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Date Posted: 09:51:04 02/04/10 Thu
Author: Ted Thomas
Author Host/IP: 97-120-188-77.ptld.qwest.net / 97.120.188.77
Subject: The Impact Of Wal-Mart On Communities

The Impact of Wal*mart on Communities

Taxes

Impressed by the efficiency of the Autobaun that he encountered while directing the allied military invasion of Germany general Eisenhower assumed the office of the president of the USA in January 1953. With direction of his political backers of auto makers, oil and chemical corporations and tire companies he introduced and obtained the audacious plan to build the largest construction in human history. The Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly called the Interstate Highway System (or simply the Interstate). Through higher taxes on Gasoline, the general fund and from state general funds Eisenhower raised 130 billion dollars to construct the 46,876 miles of interstate roadway. This took place concurrently with the criminal conspiracy of Standard oil (of California), Mack, Firestone GM and others colluding to form a holding companies in order to purchase and destroy 45 municipal transit systems. Along with government underwriting of the Mortgage Banking system through Fanie Mae and Freddy Mac these subsidies drove the suburban housing boom of the 1950's.
Commercial property like shopping centers that followed the land grab in the suburbs were facing bankruptcy and appealed to the government to pass a change in 1954 to the Tax Code to allow accelerated and front loading of the depreciation allowance on commercial properties. This one move made shopping centers into incredible tax shelters. In effect allowing the owners of newly constructed shopping centers and later big box stores to declare huge losses and so defray a greater part of their tax liability than any legitimate, established store could dream of.
For example the Kratter corporation took in about 10 million dollars in gross revenue from it's commercial properties while only having expenses of 4.8 million but because of accelerated depreciation of 6.9 million they claimed a paper loss of 1.7 million dollars. Kratter's investors not only had millions in tax free income but were allowed to actually defray the profits they made from other investments. It was a Tax Racket far more lucrative than meager stock dividends.
This is why in 1953 there was only 6 million square feet of retail space constructed in the USA and in 1956 there was over 30 million square feet built. By 1973 there were over 18 thousand shopping centers that had been constructed since 1954 (almost 20 per state per year). No wonder the post war boom mad America feel like they were rich...it looked like prosperity so people assumed that they must be able to afford all the contents of those shopping centers. But the reality was that retail space was being built way out of all proportion to the actual demand for it. (Thomas W. Hatchett; US Tax Policy and the shopping center boom of the 1950's and 1960's published by the American Historical Review)
As developers built new shopping centers they took the big deductions allowed in the first 7 to 14 years then unloaded them on some na�ve johnny come lately moving on to build the new bigger mall that will put the old wounded ducks out of business. Walmart alone now holds over 300 empty and abandoned buildings.
This was not enough, developers soon came asking for more and they were going to get it. Urban renewal zones froze the tax rate paid at pre-development valuations, special economic zones also eroded the ability of local governments to collect the fair share from these corporations for the schools, roads, police, fire and water services. The Walmart site in Warrenton is inside the urban renewal zone even though it is delineated as a high value wet land requiring mitigation.
But wait there is more: Driven by the false belief in the benefits of big box retailers local elected officials nationwide have actively underwritten their proliferation. In the 1990's cities began funneling billions in development subsidies to big retailers, Walmart having trousered more than a billion dollars in local and state subsidies. And at last need I mention that many states have provisions in their tax codes to virtually avoid paying any income tax at all. You might be familiar with the egregious Corporate Minimum Tax that was the subject of the recent ballot measure in the great state of Oregon.
Of course small established independent stores receive none of these benefits and like you are obliged to pay their unfair tax burden that multiply in the face of these corporate giveaways. All the tax benefits given to these super rich lift the burden of paying for civil services from the ones who cause the demand for it and have the means to pay for it to the ones who did not cause the increased demand and do not have the means to pay for it. You are paying taxes that are making their profits. You will pay more taxes and at a greater rate and that will contribute to the dividends of the Walmart shareholders. On January 29 2010 Mayor Gill Grahmson asked the Honorable State Senator Betsi Johnson to overturn legislation in order to allow the city to set a higher tax rate. This comes after they have just hidden a 3% increase in Warrentonian's water rates. I know because I was at those meetings.
Almost none of the new mega retail centers would be possible without the massive tax breaks and subsidies given to them. Imagine the implications for the tax structure today if all of these costs were removed and retailers developed "organically" in accordance to the fair taxation rate that everyone else is compelled to pay.

The Economic Impacts

Based upon the proposed size and the track record developed in other states the entry of Walmart into the county will probably precipitate the following economic outcomes:
Employment

In the few years that Walmart was expanding the fastest in the state of Iowa the state lost 555 grocery stores, 298 hardware stores, 293 building supply stores, 161 variety shops, 158 women's clothing stores, and 116 pharmacies. Studies show that for the anticipated 300 Walmart "jobs" 450 people currently employed in retail and other occupations will eventually loose their jobs due to business closures, bankruptcy and layoff due to 'downsizing'. Many more who will be able to keep their businesses and jobs will only do so at substantial loses in income and pay cuts due to the market capture by Walmart of between 40-80%. Independent stores will be forced to cut wages and benefits, reduce service and selection and move their locations. Many of those who don't make it will suffer personal bankruptcy, foreclosure and family dissolution.
Of the 300 anticipated "associates," employed by the proposed Walmart fully one hundred will not be full time (defined by Walmart as only 28 hours a week) these people will not be eligible to purchase Walmart's insurance. Fully another one hundred will not be able to afford it. When they or a member of their family becomes sick or is injured they will wind up at the emergency room with acute symptoms and without the ability to pay for treatment. Waiting or more accurately being compelled to wait until your symptoms become acute greatly multiplies the cost of treatment. The cost of providing care to them will be passed on to others as the rates charged for treatment of those that can pay will be increased to bear the costs.
Walmart has directed its underpaid employees to apply for social welfare systems such as they are. Many will qualify for food stamps and frequent the food banks. Most of them will not be able to afford to rent let alone buy a house and many will qualify for scant and mismanaged Section 8 housing assistance. All of these demands upon the Federal, State, County and local systems will raise the tax burden on the diminished taxed base. You will pay for the Sheriff to evict the victims of their predatory practices, not them. And of course those driven to despair out of want are more likely to self medicate themselves through drug abuse and alcohol and tend towards riot and violence in their lives. Again this is recognizable as taxes going to subsidize their dividends.

The Social Impacts

The supporters of the proposal frequently express their subscription to the idea that the benefits of a Walmart will outweigh the costs to the community. That somehow the perception alone of low prices will draw more people to our area and so recapture consumer's spending that is otherwise lost to Longview or Portland. This idea suffers only one structural flaw: that is that it has never been the case precedented any where else and as such would be the first incident on record. In every study of the actual effects of a Walmart being constructed on county wide poverty demonstrates an increase in the rates of poverty and of children raised in poverty. In the in depth University of Pennsylvania study researchers concluded that counties with Walmart store have grown poorer than surrounding counties and that the more Walmarts they had, the faster they grew poor. ( "Wal-Mart and county poverty," AERS Staff Paper no. 371 October 2004).
Capitalized from far away and managed exclusively for the benefit of shareholders Walmart donates substantially less to charities and community organizations per dollar of income. They will care little for the local quality of life and not even avail themselves of the facts of our suffering let alone do anything to mitigate it. Unlike the locally owned and independent businesses that buy and bank locally they will make sure that every night the receipts are wired to Bentonville.

The Environmental Impacts

The location of the proposed Walmart is on a piece of high value wet land. As the proposed 'acquisition in lieu of Mitigation' will amount to a net loss of wet lands the impact on the environment will be negative. Wet lands perform valuable essential functions or services like flood water storage and water purification. Large scale parking lots and warehouse roofing are impermeable surfaces and have no value as wet lands. Without tree cover sunlight penetrates and warms the water promoting algal growth and thermal stress that will adversely effect dissolved oxygen content far downstream making the waterways a hostile environment for juvenile fish and other aquatic life. Fertilizers, pesticides, herbicides and chemical run off from storage and other activities have been serious problems at other Walmart stores in the past and can easily be a problem here too. The replacement of this wetland with a Walmart will increase flooding and diminish water quality.
In our intact spruce wetland there are hundreds of species of vegetation, birds, mammals, and amphibians such as the 'at risk' Red Legged Frog. Many of them are indicator species of the overall health of the wetland ecosystem. By building upon great blocks of wetlands they loose their connectivity necessary for the health of many species. The breaking up of many wildlife corridors into dead ends will adversely impact many creatures such as the Elk and the Deer who will find their traditional migratory routs blocked.

The Impact upon Traffic

Studies show that a Walmart of the proposed scale can be expected to incur an additional 7500 car trips a day. This will impact the air quality and contribute to oily waste run off. Many of the targeted customer base will be coming from across the Megler bridge and Astoria to the bottle neck at the Young's Bay bridge. compounding congestion greatly. We have learned recently that the road development near the new Costco has been engineered specifically to fulfill the role as the terminus of by pass from high way 30 at John Day somehow over the Youngs River to Costco's front door in the North Coast Business Park. This was paid for largely without public awareness or consent. The Warrenton City Council has further publicly appealed for state financing for the bypass and went so far as to say that they are willing to construct the bypass on their own one piece at a time if necessary. Such a bypass will frankly turn Astoria into a ghost town. This is just the beginning of the cost our community is being stuck with to bear in order to make big box share holders richer.

Ted Thomas

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Replies:

Re: The Impact Of Wal-Mart On Communities -- Elanore Pitkinin, 19:02:33 02/04/10 Thu (75-139-208-150.dhcp.knwk.wa.charter.com/75.139.208.150)