A Pox Tax on Wal-Mart

An excellent idea -- I had written about Wall-Mart's impact on communities before: here, here, here and here My first link covers this interesting aspect of Wal-Mart's presence in a community: bq. One of the most telling of all the criticisms of Wal-Mart is to be found in a February 2004 report by the Democratic Staff of the House Education and Workforce Committee. In analyzing Wal-Mart�s success in holding employee compensation at low levels, the report assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children�s health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart�s 1.2 million US employees. bq. Wal-Mart is also a burden on state governments. According to a study by the Institute for Labor and Employment at the University of California, Berkeley, in 2003 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. In Georgia ten thousand children of Wal-Mart employees were enrolled in the state�s program for needy children in 2003, with one in four Wal-Mart employees having a child in the program. Well -- people seem to be wising up to this. Hat's off to Montana for this bit of legislation. The story is from Reuters: bq. Montana Debates Special Tax on Wal-Mart, Others Montana's state legislature is targeting the big-box megastores that have taken the place of the old Western general store, weighing a special tax to offset welfare costs for low-paid employees of the retailers. bq. A bill up for debate on Tuesday calls for taxing retailers like Wal-Mart , Target and Costco for each store with more than $20 million in sales. bq. State Sen. Ken Toole, D-Helena, the bill's sponsor, says Montana residents are tired of subsidizing big-box stores whose low prices -- and high profits -- depend on paying workers low wages. bq. "When you don't pay workers, they get public assistance," he said. "Guess who pays for that?" bq. A state Senate tax panel is scheduled to hear the bill, which has irked retailers and prompted Costco to postpone plans to build a larger store in Kalispell, population 13,000, in the northwest corner of the state. My issue is that they are painting Costco with the same brush - Costco actually treats their employees pretty well and pays them working wages. The tax is a great idea for minimum-wage sweatshop boxes but it should be graduated. If a store has a median wage of $10, it should not have to pay this.