Posted 1:59 am Sunday, February 03, 2013
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Hobby Lobby can take care of itself
This is not our fight. Texas should stay out of the dispute between the federal government and Hobby Lobby — and like-minded businesses — and not subsidize corporate “conscience” decisions with state funds.
That’s exactly what House Bill 649 would do.
“House Bill 649 would exempt Hobby Lobby Stores Inc., the arts and crafts chain, and other ‘religiously-based businesses’ from state sales and franchise taxes if the federal government fines them for not complying with the Patient Protection and Affordability Act, according to [Rep. Jonathan] Stickland’s news release,” the Austin American-Statesman reports. “The tax credit would be limited to the amount of a federal fine that the company pays or the amount of state tax the company owes.”
Strickland, a Bedford Republican, believes “When a business is being stressed nearly to the point of bankruptcy by punitive federal taxes, of course the state should give them relief.”
Wait a moment. What business (or family, for that matter) isn’t being stressed by “punitive federal taxes”? And why is it the responsibility of the state — which collects taxes to provide different services — to provide “relief”?
Sure, Strickland means well. Obamacare will be a costly proposition, no doubt about it. You simply can’t insure millions more people without the costs to everyone rising.
But Hobby Lobby can take care of itself. It has more than 500 stores in 41 states, with revenues of $2.28 billion (according to Forbes). It also faces fines of $1.3 million for every day it violates Obamacare mandates. Would Texas pick up the whole tab, or just the portion of the fine that stems from stores here? Strickland doesn’t say. The bill isn’t clear.
What’s clear is this is a symbolic gesture, like Gov. Rick Perry refusing to expand Medicaid or establish insurance exchanges.
But it’s the wrong symbolic gesture. Texas’ core objection to Obamacare is that it violates the principle of federalism — the proper separation of powers between the states and the federal government. Remember the Tenth Amendment? That should have made it pretty clear the states are responsible for issues such as health care (the U.S. Supreme Court got around that by saying the feds are responsible for taxes, which Obamacare is, but isn’t).
Yet a move like Strickland’s is itself a violation of federalism. The state is going to compensate a private firm because the federal government did something bad to it? That’s not the state’s role.
Strickland, a Bedford Republican, believes “When a business is being stressed nearly to the point of bankruptcy by punitive federal taxes, of course the state should give them relief.”
Wait a moment. What business (or family, for that matter) isn’t being stressed by “punitive federal taxes”? And why is it the responsibility of the state — which collects taxes to provide different services — to provide “relief”?
Sure, Strickland means well. Obamacare will be a costly proposition, no doubt about it. You simply can’t insure millions more people without the costs to everyone rising.
But Hobby Lobby can take care of itself. It has more than 500 stores in 41 states, with revenues of $2.28 billion (according to Forbes). It also faces fines of $1.3 million for every day it violates Obamacare mandates. Would Texas pick up the whole tab, or just the portion of the fine that stems from stores here? Strickland doesn’t say. The bill isn’t clear.
What’s clear is this is a symbolic gesture, like Gov. Rick Perry refusing to expand Medicaid or establish insurance exchanges.
But it’s the wrong symbolic gesture. Texas’ core objection to Obamacare is that it violates the principle of federalism — the proper separation of powers between the states and the federal government. Remember the Tenth Amendment? That should have made it pretty clear the states are responsible for issues such as health care (the U.S. Supreme Court got around that by saying the feds are responsible for taxes, which Obamacare is, but isn’t).
Yet a move like Strickland’s is itself a violation of federalism. The state is going to compensate a private firm because the federal government did something bad to it? That’s not the state’s role.
As University of Texas at Austin economist Daniel Hamermesh points out on the excellent Freakonomics.com blog. “Such a bill means Texas would be giving firms incentives to thwart federal law. It also opens up the possibility of much broader tax offsets.”
He’s right. Think about those “fiscal cliff” tax hikes on higher incomes.
“Why not take the logic of this bill one step further and offer tax reductions (sales tax, since we have no income tax) to very high-income families?” Hamermesh asks.
Lots of bills get filed at the start of a legislative session; many are just trying to make a point. This bill, on the other hand, makes a really, really bad one.
He’s right. Think about those “fiscal cliff” tax hikes on higher incomes.
“Why not take the logic of this bill one step further and offer tax reductions (sales tax, since we have no income tax) to very high-income families?” Hamermesh asks.
Lots of bills get filed at the start of a legislative session; many are just trying to make a point. This bill, on the other hand, makes a really, really bad one.
