Sprawlmart

[SuzySunshine]

Sally, I agree with you as well. I'm sure that once we can afford it I won't be shopping at a Wal-Mart as much either, I prefer Target.

[Rapunzel]

Angie, I definitely see how anti-capitalism Massachusetts is. The only businesses I've seen thrive out here are real estate (big duh) and the tech industry. Now that we have personal experience in starting up a tech company I know why they don't do as poorly here: You incorporate in another state. Massachusetts (Taxechusetts) is just a bad place to start a "normal" business. And, what is UP with the "You have to be a union member" mentality in order to be able to WORK?! That's insane. And, it keeps a lot of people out of trade work while keeping the prices for that trade work (like plumbing, electricity, etc) through the roof. I have a friend who's dad owns a construction company out here (mostly remodeling in Back Bay) and he was telling me that you can't get an electrician to come out for a job for less than about $500. Why? They're in high demand because there are so few (keep their numbers low by restricting union membership severly) and because of that they get whatever they ask for. In spite of his figure we were able to get an electrician to come out and run a SINGLE line about twenty feet from our breaker box to our washer/dryer in our basement (nothing complicated - took him about half an hour). We paid him $400. And, that was the neighborhood quoted by all the other electricians I spoke with.

Anyway, I got off on a tangent. My point is that Massachusetts is NOT friendly to start-up businesses and you pretty much already have to be an established, large chain in order to thrive here. Perhaps one day all of the socialist democrats around here will get a clue and make the necessary changes to be more business friendly but I doubt it....

Jennifer

[Sheherezade]

I think the problems with small businesses extend to other states as well. Small business owners here in Ohio are having a lot of issues. In our little town, so many are going under. In Brookline, the turnover in small businesses was impressive as well. I agree that the economy there doesn't work for a small operation. I don't think it works here either - at least for a bricks and mortar start up. Internet ops (new) seem to be doing well; although, this year the IRS has stated it is going to "crack down" on all these internet home businesses that are more "hobbies" than business. I don't know how anyone will get anything off the ground without a little help. The taxation on self-employed people is so high, it hardly seems worth the effort to try out a modern "cottage industry". Particularly in the IRS is *targeting* you. I think that climate favors big business -- with lots of lawyers, accountants and big payrolls.

Insurance/liability (nationally) is also a big expense for businesses. I was blown away by the worker's comp insurance stories I was hearing from people here. One injury - and accident - and the small business had to pay the worker's salary for one year, plus his salary (one year) at his second job. As a result, the insurance company may drop the business' policy and nobody will pick them up. That could be the end of a business. One injury. The same sentiment was echoed by a restaurant/catering guy I met. Worker's comp is SCARY to them. Again, a Walmart type business is set up to handle worker's comp/liability issues that would put the little guys under.

[Rapunzel]

Yeah... it all boils down to simplifying the tax code and NOT penalizing small businesses for just existing. Current taxes (federal and many state codes as well) are just brutal to anyone who wants to actually move up economically (via a business but also if you just happen to make the jump up to the next tax bracket).

How much would the Wal-Mart employees' take home pay be if they didn't have to pay so much in taxes (ie income tax, social security, etc)? I remember working minimum wage and getting the cold, hard shock that working overtime didn't really help me as a huge portion of it was eaten away by taxes. Increases to the minimum wage aren't going to really change anything as long as we have the current tax system in place. Yes, I'm stumping for a flat-tax once again.

We've also got to do something about this sue-happy environment. I'm all for requiring the losing party paying the costs of the winning party's defense (as England has). I think that would deter many of the frivolous claims. And, it would also help with the current insurance industry standard of just settling because it's cheaper than court costs. Of course, I doubt the trial lawyers' lobbies look to fondly on cutting that particular meal-ticket of theirs. But, it would cut insurance costs waaaay down.

Jennifer

This is sort of related....I heard on NPR a few days ago an interview with John Bogle, founder of Vanguard, about his new book, Fighting for the Soul of Capitalism. I really wish I could have heard all of it. What I did catch in the first few minutes was his concern with capitalism ownership going from the individual to the institution/corporation, specifically with stock ownership. It think his observation has implications beyond just the markets.

I'd love to read it or skim but...

[Sheherezade]

What...you don't think that would go over well as the next book club selection? Now I'm going to have to check that one out form the library too and put it next to my bed. If only I could acquire information via osmosis....I've got a HUGE stack of books next to the bed.

I agree about both the tax code and liability issues. It's hard enough to be an average joe around here....without the complexities of small business as well. I think part of what comes into play for me - and maybe others - with the Walmart issue (back on topic ) is fighting for the little guy in a world controlled by "big complicated powers". Unions, corporations, PACs, the government.....it's all nebulous, large and impersonal. Walmart represents that. I don't know if there would be the same venom towards - say - Sam Walton himself. Maybe that's why nobody comes down on Ben and Jerry or Wendy's (Dave Thomas was sooo down to earth!). The personal connection makes the companies less....impersonal? (Now *that* was deep, huh? Back to work, Angie, back to work.....)

If I actually got through the book club book in time for book club, I just might suggest it! My dream vacation is to go somewhere by myself with a suitcase full of books. I did put it on my library hold list. I figure that at the least I can read the first and last chapters.

Unions, corporations, PACs, the government.....it's all nebulous, large and impersonal. Walmart represents that.

Hmm...maybe that book would still be on-topic. The blip I got was how the interests of the individual can get lost in the interest of the institution.

I would much, much rather go and get a scone and cup of coffee from a local bakery because I do feel that personal connection. They retain employees -- I get to know the people behind the counter, they remember my kids (and give them free shortbread ), and the stuff just tastes better and it does create a sense of community. In this case, it's about the same price as Starbucks. I miss the little Ace hardware that was a nice 10 block walk from our old house. I hate dealing with Home Depot, the sloooooow cashier lines, huge store when all I need is a bolt. If I pay 5 cents more for a bolt, so be it!

[Rapunzel]

See, capitalism is a competitive marketplace. If a mom and pop has better selection and/or better customer service then that is going to help them compete better with the larger businesses that may have drastically reduced prices on certain items.

Unfortunately I haven't encountered a fabulous track-record among the smaller "mom-and-pops" in this area. I did tend to buy donuts from the little Asian shops in the DFW area (and, I can't STAND the donuts at Dunkin' Donuts - blegh). And, I really love the neighborhood Chinese place. (Maybe I just love Asian businesses? ). But, other than that I haven't visited a single smaller business that has won my loyalty.

I guess that is what I mean when I say I get peeved with mom-and-pops whining when a large retail store comes in. There are these business associations in Roslindale and West Roxbury that just drive me up the wall. They freak out if any sort of store wants to open up in the area and it seems like any new business owners (small or large chain) have to play ridiculous politics just to get "permission" to open shop around here. Feels like a good ole' boys' club combined with communism (which is a type of good ole' boys' club I suppose). Anyway, maybe these smaller businesses are managed better in other areas - just not in the large cities in which I've lived....

Jennifer

Oh, I think I've got a pretty good handle on capitalism.

I do think a key for small businesses to survive is providing the one thing that larger stores typically fail to do -- trained employees and excellent customer service. Also, I think that business groups complaints are always due to price. Big box stores can create traffic congestion, get (IMO) unfair tax benefits, etc. I guess it depends on what they are complaining about.

For example, a smaller business I know of was concerned about plans for a Wal-Mart to occupy a former grocery store across the street. With the exception of a few lower priced items, this Wal-Mart was not a direct competitor. The problem? Traffic signals and traffic flow would be re-directed to make it easier for drivers to get into the Wal-Mart lot but not easier to get to the business across the street. Ideally, that business owner should just talk to the city and express concerns, right? In reality, the city tends not to not care a whole lot and that leads to the small business owner having to spend money on lawyers.

Based soley on price, I agree that it is does come across as whiney and that one should look for the opportunity to create a niche and compete. There are other factors though that seem to put an undue burden on smaller businesses.

[Rapunzel]

For example, a smaller business I know of was concerned about plans for a Wal-Mart to occupy a former grocery store across the street. With the exception of a few lower priced items, this Wal-Mart was not a direct competitor. The problem? Traffic signals and traffic flow would be re-directed to make it easier for drivers to get into the Wal-Mart lot but not easier to get to the business across the street. Ideally, that business owner should just talk to the city and express concerns, right? In reality, the city tends not to not care a whole lot and that leads to the small business owner having to spend money on lawyers.

That boils down to taxes. I'll bet Wal-Mart was going to be paying tons more in taxes to the city than the smaller business across the street. I could be wrong - but I have a hunch on this.

I hate taxes.

Jennifer

Or donations made? Nah, they're probably too cheap for that, too.

I agree that taxes could be a part but I think that sheer force and size of legal and other resources accounts for a lot too. The really s*&#ty thing, IMO, is that in the case Wal-Mart would NOT being paying some taxes. That's right! As an incentive for moving to the location, the city was offering a refund of city sales tax collected. (I'm sorry, this is so irritating that I just can't say it without some sarcasm). It's all part of a re-development plan. And if the current property owners didn't want to sell, no problem! Just call it a blight and claim the property under eminent domain. At one point, the owner had offered to sell the property (certainly his right) but that changed, I think. Wal-Mart wouldn't do it without the tax incentive anyway.

Here is a summary of it. It's a crappy tv news channel story but gets most of the details (edited somewhat):

DENVER -- Protesters are planning a rally later today against a plan to bring Wal-Mart to their West Denver neighborhood.

The city of Denver wants to redevelop the Alameda Square Shopping Center and put in a new Wal-Mart Supercenter. If Wal-Mart moves in to the 20-acre site on Alameda Avenue and Zuni Street, every business there now -- many of them catering to Asian-Americans -- would have to go. One plan would be to demolish the shops that are standing.

The city has been trying for at least 12 years to redevelop the "blighted" property and now, it appears that Mayor John Hickenlooper's administration might be getting close.

The city is willing to offer Wal-Mart a $10 million subsidy to build at the center and Wal-Mart said it is interested and won't open a store there unless it gets the money.

Organizers from the Front Range Economic Strategy Center said they want to educate the public about tax breaks offered to Wal-Mart as an incentive to build -- tax breaks that they say are unnecessary because the mega-store can afford to pay its own way to build a store.

City leaders say that the city will reap the benefits in tax revenue and local neighborhoods would reap the benefits of a revitalized economic area.

City officials estimate that the superstore would generate $12.2 million in new taxes between its opening date and 2016 as compared to the current shopping center, which turned over $125,263 in sales taxes to the city in 2001.

Copyright 2003 by TheDenverChannel.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

btw....I don't know if Wal-Mart acutally moved in there or not. As of 6/2004, they had not.

From what I have gathered, huge retail places get tax breaks for bringing jobs and sales tax income to communities.

eta that i hadn't read the post right above mine

[Sheherezade]

Tax abatement is a big issue here. Larger companies get to forgo taxes for years in return for bringing in a stable job base. It's a trade off, though. In our little town, a corporation with 75 local employees was negotiating a deal for 7 years of tax abatement in return for staying in town. The Cleveland Clinic just got nabbed for taxes. Apparently, it has always claimed NFP status and paid no property taxes in any location. The courts ruled that they didn't see enough poor people or provide enough charity to qualify. (True from their competitors standpoint - DH- he says the local joke is that the first thing the clinic tests is your wallet. ) I do think big companies with lots of jobs can threaten to leave if they are taxed - and win. In fact, I can think of cases in every city I've occupied. I suppose it's a double edged sword for city government.

[spotty_dog]

The Cleveland Clinic just got nabbed for taxes. Apparently, it has always claimed NFP status and paid no property taxes in any location. The courts ruled that they didn't see enough poor people or provide enough charity to qualify.

OK, that reminds me of a very funny, albeit tangential anectdote. My friend's mom runs Cleveland's Free Clinic. They actually got a *solicitation* for donations -- from the Cleveland Clinic! I think she framed the letter and put it on her wall!

[Rapunzel]

Hmmm.... Yeah, I have a problem with the tax breaks for huge corporations. That smacks of preferential treatment and there should be none in a truly capitalist society. All businesses should be held on equal footing.