-->
ThoughtsOnline

Friday, January 13, 2006


My first reaction at seeing that Maryland is going to force Wal-Mart to pay more in employee benefits was disgust at what has happened to the state I grew up in.

Maryland used to be a great place to live - good schools, decent taxes, good park system, good state and local police forces and so on... but over the years, they've become one of the bigger nanny states. Motorcycle helmet laws, seatbelt laws, anti-smoking laws, localities declaring themselves 'nuclear free', letting the schools go to seed (my old high school, for example, now has close to half its students unable to read at grade level), raising taxes and on and on and on.

And this new law is just another example of overreaching by a state legislature that just doesn't know its place... and too stupid to figure it out (read the archives if you want the full details).

Then.... I thought that this might be good for my new state, Virginia. As Wal-Mart is forced to either hike prices and/or cut back its expansion plans in the state, shoppers who would have shopped at a Maryland Wal-Mart may come into Virginia, bringing their sales tax dollars with them (much as they do now when they buy gas in Virginia to save a few cents compared to Maryland's higher taxed gasoline and when the buy liquor in DC to take advantage of DC's lower liquor taxes). More tax dollars for Virginia (and from other people, which is a bonus), more employment opportunities for workers as retailers expand in Virginia to take advantage of the Maryland refugees... not bad.

Then... I realized that Wal-Mart, for all its blustering about taking its business elsewhere, isn't going to do anything of the sort. The tax that Maryland just imposed on Wal-Mart (and that is what the law really is, a tax on Wal-Mart and only on Wal-Mart) isn't going to be high enough to destroy Wal-Mart's margins to the point where it's unprofitable for Wal-Mart to operate in Maryland. And, (in my analysis of the situation) neither will Wal-Mart raise their prices in Maryland to compensate for their higher costs in the state; Wal-Mart is likely to raise prices across the area - Virginia included - because it's easier to raise prices a little bit over a wide area than it is to raise prices a lot in a smaller area. There are efficiencies as well in doing things across a wider area - advertising can still be coordinated, for example. In other words, they're going to raise prices in their Virginia stores in response to what the Maryland legislature did.

So... even though I moved out of Maryland a long time ago, happy to get away from the fools and schmucks who run the state, it looks like they're still screwing me...