Picture this: You walk into your local grocery store in New York City. You load up your cart with fresh produce, milk, and coffee. You get to the register, and the total drops by thirty percent.
Sounds like a dream, right?
Well, if the city’s democratic socialist contingent has its way, this isn’t just a dream—it’s the new order. Their plan? Have the city operate grocery stores at a loss, slashing prices across the board by thirty percent.
And how do you pay for a government-run grocery chain operating at permanent losses? Just tax the rich! The “fat cats.” At least... the ones who haven’t already packed their bags for Miami.
It sounds easy. But in the real world, this model ain’t just flawed—it’s counter-productive and destructive.
Profit and Loss
Let’s talk about profit margins. I know. Socialists hate them. But all organizations have to bring in more money than they spend, or they will run out of money. Even the government.
Now, the average grocery store operates on a margin of one to three percent. It is one of the most volume-dependent, low-margin industries on the planet.
Slashing prices by thirty percent isn’t just cutting into profit—it’s running a massive, continuous deficit on every pineapple or box of Poptarts that leaves the shelf.
When a private business runs at a loss, it goes bankrupt. When a government runs a program at a loss, it raises taxes!
But here’s rule number one of municipal finance: You can never just tax the rich.
To cover systemic losses at this scale, the tax base expands to everyone in the city. Which leads to a glaring irony: the working-class New Yorkers who are supposed to be rescued by thirty-percent-off groceries end up funding those exact discounts through higher sales taxes, property taxes, and rising living costs elsewhere.
They aren’t saving thirty percent. They’re just paying for their groceries twice—once at the register, and once on tax day.
Bodega Backfire
Things get worse when you look at who gets hurt by this first.
New York City runs on its bodegas, corner markets, and independent grocers. These small, family-owned businesses cannot lower their prices by thirty percent to compete with a subsidized store down the street. If a state-backed market opens nearby, local corner stores risk going under.
Now, the socialist planners might say: “That’s fine, we’ll just subsidize the bodegas, too!” But think about that logic for a second: Subsidize state stores so they undercut local bodegas; Subsidize local bodegas so they can survive the state stores; and raise taxes on the entire city to fund both subsidies simultaneously. See why this ain’t too bright?
And guess who gets caught in the crossfire? It’s not just mega-corporations. It’s community grocery co-ops—like Key Food or Foodtown—where workers actually own the operations. The very worker-owned models democratic socialists claim to protect will be crushed by socialist competitors!
Now let’s follow the tax trail.
About 44% of NYC’s local tax revenue comes from property taxes, with another 13% coming from sales tax. When property tax rates are bumped up to cover expanding municipal subsidies, who actually pays? The common assumption is that property owners and landlords will just absorb the costs. But property owners aren’t all rich. And landlords pass costs to renters. Raising taxes, especially property taxes, leads directly to higher rents.
When rents spike, the people will cry out! So the next lever they’ll pull is rent freezes.
But with rent frozen, property owners won’t collect enough revenue to maintain their buildings and cover their property taxes. The quality of housing will drop. Buildings will degrade. Eventually, the city will have to step in to take over tax-delinquent properties—creating another municipal sector that requires... you guessed it, more subsidies!
New York City already carries one of the highest tax burdens in the nation.
When you build an entire municipal economy around price controls, artificial discounts, and compensatory subsidies, the math won’t math. You cannot endlessly subsidize basic consumer goods by taxing the very population that buys them.
At a certain point, the state isn’t redistributing wealth from the top down—it’s just shuffling money from the citizen’s left pocket to their right pocket, while skimming half of it on administrative costs. You know, unproductive DSA jobs.
Neither good intentions nor abject stupidity can ever repeal the law of supply and demand.
If you want truly affordable groceries, you don’t want government-run grocery stores funded by endless tax hikes. You need efficient supply chains, lower barriers to entry, and economic policies that leave more money in people’s pockets.
So, either the DSA needs an Econ 101 lesson, or they are actively trying to destroy NYC’s free enterprise system to be replaced with a government monopoly.
I’m Max Borders. Let’s criticize by creating.
