retail.