Federal Safety Net Cuts Are Hurting States. A ‘Bad Business Fee’ Could Help.

Working people — and the state and local governments who represent them — are being pushed to the brink by deep federal cuts to essential programs like Medicaid and SNAP.

Those cuts didn’t happen in a vacuum. They were deliberately paired with a trillion-dollar tax giveaway to the wealthiest CEOs, leaving states and localities to scramble for the funds needed to provide basic health care, food assistance, and other services their residents rely on.

The result is a manufactured crisis with devastating effects in communities across the country.

State and local governments can’t reverse federal policy, but they can choose how to respond. They can refuse to stand by while their neighbors are forced to skip medical care, ration food, or fall behind on rent — all while billionaire‑led corporations continue to profit.

Local leaders have the power to demand accountability from the very CEOs whose business models rely on refusing to pay workers a living wage, spending hundreds of millions of dollars on union-busting firms to squash democratic freedom, and shifting the true costs of their profits onto the rest of us.

That’s where a Bad Business Fee comes in. This fee would impose a significant fine on companies that pay wages so low their workers are forced to depend on public assistance — which essentially forces taxpayers to subsidize their low pay.

Walmart is one company that would likely have to pay such a fee. As a new Institute for Policy Studies report points out, the retailer’s median worker pay of $29,469 falls significantly below the income thresholds for a family of three to qualify for Medicaid and SNAP food aid. Meanwhile, eight descendants of Walmart founder Sam Walton enjoy billionaire status.

Amazon is another example. The Institute’s analysis finds that the company that made Jeff Bezos one of the world’s richest men has nearly 10,000 employees on SNAP in four states alone (Colorado, Massachusetts, Illinois, and Michigan.)

A well-designed Bad Business Fee would benefit both workers and the state budgets. Communities would decide themselves through elected boards if the revenue would be used to subsidize worker wages, to cover the cuts to safety net programs, or otherwise meet the needs of low-wage workers and their communities.

A proposal like this strengthens democracy on multiple fronts. First, it ensures that states and localities can maintain basic protections regardless of what happens in Washington. Second, it promotes the practice of democracy by giving communities direct control over how public money is spent — replacing cynicism with real civic power. Third, it would strengthen the economic portion of our democracy. Companies would be incentivized to work directly with and respond to their employees’ requests for fair wages and adequate benefits, giving workers the voice and dignity they deserve.

In short, the corporations benefiting most from the Trump tax cuts would finally be held accountable: either create good jobs and pay living wages, or contribute directly to the public systems their workers rely on.

The damage done to our institutions was by design — and it won’t be undone by wishful thinking. Billionaires like Elon Musk, Donald Trump, Jeff Bezos have amassed wealth and influence while weakening the foundations of both our economic and political systems. Repairing that harm requires structural action now — not just voting every few years.

We have the tools to rebuild a just democracy and a stronger economy. A Bad Business Fee is one of them — and state and local leaders don’t have to wait for Washington to act. The time to begin that work is now.