November 20, 2014

Erica Smiley

Walmart Avoids Paying $1 Billion in Taxes Every Year

Walmart, America’s largest corporation, dodges an average of $1 billion in U.S. taxes every year through loopholes and is scheming to avoid billions more, according to a new report published today by Americans for Tax Fairness.

Image courtesy of Americans for Tax Fairness.
Image courtesy of Americans for Tax Fairness.

The profitable mega retailer is well-known for its aggressive efforts to cut costs and maximize profits, even at the expense of its own workforce. The company provides such low wages and meager benefits that many of its hourly associates are forced to rely on taxpayer-funded government assistance, such as food stamps and Medicaid. An April 2014 report revealed that by transferring its employees benefits onto the public, Walmart costs American taxpayers an estimated $6.2 billion each year.

Today’s report expands on that previous research to reveal ways Walmart avoids paying its fair share in taxes that would otherwise help fund the social safety net programs its employees are forced to use.

Exploiting myriad loopholes, the company dodged $5.1 billion in taxes from 2008 to 2012, or about $1 billion every year, according to the report. While the corporate tax rate is 35 percent, Walmart paid an average of only 29.1 percent over that period. A particularly perverse example of one such loophole was reported earlier this year: Walmart actually pays less in taxes by paying executives more through extravagant “performance pay” bonuses.

Meanwhile, the company has spent millions of dollars lobbying Congress to lower corporate tax rates even further.

“Walmart employs 74 lobbyists – 80 percent of whom have previously served in government – and it has spent $32.6 million lobbying on tax and other issues over the past five years,” according to the report.

If the company is successful in persuading congress to lower the corporate tax rate, the report authors claim Walmart could additionally avoid as much as $720 million a year in taxes.

Walmart’s alacrity for avoiding taxes extends beyond the company to the owners themselves. The Waltons are the wealthiest family in the United States and control a majority of shares in Walmart. The family receives an estimated $7.8 billion per year in tax breaks and taxpayer subsidies and relies on other schemes to avoid paying an estimated $3 billion in estate taxes each year.

As the owners of Walmart, the Waltons are in a position to provide the company’s hourly associates a much-needed pay increase that could potentially end their reliance on American taxpayers to make ends meet.

Members of OUR Walmart, an organization of current and former Walmart workers, have questioned why they must rely on taxpayers when working at a company boasting $473 billion in revenues last year. OUR Walmart has called on the retail giant to provide a minimum of $15 an hour and full-time schedules to hourly associates, a move that would only increase the Walmart’s prices by mere pennies, according to an analysis by Slate and Marketplace last year.

Even as other large retailers have announced pay increases, the Waltons have ignored calls to raise employee wages and curb its reliance on taxpayers to support Walmart employees. Instead, Walmart has retaliated against employees who speak out for fair wages through disciplinary actions and even outright firings.

Just last week, Walmart associates announced they are going on strike on Black Friday to protest the unlawful retaliation against members of OUR Walmart who have demanded the retailer boost pay to $15 an hour and provide full-time jobs.

Read the full report, How Walmart Is Dodging Billions in Taxes: And Scheming to Avoid Billions More, by Americans for Tax Fairness.

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