Tuesday, December 28, 2004

Wally World vs Hightower

Jim Hightower has pointed out that Wal-Mart, which touts itself as a model of "free-market" success, actually has built its market dominance in large part by milking the taxpayers, having squeezed more than a billion dollars in subsidies from state and local governments, giving it a competitive advantage to clobber local businesses (often little mom and pop stores).

Sarah Clark, director of corporate communications at Wal-Mart, resonded by firing off a press release that claimed that Hightower's criticism was "full of inaccuracies." But she didn't dispute the key figure of one billion dollars in taxpayer giveaways to Wal-Mart as inaccurate.

Instead, she said that the company is a generous corporate citizen. "In the past ten years," Ms. Clark says,"Wal-Mart has paid $4 billion in property taxes alone...." But wait—it owed those taxes! This was not a "contribution," but a debt. Other businesses pay property taxes, too, yet they don't get a billion bucks in special subsidies. Then Ms. Clark notes that her company "generated $52 billion in sales taxes." But wait again—that's not Wal-Mart's money. It's money that local consumers paid to finance public services. This money is also the result of sales that the monopolistic giant took from local businesses. Wal-Mart doesn't expand a community's buying power—it just redistributes purchases from other stores to itself.

Ms. Clark claims that "Wal-Mart has remitted $192 million" in wage taxes. Once more, however, this money is not a voluntary contribution from a goodhearted company—it's taken out of the employees' wages, as required by law.

To see how Wal-Mart does indeed milk taxpayers, go to www.goodjobsfirst.org where you can read about the study they undertook:

In this extensively researched study, we show that the giant retailer has received more than $1 billion in economic development subsidies from state and local governments across the country. Taxpayers have helped finance not only Wal-Mart stores, but also the company’s huge network of distribution centers, more than 90% of which have gotten subsidies. The report also includes policy proposals, including a prohibition on subsidies to big-box retailers except in distressed areas that are underserved by retail outlets (and in those cases the recipient of the subsidy should be required to pay a living wage.)