WSJ editpage: “fair share” a flop
Wall Street Journal - July 6, 2006
Wal-Mart Tax Fizzle
For anyone keeping score, AFL-CIO President John Sweeney has been
striking out in a surprising number of state capitals. Mr. Sweeney
launched a campaign in 33 states several months ago to force Wal-Mart
and other retailers either to spend more on health care or pay more
in taxes. His legislation was intended as a first step in mandating
employer-provided health care, and his campaign began as Maryland
enacted the first “Wal-Mart tax.”
Well, the early results are in, and the Sweeney tax has been a
political flop. Not a single state has followed Maryland’s lead, even
liberal Rhode Island. In 26 states from Maine to New Mexico, so-
called “fair share” legislation has either stalled or, in the case of
Kansas, Louisiana and Missouri, been withdrawn. With many state
legislatures wrapping up their work or already adjourned for the
year, it’s clear the anti-Wal-Mart groundswell isn’t coming.
New York was one of the last holdouts, and Long Island’s Suffolk
County has enacted its own version of the law. But for a state in
which unions enjoy broad political influence, the bill found few
friends in Albany and failed. Even Attorney General Eliot Spitzer
opposed it, telling the New York Post that the Wal-Mart bill is not
the “comprehensive reform” of health care the state needs. A
candidate for Governor such as Mr. Spitzer has to worry about job
creation, especially in a state from which young people and jobs are
both fleeing.
This isn’t what Mr. Sweeney hoped when he vowed at the National Press
Club in January that, “If they don’t give us a fair health plan
covering all families in all 50 states, we will give them hell in all
50 states.” The AFL-CIO had twisted enough arms in Maryland to enact
a law requiring employers with 10,000 or more employees to spend at
least 8% of their payroll on health care or pay the state the
difference. That law applies to only one company, Wal-Mart.
The Retail Industry Leaders Association, a trade group, is suing to
overturn Maryland’s Wal-Mart tax on the grounds that it violates the
Constitution’s equal protection clause and is pre-empted by federal
law regulating health benefits. Oral arguments in the case were heard
recently in U.S. District Court in Baltimore. And arguments will be
heard in a separate case challenging Suffolk County’s law later this
year in Brooklyn. Win or lose in court, the Wal-Mart tax has already
fizzled as a political cause.