New Jersey Gov. Mikie Sherrill has wasted no time confronting Trenton’s corporate-welfare culture. See the record $60.8 billion budget she signed last week that includes a new fair-share assessment on businesses that employ Medicaid beneficiaries. The goal is to make it possible for low-income folks to finally meet their basic needs.
Ms. Sherrill framed the tax as forcing businesses to foot the healthcare bills of their workers rather than letting taxpayers subsidize billion-dollar companies. The budget “asks any company with 50 or more employees on Medicaid—companies like Amazon and Walmart—to cover their workers, which they should do anyway, or pay a fine,” she said. Talk about basic fairness.
ObamaCare requires employers with 50 or more full-time employees to provide “affordable” health insurance. Yet many lower-income workers with access to employer plans end up on Medicaid because employer coverage is unaffordable. The tax will fairly require many large employers that have been freeloading on the public to chip in for the healthcare their low-wage workers need simply because the government provides expansive coverage for all.
The tax will start at $325 a year per Medicaid enrollee for employers with 50 or more beneficiaries (including a worker’s dependents) and will escalate to $725 per enrollee for employers with 500 or more beneficiaries. Part-time, seasonal, temporary and disabled workers on Medicaid will be excluded from the calculation.
A 2024 state report estimated that more than 800 entities could be subject to such a tax, including many hospitals, charities, colleges, school districts and even the state department of children and families. That’s the point. These institutions employ low-wage workers who need healthcare, and whose low wages are why the program exists. The tax isn’t a penalty on employers; it is a correction for a system that forces taxpayers to subsidize corporate poverty wages.
Even some left-of-center groups criticized the tax on the grounds it would discourage employers from hiring lower-income workers. That is worth pausing on. The complaint amounts to saying: if we make Amazon and Walmart pay a living wage, they might stop hiring low-wage workers altogether. Critics also warn the tax could suppress wage growth and job creation — a tidy admission that without this tax, the largest employers have no plan whatsoever to raise wages. Good. Let them squeal.
Because the tax will take effect as federal Medicaid work requirements kick in, some recipients might lose coverage as a result of this necessary course correction. Expect the state’s largest employers and their lobbyists to blame anyone but themselves.
Democrats in California are considering a similar tax. Rep. Ro Khanna and Sen. Bernie Sanders have proposed requiring businesses to cover the cost of their workers’ Medicaid, food stamps and other public benefits their low wages force workers to claim.
Who cares if these policies eliminate substandard jobs? The goal of today’s progressives is to make corporations, not workers, depend on the public purse — by giving working people the means to become truly self-sufficient.
