Rep. Pocan: Two Bills to Limit Wal-Mar & Other Box Box Stores' Corporate Welfare Eyed by Pocan

Monday, November 14, 2005

For More Information, Contact:
Rep. Mark Pocan, 608/266-8570

Legislation would save taxpayers millions of dollars

Madison – State Representative Mark Pocan (D-Madison) announced today he will introduce two bills that would limit corporate giant Wal-Mart and other big box stores’ ability to feed off the government dole.

One bill would cap the amount of sales tax collected that a business can retain from the current unlimited retention of one-half of one percent per filing to a maximum of $1,000 per filing, a move that will save taxpayers approximately $5.7 million annually. The second bill would prohibit state agencies like the Department of Commerce from providing grants to local governments for the purpose of luring large retail companies like Wal-Mart to their community.

“For decades, big box stores like Wal-Mart have bamboozled government into a corporate scam that drains taxpayer dollars to support their bottom line, while they provide low paying jobs and destroy local economies,” said Pocan. “It's time to end corporate welfare as we know it in Wisconsin.”

Pocan noted that his first bill is in response to a measure that was in the state budget, but later removed by Republicans in the State Senate. The budget provision, which would have limited the amount a business retains of sales tax collected, was based on Wal-Mart's bragging that they collect $160 million annually in Wisconsin in sales tax. They are legally able to retain one-half of one percent, or approximately $800,000 annually based on their sales under current law. Pocan said many small businesses like his own retain about $10 per filing, often adding up to $120 annually. The process takes about four-minutes per filing to complete online with the Department of Revenue.

“Small businesses in Wisconsin have been collecting sales tax money for the state for decades, retaining a small amount for their trouble. But state statutes regulating this were written long before big box stores like Wal-Mart were created. No one ever conceived that a retailer like Wal-Mart would bilk the public out of hundreds of thousands of dollars every year for doing a basic public service,” said Pocan.

The second bill would ban state agencies like the Department of Commerce from providing subsidies to big box retailers looking to do business in Wisconsin. Currently, local communities get into bidding wars to lure stores like Wal-Mart, giving up tax revenues and providing infrastructure costs like building sewer and water for stores locating in their communities. The only winners in these wars are the big box stores.

“Wal-Mart is a mega retailer with two percent of the gross domestic product in sales annually in the United States. We do not need to be subsidizing the wealthiest corporations to profit from consumers in Wisconsin,” Pocan said.

Big box stores - most notably characterized by Wal-Mart - are famous for moving into communities, getting tax breaks and subsidies to locate there, creating low-paying jobs with poor or no health care, and often force local small businesses to close, according to Pocan.

The announcement comes at the beginning of Wal-Mart Watch's Higher Expectations week. There will be a panel discussion on Wal-Mart on Wednesday, November 16 at 10:00 a.m. in room 225NW of the State Capitol. Pocan will participate in that panel.