Montana to levy tax on Wal-Mart? (Welfare Tax offset low wages)

[RamboLiberal]

http://money.cnn.com/2005/02/16/news/fortune500/walmart_tax.reut/index.htm?cnn=yes

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, Target and Costco 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.

I hope every state does this!

[cthrumatrix]

1. what a great idea.... no 3rd world labor for any US company

[VegasWolf]

77. Unfortunately, Montana is now part of the Axis of EVIL. n/t

[davidinalameda]

2. wonder how much money Wal-Mart spreads around to defeat this

but it's a great idea

[1monster]

33. It's still chicken feed amounts to Walmart and the like. Two percent of

$40,000,000 is only $800,000. They pay much more than that for their corporate lawyers and it is probably less than a quarter of what they pay the upper echelon executives.

[Solon]

38. Doesn't matter, its the precedent that matters to Wal-Mart...

They would happily spend 10,000,000 dollars to defeat this issue, just so it is killed in its infancy before other states get the idea, but instead of 2%, increase to 5% or more. That's how Wal-Mart works, they don't care about how much it costs, if something is a threat, they will eliminate it. Just like the Store in Quebec, how much money are they going to lose if they close it, a lot I would say, but to them, it is a threat, because they would have conceded to a UNION. They never would have stood for that, it would set a precedent, and they would have had to deal with more and more stores unionizing than they would otherwise.

[1monster]

42. Oh, I agree. I'm just saying that it isn't their fair share.

And I know that Walmart will fight this to the death... I wonder, if it passes and all attempts to overturn it, if Walmart will pull out of Montana? :D

[Solon]

43. Don't smile too much...

They would pull out of Arkansas if that state actually developed balls and passed something similar to this. Though, if implemented nationwide, maybe we could actually affect Wal-Mart's bottom line?

[Hard_Work]

48. chickenfeed, yeah

but how many States have only one Wal-Mart? If a state has 10 Wal-Marts doing 40mil a year, that 800k becomes 8mil. That is a decent piece of change to any state budget.

[prodigal_green]

3. excellent!

and I hope they continue on to boost healthcare and food assistance aid to families with that money.

[Johnyawl]

4. Why are they targeting Costco?

Costco pays some of the highest wages in the retail industry, and they provide excellent benefits to their employees.

[Tempest]

15. The bill can't discriminate

I doubt it would pass judicial review if there were exemptions to certain companies.

[Mairead]

25. They could/should factor in median wage

The problem is a function of median wage paid, not income received. If they did that, it might let CostCo off the hook.

[Tempest]

29. I have my doubts

What you're describing is a form of class warfare.

I doubt the courts would look favorably on that.


If there is a solution which would pass judicial review, and I hope there is, someone will find it.

[w4rma]

75. "Class warfare" is definitely *not* against the Constitution.

Just look at every single law that the Republicans pass.

[mulethree]

62. applies if too many part-timers and underpaid full-timers ($22K/yr)

"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. "

Edit - I read on the thread that they've amended it to 'part time employees make up more than half' from 'a quarter'

[progressivebydesign]

74. But miminum wage jobs are legal....

Why not target restaurants, and small bizes that pay the same way? Just wondering... I hate the big box stores as much as the next guy... but unfortunately this is life in the new America. Where we can all work for peanuts selling the crap from China, that is creating the Chinese middle class.

[Toots]

68. It is already discriminating

It is discriminating by sales volume instead of employee wages which supposedly it is all about. It should be against any company that pays less than ...say two dollars above minimum wage. Maybe a different figure but the same idea. Just taxing them for success is BS.

[Flint-oid]

44. Costco was exempted

See here.

The bills author said:
"I'm not interested in getting Costco," Toole said. "They're probably the best of these guys."

I think the issue is full-time v. part-time workers.
Costco may pay it's full-time workers well, but what about the part-timers, and what portion of the work force do they represent?

[SoCalDem]

63. Costco is union..(at least ours is)

They pay well, provide great benefits too:)

[meganmonkey]

5. Good!

Wonder if the bill has bipartisan support. Probably not. But if this passes, it would set quite a precedent.

[dbackjon]

6. Problem is that it is based solely on sales

Not average or % of workers below certain level.

Costco pays very well - to lump them with WalMart is a travesty. I doubt there are many if any Costco workers on Welfare.

[trogdor]

7. Well, maybe that will get addressed...

...when the bill goes to the floor for debate. Seems to me that volume alone shouldn't be enough reason to be punished like that.

[RamboLiberal]

True - Montana residents need to lobby them to do on wages

So a good company like Costco doesn't get punished. If I was Costco I'd get the word out to my employees.

I think we all ought to suggest this tax to our state legislators but emphasize it should be based on wages paid.

Hah - I'm glad it's Montana trying to pass this - imagine the RWingnut pundits if it was California!

[gbwarming]

51. No, it's also based on % of part times and starting compensation

This is a great idea imo. CNN cut out this info on the wage and benerfit exemption from the Reuters story.... HMMM.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh10884_2005-02-15_23-50-41_n1599827_newsml
Toole's bill would exempt any big box stores whose employees receive an entry level compensation package of at least $22,000 annually, counting wages, insurance, sick time and vacation, with less than half of its workers being part time. Temporary or seasonal workers are exempt.

NPR morning edition ran a pretty good story on this last week
http://www.npr.org/templates/story/story.php?storyId=4490254

[Straight Shooter]

8. Heh. I love it.

I don't even shop at W-Mart because of their egregious policies, and yet they're still picking my pocket. Corporate welfare must end. Let them take "personal responsibility" for their employees and pay them a decent working wage.

Wal-Mart knows how to work the system, and the bush administration helps them, including that little deal just recently where they're allowed to "investigate themselves." Sorry, I don't have the link.

Edit: I'm glad they included Costco. They know Costco isn't guilty of stiffing their employees, and now more people will find out how fair Costco is. More people will shop there, too, hopefully, because Costco isn't shifting their burden to the taxpayers the same way W-Mart does.

[Ediacara]

9. I like the idea

But I think it should be based on percentages of employees on public assistance, rather than overall sales. This would be fairer in hitting the problematic stores, which are mostly WalMart, while demonstrating that fair labor practices like those employeed by Costco are a-ok.

[RDANGELO]

10. It would seem to make more sense

to just pass a bill making the large retailers pay more in wages and benefits. The argument against this for most large US businesses, would be that it would hurt them with overseas competition. With retailers that is not the case.

[Tansy_Gold]

40. It would make more sense to raise the state minimum wage

based on store sales volume.

Companies like Costco that already pay a reasonable wage would not be affected. Skinflints like Wal-Mart would.

[VegasWolf]

11. Gee, what a shame, no more WalMarts in Montana. n/t

[Ediacara]

12. Ya seriously.....

ON EDIT: They'd actually spend billions of dollars urging county commissions to secede from the state, rather than pay this tax or *gasp* pay their workers more...

[nadinbrzezinski]

13. They fought health insurance in Cali

wanna bet they will fight this one?

[Tempest]

16. Walmart alone will spend tens of millions to fight it

They're notorious for throwing money at any attempts to regulate them.

They may even go as far as to close stores, as they did in Canada after a store attempted to unionize.

[Jeff in Cincinnati]

21. Good!

I think there's a simple litmus test. If any employer pays a fulltime wage so low that their employees qualify for public assistance, the employer should be taxed to take up at least 50% of the difference.

[Sivafae]

28. No! the employer should pay more than 100%

why let the state take up the slack? That's not pure capitalism. I believe in pure capitalism, which means no subsudies from any govn't entity.

[Tempest]

30. Walmart is the U.S.' largest welfare recipient

They receive hundreds of millions, maybe in the billions, of concessions from states every year.

In my town, Walmart talked the city into paying for road improvements around their stores and got out of paying local taxes for the first two years of operation.

Other businesses complained because they had to pay for the improvements and taxes, but the city told them to go pound sand.

Now the city has to cut the police force because of budget shortfalls. The road improvements alone cost the city over $100,000.

[Jeff in Cincinnati]

46. You've convinced me...

[Upfront]

14. Great idea!

This dog will hunt.

[Jack The Tab]

17. but ..but...that's a red state...new TAXES? good lord...

what is the world coming to?

[juajen]

41. Isn't their new governor a dem?

N/T

[Ediacara]

60. Yes

And have one Dem Senator (although watch out for the DINO banshees coming in to diss Baucus), our state House is Dem, as is the Senate, and most state-wide offices are Dem too.

[geniph]

55. Montana's not as red as the Republicans would like

There are decided pockets of blue in Montana, and Democratic strongholds even in the red counties. Montana CAN become blue in 2006/2008.

[saigon68]

18. Just raise the minimum wage

[Ediacara]

24. Not possible in Montana

Although it would be nice..... In most of Montana, the minimum wage is actually a-ok. Rents in NICE homes can be just a few hundred/month, and apartments are even cheaper. The trouble is when you get to places like Bozeman or Missoula, where the cost of living skyrockets to oh.... the west coast. Even implimenting a city-wide or county wide living wage would be troublesome because businesses think they own the town, and would rather burn down their stores and collect insurance instead of paying their employees more.

[saigon68]

34. Maybe then only to employers that have say more than 100 workers.

[Solon]

36. Wal-Mart would burn the store with the employees in it....

just so they can collect on the life insurance they have on them as well, if they could get away with it.

[geniph]

56. Don't give them any ideas!

eom

[CitySky]

67. how about a formula

that takes into account the median housing cost (or cost of living, or some measurable index) for each geographical area?

then the "tax" can be based on a % of the difference between a worker's yearly wages+benefits and the area's cost of living. WM would be taxed more for the Bozeman stores, less for stores in rural areas, and CostCo wouldn't be taxed at all, b/c it pays a living wage everwhere.

[jgardner]

27. $15/hour

Any raise less then $15/hour isn't going to help much. With whats-his-name in the WH, we definitely won't see even the smallest change.

[cascadiance]

19. Maybe have a "two tier" minimum wage

Calculate how much of a minimum wage is needed for an 80 hour work week that mostly will guarantee that that worker isn't on public assistance of any kind (welfare, health insurance, etc.). Say that that wage level is the "second tier" minimum wage. Also, don't have a way for them to escape by paying an annual salary instead. Find the annual salary as well that separates those that are on public assistance from those that are. Then you tell businesses (perhaps just large businesses, but maybe even smaller ones as well), that they can pay lower than this "second tier" minimum wage, but they pay an added tax for the number of workers they have at this level. That way, if a company like Costco pays all of their workers above this second tier level, they don't have to pay any extra tax. And even companies smaller than Costco and Walmart will have to either pay decent wages or pay higher taxes.

[geniph]

57. 80 hour work week?

Owie. I hope that was a typo.

[cascadiance]

59. Woops... Yeah! Should be 40! :)

[SoCalDem]

64. How about just sending the "bill" for all assistance to any employer

whether it's Walmart or anyone.. If a person is working a certain number of hours and/or is willing to work more hours, and STILL is not making enough to live on, their emplyer is taking advantage of them..

Of course there would have to be some qualifiers.. a woman with 5 kids (her choice) should not be able to force her employer to pay her more because she has more kids, .. in cases like that,m the state should have a mechanism in place to either train her for higher paid work, or provide services to her that can bridge the gap as long as she is working a minimum of hours..

[Freddie Stubbs]

20. But will the money actually go to welfare?

Or will it be put into the general fund to be spent on whatever the politicians want?

[jmowreader]

22. $20 million a year is a very low plan

It's an average of $385,000 per week.

Let's play around with this, and we'll use a $26 million annual sales plan--an average of $500,000 per week. Montana isn't very large population-wise, but the Missoula and Helena areas are large enough to justify a $500,000 weekly plan.

A one-percent poor tax on a store with $26 million in annual sales is a little over a quarter-million dollars. It's not going to reimburse the state for the total cost of the store's public assistance burden, but it's a start.

On the other side of the coin, Wal-Mart will fight you for a nickel discount on a $500 product, so figure the odds on their just meekly accepting a one-percent tax on their way of doing business.

[Redstone]

23. They'll need to work on the details to make it legal

but what a great idea in general. I like it.

Now, if Americans in general would stop being so fucking cheap and always buying substandard crap just to save a few bucks, we might get somewhere because of that as well.

Redstone

[FreakinDJ]

26. Glad to see some finaly fiqured it out

I have been advocating this for some time

Walmart is such a ripoff it is a NET LOSS for the communities they rape and pillage

Next they can make it illegal for corporations to offer opening store managers a $1 per sq. ft. bonus for every sq.ft. of Mom and Pop General Store, Pharmacy and Clothier they shut down.

Think I'm kidding

I've seen the letters they send all the store owners advising them to sell out now 6 months before they even open the store

[bvar22]

31. No Wal-Mart!

MONEY SPENT AT WAL-MART KILLS
GOD'S UNBORN CHILDREN!!!

Wal-Mart supports
COMMUNIST DICTATORS!!!

I’m absolutely PRO-CHOICE, but think the Fundies need to face this hypocrisy.

Will the Republicans stand on Moral Values when their pocket change is threatened?

[Solon]

35. I'm Pro Choice and I don't support China's policy either...

they FORCE women to have abortions, where is the choice in that?

[DU GrovelBot]

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[Stinky The Clown]

37. This is great. They should also establish a tax to offset

the slave wages they pay to the poor folks in China who produce their crap. Make these fucking stores (I'm talking to *your* sorry ass, WalMart muthafuckers) competitive with the old fashioned Mom and Pops (who I **choose** to frequent to the greatest extent possible).

[sarahlee]

39. Thought that Costco..

...paid pretty decent wages???

Costco is different... and that really POs Wall Street.

The nationwide retailer treats its 100,000 clerks, forklift operators, and other workers as valued assets to be invested in and nurtured ? unlike the Wal-Mart model of paying the least you can to rank and file employees, squeezing the last ounce of toil out of each of them, busting any whisper of unionization, and causing a workforce turnover like employees are nothing but disposable coffee cups.

How different is Costco? Starting pay is $10 an hour, workers typically earn $40,000 a year after three years on the job, the company covers 92 percent of employees' health care costs, and the Teamsters union provides strong bargaining representation for the workers. Also, while CEOs at other major corporations average 531 times the pay of their lowest-paid employees, Costco's top boss takes only 10 times the pay of his typical rank and filer. His annual salary is $350,000 ? compared to some $5 million a year hauled off by Wal-Mart's honcho.

More at http://www.minutemanmedia.org/HIGHTOWER%20011905.htm

[flygal]

45. Why can't they just raise mimum wage?

I wish corporations would be responsible and treat their workers better, but when they don't we as a society need to speak up - raise the minimum wage!

[stevedeshazer]

47. It can't be done without lowering the MAXIMUM wage

It won't happen, just because of that.

[CitySky]

71. that's why we gotta organize

and take over.

power will not willingly yield its place.

[CitySky]

72. that's why we gotta organize

and take over.

power will not willingly yield its place.

[idlisambar]

49. Way to go Montana! n/t

[notadmblnd]

50. you think they'll pack up and run out of Montana

like they are doing with Canada? Let's hope so.

[Debi]

52. That'll just bring back the smaller stores

that contibute directly to the town's economy....not a bad deal!

[fishwax]

53. that's an idea worth considering

it'll be interesting to see what comes of this bill. I doubt it will pass, but it's nice seeing potential solutions discussed.

[DuaneBidoux]

54. From Montana!! From Montana!! Unbelievable

I open DU for the first time in weeks and see little signs of hope all over the place that even a lot of red staters aren't going to necessarily walk blindly off the cliff of their beloved leader and his agenda. I do hope however they don't treat all Big Box stores the same--Costco is not in Walmart's league, and they need to tax based on what the company actually costs the tax payers, otherwise you penalize stores like Costco for paying reasonble wages with benefits.

[The Magistrate]

58. This Is An Excellent Idea, Mr. Liberal

The state Representative who thought of it has put his finger to the nub. Most of what is denounced as "welfare" on the right, as if it subsifized lay-abouts, is actually a subsidy to business owners, large and small, whi are enabled by these public programs to pay less in wages, and so derive a better profit for themselves. If they had to pay the real value of their employees' labor, or even what the real costs of their employees' reasonable subsistence were, they would have to accept a great deal less for themselves, or even go out of business altogether.

"The laboring class is of necessity the most numerous in society, and it is nonsense to argue that what benefits the greatest part is injurious to the whole."

[CitySky]

69. dupe n/t

[CitySky]

70. Excellent - Frame our Values This Way

You make an excellent point. A corporation, designed to provide maximum profits to shareholders, will want its unskilled workers to make just enough to eat, sleep, and come back to work the next day.

So when CORPORATIONS lobby, they are pushing to make sure they don't have to provide anything more than that. If corporations like WM were to get their way, then we would be left choices like the following:

(a) taxpayers subsidize the health care of WM employees who end up in the county hospital ER b/c of inadequate health insurance; taxpayers subsidize housing for WM employees who cannot afford housing in their area; taxpayers subsidize WIC for the children of WM employees who don't make quite enough for themselves and their children to eat (that's the system we have now)
- OR -
(b) we get used to seeing poor people dying in the streets (the "system" in many third world countries.)

Neither one really represents MY values. I think corporations should pay a decent living wage, and if they refuse, then a tax on their burden is a great idea.

[ignatius 2]

61. Montana? Wow, that is flippin' sweet.

[GOPBasher]

65. That is SUCH an AWESOME idea!!!

THAT is the kind of thing we should be shouting about. WE should be the ones who are seen as being on the side of the taxpayers. We should say, "If you employ people and they don't make enough to get off welfare, we'll tax YOU to get the money." See how the Repubs would answer that one.

[LinuxInsurgent]

66. NOW THERE'S A LEGISLATURE!

Goddamn this is the best pro-worker legislation I've heard about in a long time.

[progressivebydesign]

73. Costco PAYS FAIRLY! That's BS to lump them in! But the tax is wrong..

They DON'T stock the shelves with crap all from China. They actually treat their workers fairly.

I have mixed feelings about this proposal. The truth is, that if they pay minimum wage.. then what they are doing is legal. Better that they spend their damn time raising minimum wage, or electing a president that supports it. A mom and pop store usually pays no more to their clerks than a big-box store would, and usually don't offer health care, either.

If this is a stand to protest the overtaking of the small businesses by the big boxes, then that's a fine position to take. BUT.. the amount of employees displaced by the little guys going out of business is more than made up for the amount of hiring for the big boxes. So.. the tax is really stupid if it's supposed to be more than a way to drive them out of business.

personally.. I HATE big box stores! I like Costco, not just cuz they're Democrats, but because they carry decent things and treat their employees fairly. I hate the big box stores because they are aesthetically offensive, sterile, ugly, they carry ALL the same shit as the same store hundreds of miles away, they have no windows or style.. because it's cheaper to do a concrete tilt-up building, and they drain our unique archectural style from America. I avoid them at all costs.

[w4rma]

76. Small buisnesses need to be protected at all costs.

Don't let Walmart hide behind Costco on this.

I support *any* bill that gives small buisnesses a better chance to compete against big buisnesses.