Health care tax to target big employers

The Baltimore Sun ^ | April 6, 2005 | David Nitkin

[RebelBanker]

Senate joins House, OKs bill that in effect applies only to Wal-Mart; Ehrlich might veto measure; Low spending on benefits would trigger penalties

Maryland would become the first state to tax large companies that failed to meet a mandatory level of employee health-care benefits under a bill approved yesterday by the state Senate.

The measure would affect one corporation, retailing behemoth Wal-Mart Stores Inc., which sent representatives from its Bentonville, Ark., headquarters to argue against it at committee hearings this year. But other, smaller businesses worried that the measure could be altered to include them in the future.

-snip-

As a practical matter, four large Maryland employers would be covered by the bill: Wal-Mart; Giant Food Inc.; Hopkins; and defense contractor Northrop Grumman. But only Wal-Mart would be required to pay the tax because it does not reach the 8 percent threshold.

[NittanyLion]

For retiree medical, they are often shedding it in one big swoop - wake up one morning, its gone.

Yes, because the government has set up an atmosphere that incents those private firms to do so. Remove that atmosphere, and firms will stop doing that (or individuals will get their own healthcare).

The concept of finding root cause and addressing it really isn't that difficult. I'm surprised you continue to struggle with it so mightily.

[NittanyLion]

I agree with you.. this is why I support William Frist for the next president. We need reforms of our system, aka breaking down all the myriad of rules, to allow this kind of progression. He is already talking about that.

A lot of academics are also starting to publish articles regarding the necessary reforms. Check out this excerpt from Michael Porter.

oceanview, take a look at this as well. It may help clear up some of your misconceptions; Porter argues that neither government nor businesses should be paying for healthcare.

[JarheadFromFlorida]

Extortion by any other name is still extortion. Notice how liberals love to give away everything that they don't own?

[Kieri]

Hey, what's the problem? Maryland is just enacting what MICHIGAN has done for years - tax employer health care plans!

Of course, Michigan has one of the highest tobacco taxes in the nation and now officially has the highest unemployment rate in the country, not to mention a hostile SBT that makes it hard for businesses to compete.

Of course, if Maryland WANTS to be more like Michigan . . .

[RebelBanker]

"The power to tax is the power to destroy." Giant Food's lobbyists are trying very hard to get the People's Democratic State of Maryland to help them compete with WalMart by tilting the playing field. Thieves.

[oceanview]

I'm all for any reforms.

But with regards to funding (and keeping the system private), the 401K model via-a-vis MSAs is the best in my opinion. The key to why 401Ks are popular and successful is the employer match. Without that employer match, employees have less incentives to contribute their own pre-tax money. When an employer match exists, employees sign up with their own pre-tax dollars in droves. Now of course the government doesn't mandate employer match on 401K plans, but I think the model would have to be different with health care.

Give people the chance to have a "do what you want" MSA, where they contribute AND their employer matches (some portion), with a set aside for portable retiree medical so I can work at 3 different companies 10 years each and still have 30 years "credit" towards retiree medical - and we can successfully keep the system private and improve it.

The money has to come from somewhere, and I just don't think most people would be able to fund it totally from their wages alone.