America's big box stores sucked up corporate welfare and killed Main Street -- now they're ducking property tax

For a generation, big box stores have swept across America, using predatory pricing and other dirty tricks to kill the independent retail sector; they used their corporate lobbying muscle to tempt cities and towns into handing out massive corporate welfare checks to lure them to town, and now, with the help of hustling contingency lawyers, they are promulgating a property-tax scam called "the dark store theory" that is cutting their taxes in half or more, with further reductions every year, and no end in sight.

The "dark store theory" holds that property taxes on thriving, super-profitable big box stores should not be based on how much the property sold for, plus the capital investment, minus depreciation -- instead, these stores should be valued based on the selling price of nearby failed big-box stores that have been sold at knock-down prices.

Big box stores used their generous municipal subsidies to overbuild across American towns, creating a glut that resulted in widespread closures after the financial crisis. Because big box stores are so terribly built -- shoddy construction, weird layouts, and not even enough freight docks to use as a warehouse -- the shuttered stores sell for a tiny fraction of their book value.

But even though the big boxes are shuttering their stores like crazy, the remaining stores are still profitable -- thanks to the overinvestment in big box stores during the rampup phase, all the local retail that might have competed with the remaining stores has collapsed. That leaves locals with no choice but to drive longer distances to the remaining stores to shop, meaning that the predatory mega-retailers now get to spend less to do the same business. Read the rest