The Advertiser (Honolulu, Hawaii)
March 29, 2006


They're kidding, right?

The state Legislature -- both houses, judging by the unobstructed progress of the bill so far -- seeks to create a new, tax-privileged class of company under the Responsible Business Corporation Act, now titled House Bill 3118.

To qualify, such a company would have to allow employees to nominate and elect at least 20 percent of the company directors, who would represent the workforce.

Another one-fifth of the board would advocate for the "public interest," though it's anything but clear what could fall under that category.

The final requirement for the incentive (a tax break) would be production of a yearly report detailing how the company benefited people other than its shareholders, if the company is publicly traded.

The proposal is, at best, silly and unproductive, and at worst, a loophole through which more business-paid tax revenue could leak needlessly.

Lowell Kalapa, president of the nonprofit Tax Foundation of Hawai'i, said the state shouldn't be underwriting businesses for doing something they should do on their own: being good corporate citizens.

And he's right.

The better role for government here is not to hand out candy to its model children in this paternalistic fashion. It's to create laws that draw the parameters of ethical behavior and establish the consequences for failure to comply. And it's to police these laws and see that justice is done.

Although many responsible companies discover that upholding the general welfare is also good business, it's the duty of government, not corporations, to serve the public interest.

And it's to focus on the many challenges to that service -- public education, housing needs, poverty and drug addiction -- that lie before elected leaders. They should keep an eye on that prize.

Copyright COPYRIGHT 2006 The Honolulu Advertiser