4/24/2005

4-24-05 - 3

4-24-05

There's a big brouhaha locally about the "Dalidilio Marketplace". Basically, it's a developer who wants to build a Target here, and because of the building restrictions in SLO, they have to hold a general vote to get approval. The only real issue in the end for SLO voters is whether you want SLO to grow and become more like a suburb of a big city - if you answer yes, vote yes. One of the most ridiculous things that the politicians are touting to get it passed is how much money it will bring in via sales tax. It's a common argument, but completely flawed. First of all, just by having a Target, people are not going to spend more. People will spend roughly the same amount on consumer goods, they'll just buy at Target instead of other places, the total spending and thus sales tax will be exactly the same. Now, one thing that may happen is the sales tax will go this city instead of neighboring cities with other shopping options, but that's sort of a ridiculous phenomenon too (illogical boundaries of commerce at city borders). The other idea is simply the idea that sales tax is "generating money". Quite the opposite, it's actually taking money AWAY from the community. People are buying goods, which is exchanging currency for assets. Some of that is skimmed for taxes, but also some of it is skimmed for the profits of the Target, which takes that profit and sends it away from the community to its corporate overlords. The whole goal of Target's operation is to take money OUT of the local economy - that's why they're in business and how their shareholders make a profit. Of course the very worst form of this fallacy is with casinos. So many little communities bring in casinos because they will "stimulate the local economy" and provide money for services. Yes, sort of, but really what casinos do is take massive amounts of money from the people and route it to the casino owners and profiteers; the net result is a huge suction of money out of the local economy.

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