Small Business Agenda 2009: A Bill That May Haunt Obama

Coyote Blog resurrects a bill Obama co-sponsored  last summer that business owners may want to keep in mind looking ahead to 2009. This bill, which never made it out of committee, would have made several requirements for employers to qualify for a federal income tax credit.  The lucky ones are dubbed "patriot employers," in the vein of a similarly jingoistic piece of legislation most of us remember.

Here are some of the things you have to do to be a "patriot employer" according to the bill:

--maintain your headquarters in the U.S.

--pay at least 60 percent of your employees' health care premiums

--if you have at least 50 employees, you have to maintain your ratio of workers outside the country compared to workers outside the country.

It's not just big, multinational businesses that have to worry about that last provision.  It's quite common for small businesses to have employees in foreign countries--thanks to Skype, it's cheaper to maintain that than ever. Do we really want those small-business owners having to check the math before they can expand their foreign operations?

The business I interviewed in that story, Ooovoo Design, gives jobs to workers at Vietnamese women's cooperatives.  According to Obama's bill, that business can only be patriotic if it maintains a balance between its U.S. employees and its Vietnamese employees--effectively denying jobs to those women should the business want or need to hire more.

But put aside who is patriotic or not--I think most people would agree that we don't want a tax disincentive for businesses to act in favor of human rights.  But that's exactly what the Patriot Employers Act would do.

William Buiter and Anne Sibert of the Centre for Economic Policy Research have called Obama's bill "reactionary, populist, xenophobic and just plain silly."

But none of this criticism matters if Obama never brings up the issue again.  It's unknown if the Patriot Employers Act will see a second life with the Obama administration.