The Princes and the Paupers. (And the taxes.)

We can’t talk about budgets and deficits without addressing taxes.  That’s the supposed impasse in Washington right now.

The reason to support tax increases over benefit cuts as a way to decrease the deficit is simply this: Corporations and the wealthy benefit the most from entitlements.

That sounds contradictory.  It’s really not.  Articles like this and this explain why.  Wal Mart can make $6 billion in net income as the economy limps along.  Wal Mart’s average wage is around $11.75 an hour.  That’s about $21,000 a year if you assume the workers are full time.  Which, most of Wal Mart workers aren’t.

The problem here is that the Walton family--like CEOs, presidents, and board members across the country--are raking in cash while their workers aren’t.  Setting aside taxes for the moment, these profits are only possible because companies like McDonald’s, Home Depot, and Wal Mart offer paltry benefits if they offer any at all.

The lack of benefits and low incomes hit employees with a double whammy.  Low incomes force employees to seek out SNAP benefits.  14% of food service employees are on food stamps.  Without benefits, employees utilize Medicaid or, if they’re eligible, Medicare.

Meanwhile, Social Security is more important than ever.  Fewer and fewer companies are offering robust retirement packages and pensions.  Because of workers’ lower than average wages, it cuts deeply into their ability to save for retirement.  About 33% of Americans have no savings or retirement accounts.  This isn’t an irresponsibility.  Many Americans just don’t make enough to save.

We have an unfortunate conundrum.  The wealthy whose companies are benefitting from these programs often advocate benefit cuts to preserve their low tax rates.

Something has to give.  The free market is leaving service workers behind.  At the same time, workers are looking at a grim reality as public programs are cut back.  If private companies aren’t willing to provide for retirement, health care, and a living wage; the Government is going to need to pick up the slack.