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Without the Federal Arbitration Act, states could clearly ban forced arbitration agreements within the normal course of contract law and labor law. Federal statutory preemptions of this should not be construed more narrowly than the federal law says.

The Supreme Court has construed this preemption pretty broadly, but always in the context of contract enforcement or validity.

I can indeed imagine that the Supreme Court would write disapprovingly about the tactic of using a financial incentive to discourage forced arbitration clauses, but that's very different from whether they'd go beyond that to actually strike down the tax credit, since the arbitration clauses would remain fully valid and enforceable either way.

As a matter of realpolitik, it matters that the tax hike in my idea is explicitly severable from the offsetting tax cut: most of the judges and ideologically related advocates who like forced arbitration also dislike higher corporate taxes. The only thing they could credibly do against this law would result in higher corporate taxes. A separately severable tax hike conducted in accordance with state law is clearly constitutional.




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