Big retail. No.2

The other day I commented on scanners in shops, the fact that they almost encourage shop-lifting, and the cavalier attitude of companies to “wastage” (or non-payment for goods by customers). Why do retailers shrug their shoulders?

1.  The purchase of scanners shows up on the balance sheet as depreciation, and the government has decreed that it can be written off against tax under the heading “Accelerated Depreciation”. Thus, a hunk of tax can be saved almost immediately.  

2.  Stores can reduce their overhead by eliminating counter staff, keeping just one person to supervise, say, six scanning machines.

3.  Since many American companies are now virtual monopolies (thank you, Congress!) there is no problem – if deemed necessary just raise prices to make up for “waste of inventory.”

The scam that has re-written the rules on depreciation is a subsidy to capital investment, encouraging firms to substitute capital for labour. It helps large companies pay no U.S tax at all, thus worsening the fiscal situation. Verizon (telephone and internet) has benefitting from millions of dollars of subsidies (why, please?) and is reported to have had a negative 3% tax liability for the last three years. Almost free of tax, why bother about customers walking out without paying for their soda pop?

Epicurus would have commented that corporations and super-rich individuals should not benefit from discriminatory tax benefits, set up by politicians to encourage “political support”. If an individual or a corporation is not paying at least a net 10%(?) of all profits and income in tax, they should be audited by the IRS. We the taxpayers put up with far too much pampering of big business and big earners.

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