There is a cynical point of view in the business world that the way you get rich is by spending, and risking, other people’s money. That’s a scheme that Walmart has long adhered to and the money it likes to spend most is our tax dollars.
Some call this corporate welfare; others call it socialized capitalism.
From Charlotte, North Carolina’s WCNC:
A proposal to demolish a nearly vacant shopping center and clear the way for a Wal-Mart store prompted questions Monday on the use of tax dollars to help the world’s largest retailer.
The 155,000 square-foot store would be built on the site of the Amity Gardens shopping center, a strip mall with only one business still operating, on E. Independence Boulevard, near Albemarle Road.
Charlotte’s city council Monday received an overview of the project, which has been in the works for more than three years.
Councilman Michael Barnes expressed concern over a proposed $500,000 economic development grant from the city to the project’s developer, Charlotte-based Faison Enterprises.
“I have a good deal of heartburn helping the world’s largest retailer build a store,” Barnes said.
I feel Councilman Barnes’ heartburn for two reasons.
First, Walmart isn’t getting a loan, not even a low-interest loan; it’s getting a grant, a flat out gift of $500,000 that it will never, ever have to return to the public treasury.
Second, not only will Charlotte never see a check for $500,000 from Walmart, it is not even likely to see a return in the form of property or sales taxes from the new store.
Why not? It’s simple math. The backers — read despoilers who want their money up front so they can get out of town with it — claim that the store will generate $114,000 in annual property tax payments. But what the backers aren’t saying is that Charlotte’s local economy is a closed system with a finite amount of money in it.
The Walmart store very well may cut that yearly check for $114,000 — although the company’s record on taxes is not all that friendly — but dollars spent at Walmart will be dollars not spent at other area businesses. Those businesses that are locally owned and which support the closed economic system by spending the money at other local businesses keep the economy alive.
Businesses like Walmart suck the money out of a local economy and send it out of state (to Arkansas) and out of the country (to China).
The result is a closure of local businesses that no longer pay property taxes or sales taxes and the net long-term result is a reduction, not increase, in the tax base.
Of course, by the time that happens, the politicians have all moved on to other jobs and the backers to other projects.
And Walmart banks another government handout.
Jeff Hess: Have Coffee Will Write.