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Private businesses shouldn't be a social safety net

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Sugar Daddies in Search of a Vote

Private businesses shouldn’t be a social safety net

To paraphrase Mark Twain, poor legislation can spread across the country while good sense and logic are still putting on their shoes.

Earlier this year the Maryland Politburo … er, Legislature passed, over Republican Gov. Robert Ehrlich’s veto, a law that demands companies with more than 10,000 workers spend at least 8 percent of their payrolls on employee health insurance. Companies that don’t are required to pay the difference to the state in higher taxes.

We say “companies” (plural), but it’s called the Wal-Mart bill because that’s the only company in the state the bill affects—by design. Call it Maryland’s warm welcome to the world’s largest retailer.

But there is another name for this type of legislation: play or pay, because if a company doesn’t provide insurance (play) it has to pay a tax to the state.

And guess what, no sooner was the ink dry on the Wal-Mart bill than a Maryland Democrat introduced legislation to make companies with less than 10,000 workers provide health insurance or pay a tax.

You’d think that state legislatures might run from this type of legislation out of fear that employers would move out of, or choose not to relocate in, the state.  But more than 30 states have introduced similar bills—or worse.

Rhode Island, for example, is considering a law that would affect businesses with just 1,000 employees.  A few people who work at a company with, say, 1,003 workers may lose their jobs so the business can get below that magic 1,000-worker mark.

But what’s a few lost jobs compared to a chance to be duplicitous.

The state legislators are providing coverage, but forcing someone else (private business) to pay for it—and then basking in the glow of voter praise for doing something good.   

What a sham!  Anyone can be generous—if they can pass the bill for their generosity on to others.

Government far oversteps its authority when it forces a private business to be a social safety net or face punishment.  By forcing companies to do what the lawmakers refuse to do themselves—provide health coverage to lower-income workers—it is clear they are no longer guardians of liberty but sugar daddies in search of a vote. Though that may not be fair to sugar daddies, since they at least spend their own money.

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Written By

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter: @MerrillMatthews.

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