A Patriot Act For Business

An article from yesterday’s Wall Street Journal examines a bill introduced by Barack Obama that would offer tax incentives to “patriotic” corporations.

We read:

Along with Democratic co-sponsors Sherrod Brown and Dick Durbin, Mr. Obama introduced the bill in the Senate in August 2007. Recently in Janesville, Wis., he repeated his intention to make it a priority as President: “We will end the tax breaks for companies who ship our jobs overseas, and we will give those breaks to companies who create good jobs with decent wages right here in America.”

Mr. Obama’s proposal would designate certain companies as “patriot employers” and favor them over other, presumably not so patriotic, businesses.

The legislation takes four pages to define “patriotic” companies as those that: “pay at least 60 percent of each employee’s health care premiums”; have a position of “neutrality in employee [union] organizing drives”; “maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States”; pay a salary to each employee “not less than an amount equal to the federal poverty level”; and provide a pension plan.

In other words, a patriotic employer is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications. The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money. Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.

These are murky waters, and I claim no expertise. The WSJ’s argument against this proposal certainly seems reasonable, though. Read it for yourself here.

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  1. the one eyed man says

    In my view: an awful idea. Government ought not to meddle in the economy or try to pick winners and losers. The proposal is likely to be counter-productive, as other countries are incented to protect their own domestic industries. The economy grows as Citibank opens offices in Japan, Pfizer sells drugs in Europe, and Wal-Mart opens stores in Mexico. Those who are hurt by global trade are very visible — they’re standing on an unemployment line — while those who benefit are largely invisible. I like Obama, but this is political opportunism which will doubtless be quickly forgotten if he gets to the Oval Office.

    Posted February 29, 2008 at 12:01 pm | Permalink
  2. Malcolm says

    My sentiments too, Peter. Glad we agree.

    Posted February 29, 2008 at 12:09 pm | Permalink