NCPA - National Center for Policy Analysis


January 16, 2006

Last week in Maryland, the state legislature overturned the veto of GOP Governor Robert Ehrlich and passed a bill forcing any employer in the state with more than 10,000 employees to spend at least 8 percent of its payroll on health care or pay the state the difference. The legislation was dubbed "The Wal-Mart Bill," which in part it is. But no one should think this will be an isolated political event, says the Wall Street Journal.

The national AFL-CIO now plans to use the Maryland law as a model for legislation in other states. Union chief John Sweeney has announced a campaign to enact "Fair Share Health Care Legislation" in more than 30 states. Washington and New Hampshire will be early targets.

The details vary by state, but already it's clear the new tax would eventually hit companies a lot smaller than Wal-Mart:

  • In Rhode Island, proposed legislation takes aim at businesses with only 1,000 employees.
  • In other states proposals would mandate payouts of 9 percent or more.
  • Once the principle is established that employers must allocate a certain share of their payroll to health care, it becomes easier to gradually extend the mandate to all businesses.

Rather than reform Medicaid to control its costs or stop its rampant fraud, politicians find it easier to sock it to private business. One result will be that companies will create fewer new jobs, as in Old Europe, says the Journal.

What's really going on here is an attempt to pass the runaway burdens of the welfare state on to private American employers. As we're learning from Old Europe and General Motors, this is bad news for both business and workers in the long run. The United States doesn't need a revival of HillaryCare on the installment plan, says the Journal.

Source: Editorial, "HillaryCare Returns," Wall Street Journal, January 16, 2006.

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