Takings, nothing more than takings…
I’m staying with my uncle for a few days…he lives in a suburb of Philly. I’ve been talking with him about problem of chains and their drain on local tax dollars…he says that big-box retailers often buy the land their stores sit on, and then lease it to the local franchisee. Then, if the municipality tries to regulate them to boost local businesses or get more tax out of them, the big-box corporation threatens to sue under something called “takings law“–an old English law principle that says property owners can do what they like on their own land.
He also says that, on paper, a chain looks like a better tax revenue source than a local business, because they appear to have computerized, standardized systems for reporting payroll, profit, and so on. Naiive local politicians sometimes think that means more trustworthiness than a local outfit that works with cash and paper books, and they don’t realize that a national or transnational can easily enron their taxable local profit away.
His own town, he says, has pretty much given up trying to tax chains; their books keep breaking even–convenient, since profit is taxable and the IRS automatically audits a business that loses money seven years in a row. So half of the town government’s budget comes from income tax, which hurts poor people most.