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Montana to levy tax on Wal-Mart?


Flying_Mollusk
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Lawmakers debate whether behemoth retailers should pay to offset welfare costs for low-paid workers.

February 16, 2005: 7:45 AM EST

 

MISSOULA, Montana (Reuters) - 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.

 

A bill up for debate Tuesday calls for taxing retailers like Wal-Mart (Research), Target (Research) and Costco (Research) for each store with more than $20 million in sales.

 

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.

 

"When you don't pay workers, they get public assistance," he said. "Guess who pays for that?"

 

The measure would impose a 1 percent tax on stores with more than $20 million in sales. It would rise to 1.5 percent for more than $30 million and 2 percent for sales of more than $40 million.

 

The tax would apply to 160 stores, accounting for about half the state's total retail activity, and funnel about $20 million a year to state coffers, Toole said.

 

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.

 

"We're waiting to see how the legislation shakes out," said Doug Schutt, head of operations for Costco's northern division. "The bill singles out retailers, and we think that's unfair."

 

The proposed levy -- in a sparsely populated state with no sales tax -- would apply to stores whose part-time employees make up more than a quarter of the workforce and whose full-time workers earn annual compensation of less than $22,000.

 

Heated debate

Foes of the legislation say it discriminates against high-volume merchants. "It's not the government's job to pick winners or losers in a competitive marketplace," said Wal-Mart spokesman Nate Hurst.

 

Although Toole didn't know how much the state was paying to provide services to Wal-Mart workers, he pointed to a study released last February by Rep. George Miller that concluded taxpayers pay about $421,000 a year for every Wal-Mart store with 200 employees.

 

Wal-Mart's Hurst said the discount chain pumped millions into the Montana economy last year and bought more than $39 million in goods and services from local suppliers.

 

University of Montana economist Thomas Power said claims by retailers that they would have to scale back operations or raise prices are exaggerated. "Big-box stores are fighting to get into these markets," he said.

 

The proposed tax met mixed reviews from shoppers at the Wal-Mart Supercenter in Missoula, a city of about 60,000 in western Montana. "If prices have to go up, so be it," said Mary Karen Caraway. "These stores should be taking responsibility for their own employees."

 

But another shopper, Bob Rasmussen, said retail chains should not be singled out: "You can't just go after the big ones when you have small businesses that aren't paying much and don't have benefits."

 

 

 

http://money.cnn.com/2005/02/16/news/fortu...dex.htm?cnn=yes

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Although inherently this sounds like a bad idea. If it saves individual taxpayers a good sum of money then by all means do it. Let walmart pay for its own mess

687320[/snapback]

 

Agreed. My disdain for Wal-Mart makes me happy to read this.

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Although inherently this sounds like a bad idea. If it saves individual taxpayers a good sum of money then by all means do it. Let walmart pay for its own mess

687320[/snapback]

 

Agreed. My disdain for Wal-Mart makes me happy to read this.

687332[/snapback]

 

Walmart is the devil but they have such good deals!!!!

687337[/snapback]

 

*Drinks Wal-Mart water*

 

24-20oz. bottles for $5

 

:notworthy

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