Wednesday, February 15, 2006

Does the “fair share” law violate due process?

In the hillarious series “Fat Pizza” Habib sees a “Police now targetting” sign which usaully has “speeding”, “drunk driving”, etc inserted at the end. However this sign states “Police now targeting _Lebanese_”. Later on sees another sign that announces they are now targeting him! The shareholders of a certain large cheap retail chain may now be empathising with the poor Habib.
Health care “reformers” passed a “fair share law” in Maryland designed to force retailers that employ over 10,000 workers to spend at least 8% of their payroll in that State for health benefits. Normally I’d dismiss this as another know-nothing interference in the market that overrides the desires of those it intends to benefit and damages firms that try to provide jobs and products that Marylanders want. But there is a more sinister implication this time because the plural is inappropriate, only 4 firms employ that many Marylanders and three of them already contribute more than that, leaving only one firm affected Walmart. This raises the question is this bill designed to punish Walmart for alleged bad behaviour, and if so does the fact that it was passed in legislature rather than tried in court mean that Walmart’s due process rights have been violated?

Walmart (or if you don’t believe in corporate rights, it’s shareholders) have the right to a fair trial before punishment in the form of reduced profits is inflicted. Laws that affect multiple parties are not punishment for a particular party in themselves because those affected regardless of whether they did anything to encourage the law’s passing. For instance say that logging of old growth forests was banned, affecting ABC timber, DEF Lumber, GHI forestry and the XYZ building (materials) inc., logically nobody would pass such a bill solely to punish XYZ. The present bill could and indeed to some extent probably was pased for exactly that reason. If such a procedure is allowed then government could control any firm by threatening it with tailored legislation that damages only that firm. This would constitute an unconstitutional de facto control of private property. In effect the mere capacity to inflict such harm would be a partial taking of private property without compensation, illegal under the 5th amendment.

I am not saying by this that firms can’t be punished for behaviour that is deemed to be against the public good. If Walmart or any other firm breaks the law then a trail and punishment if convicted is appropriate. Unless of course it’s not which happens*. If the “public” decide that certain behaviour that wasn’t illegal before should be now then any firm continuing that behaviour also should be tried for that behaviour and if the behaviour is proven punishment should be inflicted. However the passing of a law that disadvantages Wal-Mart is itself a punishment and one that predates any trial, indictment, or even legal investigation of the alleged wrongdoing. Various people have for some time accused Walmart of various evils at times validly (e.g. using eminent domain) at times speciously (the accusation that it doesn’t pay “enough” to it’s workers). Whether or not you agree that it did these things or that they deserve punishment is beside the point. If the government wishes to punish people for such behaviour they can pass a law that allows for charges and trials of those found doing it. They may not simply form a plan to punish those they see as committing these evils and implement it the due process of law.

For example, suppose that someone owned the only two storey house in the village. Suppose also that this person gave loud late night parties that disturbed the rest of the village. If their villagers were to inflict a fourfold tax increase for multiple storey buldings that would be an inappropriate way to punish the wrongdoer. The correct way would be to ask the police to investigate the noise or to take accurate sound readings and thereby enable a prosecution if the parties actually broke the law.
A problem with this approach is that it may depend on the legislation being passed for the purpose of punishing the firm, rather than from desire to improve public policy. This raises the question, “Whose purpose?”. The legislators? The lobbyists who pushed for it? The members of the public that supported it? Who’s intent is relevent here? I will argue that it is illogical to conclude that the purpose of this legislation is improving public policy. The alleged problem that the legislation was supposed to fix is firms not helping relieve the burden of free health care. However there is no good public policy reason why they should, or given that they should that it should be through providing health insurance for their workers. Indeed it makes little sense to have a system where provision of free health care for the uninsured raises the premiums for the insured. The increase in premiums causes people who otherwise would have insured to not do so. This causes loss of profits from the insurance company, increasing costs for the State system and loss of benefits to the individual or family. The reduced numbers of insured and increased number of recipients of free care mean that less policyholders have to pay the costs of more uninsured, accelerating the process. If there were a genuine wish to make companies pay their “fair share” for providing free health care the State could introduce a sales tax, company tax etc. and use the proceeds to reduce the amount that free health care impacts on the insured. This would result in lower premiums, more policyholders and less aid recipients. The fact that this is not tried shows that the “fair share” law is actually an “unfair steal” law.


Andrew Langer said...

Michael -

Been a long time! Cool blog! Feel free to check out mine:

Just wanted to stop by to let you know that after many years masquerading as other people, Scott Nudds has returned to sci.environment under his own name.

Likewise, after a somewhat-shorter absence, Ilena Rosenthal returned to ASBI, as well as sci.environment, where's she's attemptint to instigate with me once again.

I haven't posted to usenet in months (almost a year), but wanted to let you know that two of Usenet's most notorious kooks have returned!

Take care!

- Andrew Langer

Andrew Langer said...

Oh, and this is a really good post on due process and MD's Wal-Mart bill. Really cogent arguments.