Friday, September 17, 2010

Multi-billion-dollar company needs your tax money

Admittedly, I was aghast when I read in The Rolla Daily News Tuesday that the Rolla city fathers desperately want to pay as much as $1.5 million to Kohl’s, a national retail chain, to build a department store here.

Knowing the city fathers collect their money from taxpayers, my first thought was, “They’re collecting way too much of our money. They’ve got so much cash they’re trying to waste $1.5 million on purpose. Maybe they ought to quit accepting so much annual payment in lieu of taxes from RMU; that way, they won’t have money to waste, my utility rates will diminish and that damnable ‘service availability’ charge can be removed from my light bill. If the city government and RMU would let the taxpayers keep more money, we would spend it in Rolla stores and help develop this economy.”

Yes, this planned transfer of money from hard-working taxpayers to Kohl’s, which ranks 135th on the Fortune 500 list of top American companies, offended me. After all, Kohl’s had revenues of $17.178 billion (that’s BILLION) last year. Why should the taxpayers in little ol’ Rolla help a huge company like that excavate the land, build a building, put up light poles, lay down a parking lot and paint stripes?

Even though the projected development cost is a huge sum, $8.5 million, that is a drop in the bucket compared to the $991 million the company profited last year.That transfer of funds seemed to me to be an example of the “redistribution of wealth” that we’ve been hearing about since President Obama took office. I’ve heard the president wants to tax the heck out of rich people to pay for health insurance for poor people; some people say that’s called socialism. The Rolla City Council wants to give local taxes to a rich corporation, so that must be a case of reverse socialism. Or so it seemed to me.

It’s a lot different from 20 or so years ago when municipalities were willing to help pay for land development to bring in factories and put people to work in manufacturing jobs. Now we’re willing to pay hundreds of thousands, over a million, to bring in a place to buy clothes and shoes, even though we already have stores offering those goods.

I don’t know what in the sam hill has happened to American capitalism. Do you? Is the economy so fragile that companies can’t risk a little bit of their money to expand? Or maybe they’ve discovered municipalities are so desperate for development they’re willing to give away the treasury just to get a little bit of economic activity.

These are the thoughts that were going through my head as I was reading the story in Tuesday’s paper. Then, I read a little further, talked to some folks and thought about this situation and it makes sense.The city will pay this $1.5 million to Kohl’s based on the amount of sales tax the store generates. I don’t know what percentage of that amount will be turned over by the city, but Kohl’s has given the city 23 years to come up with the money. That’s very generous, don’t you think?

It’s likely, it seems to me, that some of the sales tax Kohl’s generates will be at the expense of other similar stores, but I suppose the city dads have thought of that.

The key point to remember is this payment of $1.5 million to Kohl’s will come from the store’s sales tax. Only shoppers will pay it. If you don’t shop at Kohl’s, you won’t pay it. I’m off that tax hook. I can’t stand the thought of paying a multi-billion-dollar corporation to come to Rolla, so I likely won’t spend any money there, at least until the $1.5 million is paid by others.

I’m willing to wait 23 years.

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