A Maryland tax just for Walmart

[jgibson2[$]]

Sorry, the Sun is a subscription site, but here goes:

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.
.......
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.


Not for profits have a 6 percent limit. Giant, Hopkins, and Northrup Grumman almost certainly have much higher pay rates. Walmart must have a lot of part-time employees.


The bill sounds like a good idea to me, but I have to admit that I have reservations after reading that Phil Jimeno, conservative Democrat and representative from my district, voted against it. He usually has very good reasons for what he does. I'm going to have to write and ask him what's wrong with the bill and how it could be better.

[realtraveller]

Today, the Washington Post is reporting that WalMart will now put its plans to build a distribution center in Maryland on hold. The center was to have employed up to 1,000 people.

WalMart is also alleging that the bill is being pushed by its competitors in the grocery business who fear WalMart's lower prices will drive them out of business. It's not being pushed out of the goodness of their hearts and concern for future WalMart employees.

http://www.washingtonpost.com/wp-dyn...-2005Apr6.html

I'm surprised no one else on the board has weighed in. The very name WalMart usually causes some discussion.

And then there's that issue raised in a prior thread about legislation tailored to affect just one being very suspicious. :zip:

[jgibson2[$]]

Maybe people share my feeling that they don't quite know enough to comment. It's SB970. I haven't heard back from Senator Jimeno, but I'm sure I will.

One criticism of Walmart is that many of their employees are on medical assistance or medicare -- but if you look around Walmart, you see people who are clearly developmentally delayed, over 65 or handicapped. So is this an chicken or egg question? I don't know. I want to hear from my state senator.

[erik_kosberg]

For better or worse (FWIW, I think for worse) this country largely ties health coverage to employment. If government wants to require that large businesses meet certain minimum requirements for their employee’s health coverage, fine. Wal-Mart can choose to avoid the tax by meeting the minimum requirements.

[wivabef]

erik_kosberg said

For better or worse (FWIW, I think for worse) this country largely ties health coverage to employment. If government wants to require that large businesses meet certain minimum requirements for their employee’s health coverage, fine. Wal-Mart can choose to avoid the tax by meeting the minimum requirements.

It is important to remember, too, that employers in countries such as Canada area also required to pay into the healthcare system. The difference with Canada is that there are no special breaks nor singular expectations for certain employers.

Perhaps this is the way our government is slowly working its way to a national health plan...albeit back asswards, as usual!

[realtraveller]

An idea was floated (can't remember if it was Arnold or a legislator) in California to require everyone to have health insurance much as all drivers must have car insurance.

That way, it was said, young, healthy people couldn't opt out and would have to contribute to the pool. You couldn't buy that big screen TV instead of health insurance and then just hope for the best. There would be some sort of subsidy for the indigent.

Apparently, Switzerland has this system.

What the penalties would be for not doing this and what would happen when those who chose to ignore the law got sick was never really explained.

[erik_kosberg]

Seems like that would be very difficult to implement. At least with cars, there’s an underlying assumption that people are at least wealthy enough to buy a car, maintain it, pay for gas, etc., insurance being just another cost of ownership. Those who can’t afford to own a car can “choose” to use mass transit where available, bike, walk, etc. Granted that in many parts of the country a car is all but a necessity and “choosing” to not be a car owner because of not having the extra money may severely limit employment opportunities, but at least it’s theoretically optional to own a vehicle. The “some sort of subsidy” is a big question mark.

I just don’t understand why we can’t have some form of single-payer health coverage like practically every other economically advanced democracy. Sure, one could point to problems with the British or Canadian or Norwegian healtcare systems, but it’s not as if our system doesn’t have its own set of problems

[poseidon]

Sorry, I don't like state-imposed healthcare. You should be able to partake in the risk of not carrying health insurance if you so choose -- and that's for individuals and corporations alike.

Sure, WalMart employs some developmentally-challenged people and some older people -- something that a lot of other businesses don't. Let's not forget all of the more "mainstream" people that WalMart employs. There's a lot more to WalMart than the greeters and the checkers (that's not coming out right but I think you can get my drift here).

The loser at this end won't be WalMart. They can simply choose to say, "Screw it, we're outta here" and leave. Meanwhile, you'll have that niche that WalMart fills empty, and you'll have a lot of people who would normally get employment through WalMart having a much rougher time getting employment. You'll also have WalMart's target consumer -- single mothers -- having to find someplace else to shop.

Or, WalMart can choose to follow the rules and raise their prices, thereby cutting jobs and making people's already stretched dollar (because oil is so cheap) purchase even less than it does now.

Either way, WalMart won't be the loser here. Maryland, however, will.

[frazzledspice]

Wal-Mart will pay the tax, I'm sure.

They would rather pay the tax than cover the employees (because then their employees in the other 49 states would expect to receive the same benefits, and the union reps who are always trying to organize Wal-Mart employees will be quick to point this out.)

[jgibson2[$]]

poseidon said

Sure, WalMart employs some developmentally-challenged people and some older people -- something that a lot of other businesses don't. Let's not forget all of the more "mainstream" people that WalMart employs. There's a lot more to WalMart than the greeters and the checkers (that's not coming out right but I think you can get my drift here).

Jeff,
I'm not sure you got what I was saying. My point was that those categories of people will be on Medicare or Medicaid, regardless of who employs them, because they have either aged into it or qualify as handicapped. They're not on government subsidized healthcare because their employer is too cheap to buy something else for them. The question then becomes, does Walmart pay less than the 8% required because they hire people that many employers won't, or is there another reason.

BTW, Hopkins, one of the largest employers in Maryland, only has to pay 6% because they're a non-profit. They do actually provide a decent healthcare plan for their employees, but given the number of high-salary employees (physicians, scientists, etc) they employ, getting the number to 8% might be tough for them.

[jgibson2[$]]

frazzledspice said

Wal-Mart will pay the tax, I'm sure.

They would rather pay the tax than cover the employees (because then their employees in the other 49 states would expect to receive the same benefits, and the union reps who are always trying to organize Wal-Mart employees will be quick to point this out.)

The tax isn't a done deal. They're lobbying hard to keep it from passing. I'd expect them to go to court if it does pass. They might not have to. The governor has announced plans to veto it.

[jgibson2[$]]

Senator Jimeno's reply:

Thank you for contacting my office on Senate Bill 790- Fair Share Health Care Fund Act. This bill although well-intentioned, would impose an unfair burden on only one employer in the State of Maryland. The passage of Senate Bill 790 would make Maryland the first State in the nation to tax a large company that fails to provide health coverage for their employees.


This bill would target an employer that provides jobs to over 10,000
Maryland citizens, collects on behalf of the State of Maryland more than
$107.5 million in State taxes, and has paid more than $13.7 million in State
and local taxes. In addition the Company has contributed $2,294,884.00 to
local causes and organizations in the Communities they serve in the State of
Maryland and raised an additional $641,856 for a grand total of $2,936,740.


It is for the impact on this company, and the negative image this bill would
have on other businesses looking to expand or locate in Maryland that I
voted in opposition to Senate Bill 790. .


Sincerely,



Philip C. Jimeno

It sounds like the state of Maryland could potentially lose more than they could gain by this tax directed specifically at Walmart.

Next question, just how much of their payroll DOES Walmart spend on health insurance?

I found some more interesting items.

Here's a link to the actual bill

Then there's this 5 page Fiscal and Policy note

A few points from the above:

Failure to report this information may result in a $250 civil penalty for each day the report is not timely filed. Failure to make the required payment may result in a $250,000 penalty.

Doubtless cheaper than paying the tax. Maryland stands to lose a LOT if Walmart and other businesses opt out of the state over this bill.

Wal-Mart officials say the company provides health coverage to about 537,000 people, or 45% of its total work force. As a matter of comparison, Costco Wholesale provides health insurance to 96% of eligible employees.

Unfortunately, that's comparing apples to oranges. What is an eligible employee and how many of those does Wal-Mart insure?

Walmart also claims that 90% of their employees have health insurance - some, especially part-timers, are probably covered by a spouse or parent's plan. Others are covered by medicare.

But then there's this:

Some states claim many Wal-Mart employees end up on public health programs such as Medicaid. A survey by Georgia officials found that more than 10,000 children of Wal-Mart employees were enrolled in the state’s children’s health insurance program (CHIP) at a cost of nearly $10 million annually. Similarly, a North Carolina hospital found that 31% of 1,900 patients who said they were Wal-Mart employees were enrolled in Medicaid, and an additional 16% were uninsured.

It shouldn't be too tough to find out what the stats are for MARYLAND. It doesn't seem reasonable to me to base a law in MD on what other states are reporting without at least trying to find out whether or not Walmart is providing coverage here.