Wal-Mart's Tax On Us
Greg LeRoy
November 09, 2005
Greg LeRoy is the author of The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation and executive director of Good Jobs First . This piece originally appeared on Alternet.org.
Wal-Mart, the Alpha Dog of discount stores, has also become the Alpha Hog at the public trough.
The phenomenal growth of the world's largest corporation has been supported by taxpayers in many states through economic development subsidies. A Wal-Mart official once stated that the company seeks subsidies in about a third of its stores, suggesting that more than 1,100 of its U.S. stores are subsidized. A national survey by Good Jobs First in 2004 looked at 160 stores and all of the company's distribution centers—and found that more than 90 percent of them have been subsidized. Altogether, 244 subsidized facilities in 35 states received taxpayer deals of more than $1 billion.
The economic impact of these subsidies on small businesses is given a human face in one powerful segment of Robert Greenwald's new documentary, "Wal-Mart: The High Cost of Low Price." The sweetheart deals given to two Wal-Mart Supercenters in Hamilton, Mo., undermined Red Esry's four family-owned grocery stores. Esry watched his sales plunge as soon as the Supercenters opened—he couldn't compete with Wal-Mart's prices and lost almost half of his business virtually overnight.
In the film, Esry's wife ruefully recounts how her husband went to City Hall to ask for a property tax abatement to match Wal-Mart's subsidy, but was turned down. Esry cut costs, but refused to stop paying his employees a good wage and continued to provide them with full health-care benefits and a pension package. Red Esry's story is being played out in thousands of communities across America.
Giving subsidies to suburban retailing is bad policy on many levels. The proliferation of far-flung stores contributes to sprawl and its many problems: undermining traditional downtown business districts and worsening traffic jams and air quality. The diversion of tax dollars into the coffers of developers and big retailers takes much-needed revenues away from public schools and other services. The low-wage jobs created in the malls do little to stimulate the economy and actually serve as a drag, given that workers with McJobs need more assistance from taxpayer-financed safety-net programs.
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