Montana legislators consider tax on big box stores


Published on Tuesday, January 25, 2005 5:22 PM MST


That giant sucking sound you hear coming from the edge of town is the sound of money being taken out of your community by big box stores. They pay low wages, have a lot of part-time workers, don't pay benefits, and don't use local businesses for services. They drive sprawl development and increase the cost of local infrastructure from streets to sewers.

They corner the local retail market in everything from moth balls to milk duds, bundle up the money and send it back to their corporate office in some distant sky scraper. Your local furniture store, appliance dealer, pharmacy, and even the smaller grocery chains cannot compete against the big box and it's ability to squeeze a nickel from their workers, contractors and suppliers.

Box storeowners are quick to point out retailing is a low-margin business and stores live close to the edge in the competitive market. While this is true, the low-margin, high-volume approach to retailing generates huge profits for only a very few people sitting at the top. Five of the richest people in the world are members of the founding family of Wal-Mart. In 2004, Fortune magazine listed the Walton family fortune at $100 billion dollars. The Walton family can afford to pay a living wage - they choose not to.

Taxation Issues
Sen. Ken Toole

It's bad enough workers in these stores are struggling to make ends meet, but that's only part of the story. You and I pick up the tab when a box store doesn't pay its workers a living wage. Congressman George Miller recently released a detailed study of the cost of Wal-Mart to communities in California. That study estimated that a Wal-Mart store with 200 employees cost federal taxpayers $420,000 per year, or about $2,000 per employee in public services ranging from health care to housing. Box stores shift their labor costs onto the rest of us.

So, why not ask these big box stores to put money into the community and help out local small business at the same time? Seems a reasonable thing, yet local chamber of commerce groups, newspapers and others oppose a tax on these retail behemoths because they say it is "bad for business." Is it bad for the locally owned retailers who are getting crushed by box stores? Is it bad for the local service companies who don't get any business from big box stores? Is it bad for rural main street stores people drive by on their way to shop in the big box corridor in another community? Is it bad for the taxpayers who are subsidizing the low wages that give us low prices every day?

Big box stores are here to stay. The "big box tax" being proposed in the Legislature will exempt any big box store that pays a living wage. If Wal-Mart and other big box stores don't want to pay the tax all they have to do is pay their workers a little more. They can afford it and we should demand it.

Sen. Ken Toole, D-Helena, is vice chair of the Senate Taxation Committee.

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