Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, May 12, 2006

Free-Thinking Friday

Wal-Mart v. the B&O, King Kong v. Godzilla

The B&O tax is a blunt instrument that bludgeons low-margin retailers. It could be a perfect match for Wal-Mart. Imagine this, a 2% tax on a special category of retailers, those grossing $4 million or more per year. It could be done with the B&O. Whatever its other faults, which are many, the B&O is the most flexible of Washington's major taxes. Wal-Mart is precisely the type of business -- large, vertically integrated purveyor of out-of-state goods -- which currently benefits most from the gross receipts base of the B&O. Not in this variation!

Maryland passed a bill earlier this year requiring 8 percent of a company's payroll be spent on health care for its employees IF the company fell in the category of those employing 10,000 people or more. In Maryland, that category included Wal-Mart and ... well, Wal-Mart.

What is the problem with Wal-Mart? It comes to town, or actually to the outskirts of town, hires people at poverty wages to purvey Chinese goods. This immediately guts the business districts far better than any neutron bomb. It puts pressure on state services both from those whose living wage jobs that are lost and those whose new poverty wage job at Wal-Mart comes without benefits -- primarily health care.

People will say I'm picking on Wal-Mart. No. There are other such retailers, Target, for example. No benefits, low wage, Chinese imports. Heck, we have a clutch of them just off the border here in Tacoma in Fircrest. It would be a mistake to cut any of them off from their opportunity to pay their fair share.

The Washington Wal-Mart law would not involve a new tax, just a creative use of the existing B&O. There is a specific retail category in the B&O. A credit or deduction could be devised to target the level of the high volume model that Wal-Mart has used like a bulldozer over the retail business in the state. It might not be $4 million; it might be $10 million.

The proceeds of such a tax could be distributed to the cities nearby, with legitimate retailers allowed to deduct their city B&O's if any have had the good will to locate inside city boundaries. Or the proceeds could go into the general fund to defray the expense of dealing with a prime corporate predator. It might just seed an expansion of rational health care.

At a minimum it would be a spectacle, to watch the two juggernauts in battle.

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