Wal-Mart Says Subsidies Worth The Investment

Discussion
May 25, 2004
George Anderson

By George Anderson


A report by the nonprofit group, Good Jobs First of Washington, showing Wal-Mart received roughly $1 billion in taxpayer subsidies over the past 10 years to open stores and distribution centers helps point out just how wise an investment those subsidies turned out to be, says the retailer.


Gus Whitcomb, a Wal-Mart spokesperson, told the Newark (NJ) Star-Ledger, the retailer has collected $52 billion in sales tax and paid $4 billion in property taxes over the same period. He also pointed out that employees of the company paid $192 million in income and unemployment taxes over those same 10 years.


“Do the math, and you will see that every dollar invested returned more than 30 (dollars),” he said.


The mayor of Audobon, NJ, Anthony Pugliese, agrees with Wal-Mart. The town located in the southern part of the state in Camden County, along the Delaware River across from Philadelphia, was able to get the Delaware River Port Authority to make $1.2 million in road improvements to bring Wal-Mart. The retailer occupied the site of an abandoned shopping center.


“You hear the bad stories about Wal-Mart coming in, but this is a good story,” Mayor Pugliese said. “This place has been desolate for 10 years.”


Not all agree, however, with the mayor and Wal-Mart.


Greg LeRoy, executive director of Good Jobs First, believes companies such as Wal-Mart would be building stores and distribution centers in the same areas even without subsidies.


“That a company with $9 billion in profits can wrest job subsidies from state and local governments shows that the candy store game has gotten out of control,” he said.


Moderator’s Comment: What are your thoughts on Wal-Mart’s success in receiving taxpayer subsidies to open stores and
distribution centers? Should government be offering tax breaks and other types of subsidies to attract retailers for this purpose?


Wal-Mart is not the only retailer to seek assistance from government in terms of road improvements or other incentives to open a store, for example, in
an economically blighted area. The retailer is simply making the most of what is available to it and others.


Whether taxpayer funds should be used for this purpose is another story.


We see the legitimate need for it in areas abandoned by retailers in cities such as Newark, Chicago, etc. On the other hand, there are numerous instances
where a retailer is going to set up shop in an area with or without subsidies because it makes sense for business growth. Determining the difference between the two is the job
of government officials in areas being scouted for expansion.

George Anderson – Moderator

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