Paying Taxes to Your Boss: A Step Toward 21st Century Feudalism

Employers are already treating their workers like their subjects. Now some of them get to collect taxes, too.

Though a lot of Americans really (really, really) hate paying taxes, most of us can at least justify it as our contribution to some greater good, whether it’s the broad range of social programs favored by progressives or a libertarian night watchman state. But what if the government instead told us, “We don’t want your money, but we would like to make friends with some rich guys, so just give it to them and let them have fun with it”? That could soon be the law of the land in Pennsylvania, where the state legislature has passed a bill that would, as Philadelphia City Paper blogger Daniel Denvir describes it, “allow companies that hire at least 250 new workers in the state to keep 95-percent of the workers’ withheld income tax.” These workers will essentially be paying their employers for the privilege of having a job. Some have called this “corporate socialism,” but it also calls to mind an even older economic model that was once popular in Europe – except back then, the bosses were called lords. It’s a more modern innovation in the U.S., but combined with increased political pressure from employers and a crackdown on workers’ rights, it all adds up to feudalism, American-style.

The Pennsylvania bill is just the most recent example of state income taxes being turned into employer subsidies. It’s already the law of the land in one form or another in 19 states, and according to Good Jobs First, it’s taking $684 million a year out of the public coffers. The theory is that this will boost job creation. But the authors of the Good Jobs First report note, “payments often go to firms that simply move existing jobs from one state to another, or to ones that threaten to move unless they get paid to stay put.” In other words, it’s more like extortion than stimulus. With state governments facing a projected $4 trillion budget shortfall and continuing to cut social services and public sector jobs, they can hardly afford to be wasting money on companies that already have plenty and have no intention of putting it to good use. And the more governments turn over their privileges to businesses, the more the distinction between the two becomes blurred.

But if corporations have state governments over a barrel, they have their employees stuffed inside the barrel and ready to plunge down the waterfall. As I’ve noted before, some conservatives view all taxation as theft, but there’s surely no better term for what happens when employers promise their workers a certain wage or salary and then pocket some of the money for themselves. When you pay taxes to the government, you get something in return, whether it’s a school for your kids or a road to drive on or a firefighter to rescue you from a burning building. When you pay taxes to your boss, you… well, you give your boss your money. Your only reward is that you get to continue to “work the land,” so to speak. The lords didn’t consult with the peasants on which tapestries they should buy with the money they collected from them.

Did I forget to mention that these employers aren’t even required to tell their workers that this is how their “income taxes” are being used? Journalist David Cay Johnston, who covers this issue in his new book, The Fine Print: How Big Companies Use ‘Plain English’ to Rob You Blind, writes that this bait-and-switch is “stealthy by design.” Of course it is; if these workers were important enough to know where their money is going, it wouldn’t be legal to steal it.

Employers may be able to exert pressure, but they can’t actually control who you support, right? Well, they might not be able to accompany you to the voting booth (yet), but if you work in a state that allows your employer to confiscate your tax withholdings and donate them to a pro-Romney Super PAC, they can turn you into a Romney supporter whether you like it or not. It’s not enough that our current campaign finance system gives wealthy executives nearly unchecked power to support the candidate of their choice; subsidizing them with income taxes allows them to choose for everyone in their fiefdom.

If employers were always secretive about their exploitation, the comparison to feudalism might not seem apt – after all, serfs were pretty clear on what the score was. But there’s nothing subtle about the way some employers have begun to apply political pressure in the workplace. From forcing workers to attend Romney rallies without pay to outright threatening their jobs if President Obama is reelected, employers in the post-Citizens United era are feeling emboldened to conscript their employees as bannermen for the candidates of their choice. Suddenly, a job is not just a job, but an oath of allegiance. And Republicans, at least, are all for it. Mike Elk reports that Mitt Romney himself urged business owners to lobby their employees on his behalf, assuring them that there is “Nothing illegal about you talking to your employees about what you believe is best for the business.” And as we all know, if you can’t technically be arrested or fined for doing something, that means it’s totally okay to do it. Q.E.D., coal miners.

This lopsided power dynamic is reflected more generally in the shoddy state of modern labor law. In most states employers can fire their workers whenever they want for pretty much any reason, forcing them to fall in line with even the pettiest demands. When your boss is trying to tell you when you can and can’t go to the bathroom, forcing you to hide your Obama bumper sticker seems like an almost trifling concern in comparison. This lack of employee agency has led Roosevelt Institute Fellow Dorian Warren to describe today’s employers as “mini-dictators,” and as more public funds are diverted to private business owners, that comparison is only becoming more literal.

If conservative policymakers succeed in their nationwide effort to eliminate collective bargaining rights and neutralize already weakened unions, conditions aren’t likely to get better for workers anytime soon. Business owners and corporate execs will continue to assert more and more authority, bending their workers’ will to their own while using those workers’ paychecks to solidify their power. But there’s still hope of turning things around and restoring a more balanced playing field. If more American workers take note of the fact that two of their least favorite people, the tax collector and their boss, are being combined into one entity, it might just spark enough anger for them to fight back. As the feudal lords eventually learned, the peasants were the ones holding the pitchforks.