Wal-Mart Tax a Flop in 49 States

The unions thought they had really achieved something when they muscled the political leaders in Maryland and got the Wal-Mart bill passed requiring the retail giant to provide health care benefits not required of smaller employers or pay significant new taxes. The AFL-CIO took their act on the road and tried to get other states to enact similar legislation. That effort has been a flop (from the Wall Street Journal):

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Mexico, so-called "fair share" legislation has either stalled or, in the case of Kansas, Louisiana and Missouri, been withdrawn.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.

I'll bet that before this is all done the Maryland law will be overturned and the unions will have failed in all 50 states.