Wednesday, March 26, 2008

Walmart Keeps Your Sales Tax

Municipalities are permitting "tax increment financing" that allows big chains Walmart and Target "to keep the sales taxes that you are forced to pay at the tax register," tax expert David Cay Johnston said on the television interview program "Books of Our Time," sponsored by the Massachusetts School of Law at Andover and broadcast by Comcast."

Instead of that money going to the schools and the fire department and the police department and the library, it is funneled through a mechanism of local government, usually a special authority, to finance the purchase of municipal bonds so that means that the wealthy underwriters and the lawyers and auditors all get a piece of this money to buy the land and build the store," Johnson told TV host Lawrence Velvel, dean of the law school.

This is ridiculous. Sales taxes pay for our schools, our roads, our police and fire departments, etc. It's not meant to line the pockets of rich corporations.

Subsidizing retail companies does not benefit society, according to Johnson.

Johnston pointed out: "Subsidies to retail cannot make us wealthier. Retail is at the end of the economic line. If you want to subsidize things, first subsidize education, then subsidize basic research, then subsidize applied research and development and subsidize infrastructure---rails and canals and highways---and maybe in some cases manufacturing and mining to get something going. But the least bang for the buck, and often the negative bang for the buck, would be subsidizing retail. What's happening is wealthy families, the richest families in America, are getting welfare and they apparently have no shame about this."

Hit the link to read the full article.

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