Wal-Mart Tax Fails to Gain Momentum

July 6, 2006

The Wall Street Journal editorialized today about the AFL-CIO’s inability to pass its “Wal-Mart Tax” across the country in the wake of Maryland’s decision to institute such a tax. From the Wall Street Journal (subscription required):

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.

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.

The “Wal-Mart Tax” is bad tax policy as Chris Atkins pointed out in a fiscal fact in March. Maybe lawmakers across the country heeded his advice:

Maryland ’s Fair Share Health Care Fund Act will not have much impact on Maryland ’s business tax climate in the short term. However, if it is expanded to other companies, it will be an additional impediment to Maryland ’s ability to attract jobs and investment in the long term. Maryland already has the 17 th highest state and local tax burden in the nation. The additional burden of the Wal-Mart tax will only worsen the state’s current situation, and will do nothing to help the workers it is intended to help.

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