Wal-Mart undercutting practises

[donnay]

Easy enough.

That is not debunked...the point was ALWAYS they should not be given a dime of tax payers money, other than the fact that the citizen is purchasing something in their stores.

 

[vodalian]

All the information I posted in my earlier post had this information there, all you had to do is look at it.

Competing with the Discount Mass Merchandisers - By Dr. Kenneth Stone, Iowa State University, 1995


The basic premise of this study and others by Ken Stone is that the retail "pie" is relatively fixed in size (it grows only incrementally as population and incomes grow). Consequently, when a company like Wal-Mart opens a giant store, it invariably captures a substantial slice of the retail pie, leaving smaller portions for existing businesses, which are then forced to downsize or close. This study of Wal-Mart's impact on Iowa towns found that the average superstore cost other merchants in the host town about $12 million a year in sales (as of 1995), while stores in smaller towns nearby also suffered substantial revenue losses. These sales losses resulted in the closure of 7,326 Iowa businesses between 1983 and 1993, including 555 grocery stores, 291 apparel stores, and 298 hardware stores. While towns that gained a Wal-Mart store initially experienced a rise in overall retail sales, after the first two or three years, retail sales began to decline. About one in four towns ending up with a lower level of retail activity than they had prior to Wal-Mart's arrival. Stone attributes this to Wal-Mart's strategy of saturating regions with multiple stores.

http://www2.econ.iastate.edu/faculty/stone/1995_IA_WM_Study.pdf

Okay, so if we do the math, in the above study, 7,326 businesses closed due to the fact that Wal-Marx's moved in, within a 10 year span and no new growth was obtained. You do not see that as an economic downside to that local economy?

________________________________________________________

http://www.newrules.org/retail/key-studies-walmart-and-bigbox-retail#6

The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine - by the Institute for Local Self-Reliance and Friends of Midcoast Maine, September 2003.

Three times as much money stays in the local economy when you buy goods and services from locally owned businesses instead of large chain stores, according to this analysis, which tracked the revenue and expenditures of eight locally owned businesses in Midcoast Maine. The survey found that the businesses, with had combined sales of $5.7 million in 2002, spent 44.6 percent of their revenue within the surrounding two counties. Another 8.7 percent was spent elsewhere in the state of Maine. The four largest components of this local spending were: wages and benefits paid to local employees; goods and services purchased from other local businesses; profits that accrued to local owners; and taxes paid to local and state government. Using a variety of sources, the analysis estimates that a national big box retailer operating in Midcoast Maine returns just 14.1 percent of its revenue to the local economy, mostly in the form of payroll. The rest leaves the state, flowing to out-of-state suppliers or back to corporate headquarters. The survey also found that the local businesses contributed more to charity than national chains.

Again, none of that mentions anything about Walmart gaining local monopolies and raising prices to screw everyone due to a lack of options That's what I'm asking you to cite an example of, because it doesn't happen.

 

[Cutlerzzz]

the subsidy didn't help them- or is that proof that it really helped them a lot against their competition which did not receive $1 billlion?

I did not say that it does not help them. For starters, much of that number includes tax breaks, which are not subsidies. It also does not factor in things the government does that hurts Walmart (protectionist policies or the 34% they pay in taxes). It also does not list a timeframe for those subsidies.

 

[Zippyjuan]

From New Orleans:
http://thelensnola.org/2011/10/20/walmart-subsidy-gentilly-woods/

It was a week before Hurricane Katrina’s sixth anniversary and the prevailing mood of the Gentilly town hall meeting was frustration.

A tired looking man asked Mayor Mitch Landrieu, the event’s host, why the city still hadn’t repaired flood-damaged roads in his neighborhood. An 80-year-old woman stood up to say a that drug dealers had set up shop in the overgrown vacant lots behind her house, she said. A day earlier, she said, gunshots killed one man and injured another on her block. Another senior citizen rose to implore the mayor to put recovery money toward projects that create jobs for young men in his community. Many begged the mayor to help bring more shops, particularly grocery stores, to the area.

When Councilwoman Cynthia Hedge-Morrell took the microphone to share the news that Walmart would soon take over a prominent strip mall moldering since Katrina, it felt like progress finally was being made. After years of staring at the blighted Chef Menteur Highway mall, owned by the New Orleans Redevelopment Authority since 2009, residents would soon have a place to shop. People cheered. The mayor clapped. And the “great thing,” Hedge-Morrell said, “is that it’s not dependent on us getting any federal grants.”

But now it appears that taxpayers will contribute as much as $2.8 million to the effort.



It’s difficult to determine how much Walmart’s development will be subsidized until the retailer and NORA settle on a sales price. Yet it is safe to say that it would be a small miracle if the city broke even on the deal.

Taxpayers have already put $6.1 million into the site, slightly more than its 2008 appraised value of $5.5 million and nearly four times its value of $1.6 million listed on the city assessor’s website. The $6.1 million reflects $4.3 million spent by NORA in 2008 to acquire the 12-acre property and another $1.8 million appropriation earmarked by NORA to buy adjacent parcels that will extend the site to Louisa Street, clean polluted soil, clear blight and move two businesses from the adjacent parcels. Both expenditures come from the $411 million pot of Disaster Community Development Block Grant money that the U.S. Department of Housing and Urban Development gave to New Orleans to aid in its Katrina recovery.

Most of that money has been set aside to repair or replace public property. Though the city has set allocated other grant monies for commercial redevelopment efforts, Walmart is the only for-profit entity to benefit so far from such an allocation. Only 11 other projects out of 92 account for more spending. See the full list here.

The Lens estimated the $2.8 million subsidy by subtracting an estimated market-value sales price of $3.3 million for the 12.8-acre site from the $6.1 million city investment.

Other retailers who have returned to New Orleans since Hurricane Katrina have not gotten the same kind of public assistance pledged to Walmart. A Winn-Dixie grocery a few blocks from the Gentilly Woods Shopping Center reopened soon after Katrina at its own expense, and it now will be competing with the subsidized Walmart. Also since Katrina, locally owned chain grocer Robert Fresh Market has opened stores in Carrollton and Lakeview using low-interest federal Gulf Opportunity Zone bonds but without direct subsidies for infrastructure or land, said Rick Fernandez, Robert’s chief operating officer.

And while other grocery stores are eligible for direct assistance through a new Fresh Food Retail Initiative intended to spur development of supermarkets in low-income neighborhoods, individual stores are limited to a maximum grant of $1 million, half of which must be a loan. With $14 million set aside for the program – $7 million coming from the city’s disaster grant fund and the other $7 million coming from a nonprofit financing partner – competition is fierce. In the Seventh Ward, Circle Food Store owner Dwayne Boudreaux is one of the applicants.

“If someone like Walmart is getting what it needs,” he said in a July interview, “I’m just praying I’ll get what I need.”

 

[Cutlerzzz]

That is not debunked...the point was ALWAYS they should not be given a dime of tax payers money, other than the fact that the citizen is purchasing something in their stores.

The point is subsidies that make up a thousanth of their revenue does not make or break the company. It also does not factor in what the government does to hurt Walmart. They pay 7.2 billion dollars in taxes every year, 6 times the 1.2 billion in subsidies, and that "1.2" billion dollars is over an unstated time frame. Is it 1.2 billion ever? Annually? None of the sources you posted say.

Your initial claim was that subsidies are what enables Walmart to drive small business's out of business.

When a company gets subsidies by the State and takes away from average Mom & Pop businesses, that is fair?

That was the context.

 

[donnay]

Walmart, a company that has over 400 billion dollars in annual income, has received 1.2 billion dollars over the years in subsidies. By subsidies, they include tax breaks and other non subsidies in order to get that 1.2 billion dollar number. This does not factor in the damage that is done to Walmart by the government (protectionist policies). They also pay 7.2 billion a year in taxes.

Wal-Marx's tax avoidance schemes:
http://walmartwatch.com/wp-content/blogs.dir/2/files/pdf/tax_avoidance_schemes.pdf
http://www.ctj.org/pdf/walmart041607.pdf
http://reclaimdemocracy.org/walmart/2007/state_tax_dodge_rent.php
http://www.jsonline.com/news/wisconsin/29455149.html
http://www.nytimes.com/2007/10/10/business/10prop.html
http://walmart.3cdn.net/3a48038135983ed4d4_gvm6ivfu3.pdf
http://www.oregonlive.com/politics/index.ssf/2009/12/walmart_others_make_money_on_o.html
http://www.tompaine.com/articles/2005/11/09/walmarts_tax_on_us.php
http://isites.harvard.edu/fs/docs/i...m_article_print_SB117027500505994065.html.pdf
http://news.change.org/stories/8-reasons-we-should-fight-to-keep-walmart-out-of-our-major-cities


If any one of us, individually tried these tax schemes we'd be rotting away in some Federal Pen like Ed and Elaine Brown!!

 

[Cutlerzzz]

Wal-Marx's tax avoidance schemes:
http://walmartwatch.com/wp-content/blogs.dir/2/files/pdf/tax_avoidance_schemes.pdf
http://www.ctj.org/pdf/walmart041607.pdf
http://reclaimdemocracy.org/walmart/2007/state_tax_dodge_rent.php
http://www.jsonline.com/news/wisconsin/29455149.html
http://www.nytimes.com/2007/10/10/business/10prop.html
http://walmart.3cdn.net/3a48038135983ed4d4_gvm6ivfu3.pdf
http://www.oregonlive.com/politics/index.ssf/2009/12/walmart_others_make_money_on_o.html
http://www.tompaine.com/articles/2005/11/09/walmarts_tax_on_us.php
http://isites.harvard.edu/fs/docs/i...m_article_print_SB117027500505994065.html.pdf
http://news.change.org/stories/8-reasons-we-should-fight-to-keep-walmart-out-of-our-major-cities


If any one of us, individually tried these tax schemes we'd be rotting away in some Federal Pen like Ed and Elaine Brown!!

http://www.forbes.com/2011/04/13/ge...iness-washington-corporate-taxes_slide_7.html

Walmart is paying over 32% of their profits in federal income taxes. Walmart pays 7.2 billion a year in federal taxes. Your sources merely show Walmart evading a few million dollars in taxes over the years every. Let's look at the big, relevant picture.

 

[Travlyr]

http://www.forbes.com/2011/04/13/ge...iness-washington-corporate-taxes_slide_7.html

Walmart is paying over 32% of their profits in federal income taxes. Walmart pays 7.2 billion a year in federal taxes. Your sources merely show Walmart evading a few million dollars in taxes over the years every. Let's look at the big, relevant picture.

Lolz... wow. Their subsidies put people out of business and out of work. Socialism = fewer choices, lower wages, poorer quality.

 

[donnay]

Again, none of that mentions anything about Walmart gaining local monopolies and raising prices to screw everyone due to a lack of options That's what I'm asking you to cite an example of, because it doesn't happen.

If in essence Wal-Marx saturates regions with their stores, all through subsidies, all the while the small businesses have no subsidies, and now they must compete with a store that can buy merchandise in quantity--buying in bulk. Wal-Marx can afford to nearly give products away, where the small business does not get the bulk rate, and therefore the small business struggles and cannot afford to give the things away, because they have overhead to meet each month.

And if you think for one minute, that if Wal-Marx was the only store around, that they won't raise their prices, you are living in denial. Wal-Marx record is less than reputable.

 

[donnay]

http://www.forbes.com/2011/04/13/ge...iness-washington-corporate-taxes_slide_7.html

Walmart is paying over 32% of their profits in federal income taxes. Walmart pays 7.2 billion a year in federal taxes. Your sources merely show Walmart evading a few million dollars in taxes over the years every. Let's look at the big, relevant picture.

You forgot to deduct the subsidies they get, or the property taxes, in more than 1000 cases (that I found I am sure there are more), they evade in each state. Just remember they have a mule team of the best of the best land sharks to get them out of a pinch, not to mention, they have the best of the best accountants finding all the loopholes, they lobbied Washington for!

Remember Hillary Rotten Clinton was on the Wal-Marx Board of Directors for six years, that in itself, speaks volumes to me!

 

[Cutlerzzz]

You forgot to deduct the subsidies they get, or the property taxes, in more than 1000 cases, they evade in each state. Just remember they have a mule team of the best of the best land sharks to get them out of a pinch, not to mention, they have the best of the best accountants finding all the loopholes, they lobbied Washington for!

Remember Hillary Rotten Clinton was on the Wal-Marx Board of Directors for six years, that in itself, speaks volumes to me!

You have nothing relevant to say it would seem. They have received a few hundred million dollars in subsidies over the last few years according to your sources, and paid tens of billions in taxes over that time frame. They make several 1000 dollars for every dollar in subsidies they receive.

I'm a voluntarist, not a statist. I don't consider tax exemptions to be "subsidies", as I believe in self ownership. They pay ten times more in Federal taxes every year than they have ever received in subsidies, according to your sources.

 

[Travlyr]

You have nothing relevant to say it would seem. They have received a few hundred million dollars in subsidies over the last few years according to your sources, and paid tens of billions in taxes over that time frame. They make several 1000 dollars for every dollar in subsidies they receive.

I'm a voluntarist, not a statist. I don't consider tax exemptions to be "subsidies", as I believe in self ownership. They pay ten times more in Federal taxes every year than they have ever received in subsidies, according to your sources.

It Walmart gets a tax exemption for which a Mom & Pop shop do not qualify, do you consider that an unfair advantage?

 

[donnay]

You have nothing relevant to say it would seem. They have received a few hundred million dollars in subsidies over the last few years according to your sources, and paid tens of billions in taxes over that time frame. They make several 1000 dollars for every dollar in subsidies they receive.

I'm a voluntarist, not a statist. I don't consider tax exemptions to be "subsidies", as I believe in self ownership. They pay ten times more in Federal taxes every year than they have ever received in subsidies, according to your sources.

You obvious haven't checked all the sources. Now it is clear to me why your not against slave labor.

 

[Cutlerzzz]

You obvious haven't checked all the sources.

Every argument you have made in this thread has been debunked. You're grasping at straws that do not exist.

Now it is clear to me why your not against slave labor

Says the statist. The slave labor claim was pretty easily debunked as well, just like everything else.


I think this is about over.

 

[donnay]

Every argument you have made in this thread has been debunked. You're grasping at straws that do not exist.

Debunked by you...I don't think so. You're simply in denial, and our country is controlled by all the mega corporations. We haven't see a truly free market in our lifetime and unless we get Dr. Paul in, we won't see one in the future either.

Says the statist.

I do not go by any labels per se, but if I were to be asked what label I prefer, I would say, "I am an Anti-Federalist"

 

[donnay]

The slave labor claim was pretty easily debunked as well, just like everything else.

What you don't realize is that sooner or later we will all be slaves on the global plantation, if we don't fight this corporate tyranny, now! But you just go right on along and stick your head in the sand--voluntarily, that is certainly your choice.

I think this is about over.

Yes, indeed it is.

 

[Feeding the Abscess]

Instead of the government further intervening into the economy to combat previous interventions that may or may not have led to Walmart's current standing, why not loosen the economy so that it is easier to competitors to arise and thrive?

 

[Eryxis]

Dear Jesus, Cuttlerzzz, I get what you're saying. TECHNICALLY, tax breaks are not subsidies, and if it were individuals who were getting these breaks, no big deal. The problem is that these are tax breaks afforded to the largest retailers, Wal-Mart, Cabellas, etc and they are in direct competition with small business who are not privy to these same tax breaks. In business, and especially retail business those few percentage points are the difference between a successful small business, and somebody throwing in the towel. Local governments expect "business" to pay for all their luxuries and then literally GIVE away land and development costs to wal mart, et al. It is absolutely absurd.

 

[donnay]

Instead of the government further intervening into the economy to combat previous interventions that may or may not have led to Walmart's current standing, why not loosen the economy so that it is easier to competitors to arise and thrive?

That's the problem, Wal-Marx and other box stores knock out smaller competition. If we had a truly free market, of which we do not have, competition would be the best for the people. And if a business had horrendous business practices, people would boycott it and either the business would try to rectify it or they would go our of business.

We need Government out, and the people in, and the economy will flourish--that's a truly free market!

 

[Txrose4ever]

So today I was discussing free market competition and while I was discussing Standard Oil, my friend brought up Wal-Mart even though he knew it was not a monopoly. He brought up the practice where Wal-Mart, due to it's large net profit, is able to maintain a barrier for new competition because they are able to undercut their prices to actually cost them more than they profit and outlast competition only to raise the price again.

I asked if he could provide evidence for that but he was unable to give an example, but it was important because I still considered the reasoning behind it. I also brought up that Wal-Mart is still forced under market forces to maintain low prices but I felt unsatisfied with this answer.

I know government intervention does not increase competition, but what are your thoughts about such practices and it's relation to the free market in providing competition?

First of all, Walmart does not have a HUGE net profit. They profit 3.6% of sales. Small percentage compared to most companies. Most companies have "loss leaders", which are items they will sell at cost, or occasionally a little under cost to attract business in the hopes the customer will buy other products. A good example of this is milk.