Don’t Let The Demagogues Fool You: New Taxes Are No Bargain For New Jersey

Wal-Mart, the company Democrats love to hate, unless they happen to be sitting on the firm’s board of directors. The Star-Ledger’s Tom Moran has written a column “Don't let the prices fool you: Wal-Mart is no bargain for N.J” that is the template for the Democrat Party’s campaign against the company.

The problem is the company is also a welfare freeloader.

It offers such paltry health benefits, at such a high cost, that most employees don't take any coverage at all. And many of them land in state programs designed for the poor.

Wal-Mart is also the leader in that category, dumping nearly 600 employees and their children into New Jersey's Medicaid and Family Care programs at last count. That perverts these anti-poverty programs, turning them into another form of corporate welfare.

Which does not sit well with Sen. Joe Vitale, chairman of the health committee. Last year, Vitale managed to shepherd a bill through the Legislature that squeezed more families into the state's overburdened health programs. Now he's finding that many of those subsidies are being soaked up by employees of the state's largest companies, led by Wal-Mart, Home Depot and Pathmark.

Vitale wants Wal-Mart off the dole. A bill he co-sponsored would impose a fine on big companies that shortchange employees on health care, turning the money back into the state programs.

So, the government creates programs to provide low–income people with health insurance and now Moran and Vitale complain when people sign up for the programs. What kind of sense does that make? Retail and fast food chains are the largest employers of those entering the job market for the first time and those with low-skills. As one would expect, these are also the lowest paying jobs. Who were the Medicaid and Family Care programs designed to help, if not for people in this category?

New Jersey has over one million people enrolled in Medicaid and Family Care programs, which means “the nearly 600 Wal-Mart employees and their children” represent 0.0006 of the people enrolled. What about the employers of the 99.94% of people enrolled in the taxpayer funded programs, are they not also “welfare freeloaders” according to Moran’s definition?

In any case, individuals are beneficiaries of the state’s health insurance programs, not employers. Employers are not responsible for their employees’ expenses whether it be for health insurance, food, clothing, housing, telephone bills or anything else you can name. Employers offer positions for which jobseekers are free to accept or reject work based upon the total compensation offered and that includes benefits.

There is a limit to what any employer can afford to pay per worker and still remain profitable. In 2005 Wal-Mart made a 3.6 percent profit, or as “progressives” like to say about 3 ½ pennies. The State of New Jersey with its 6% sales tax makes more on each sale than Wal-Mart. Throw in all the other federal, state and local taxes Wal-Mart pays and it becomes clear government is the biggest money winner in the Wal-Mart success story.

Additional taxes and fines on Wal-Mart, Home Depot and Pathmark would hurt low-income people the most. Higher prices for goods and fewer jobs would probably “not sit well with” the people of New Jersey. Perhaps it is Moran and Vitale who really don’t care.