Wal-Mart is the largest corporation in America, according to Fortune 500. According to Good Jobs First, Wal-Mart recently posted earnings of $350 billion in annual revenue and reported a profit of $11 billion (with a b).
One thing is clear about Wal-Mart: they don’t like to spend money. My mom always said, “That’s how the rich stay rich.” I guess she was right.
On its hike to the top, Wal-Mart has dodged fair pay with illegal workers at more than 61 stores in 2003 and followed it up in 2005, though Wal-Mart executives (of course) swear that they don’t know a thing about it.
In yet another blow to its image, an investigation of Wal-Mart’s local property tax records indicates that Wal-Mart systematically seeks to minimize its payment of taxes that support public schools and government services. Based on a large national sample of Wal-Mart stores and a review of all of its distribution centers open as of the beginning of 2005, Good Jobs First, a self-described “national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development and smart growth for working families” has concluded that Wal-Mart has filed assessment challenges at more than one-third of its facilities around the country. Additionally, Good Jobs First reports that, at many facilities, there have been appeals in multiple years, totaling more than 2,100 property tax challenges nationwide (you can download the report here as a pdf).
It seems that Wal-Mart doesn’t want to pay its fair share.
This is interesting from a policy standpoint because there are many indications that Wal-Mart significantly damages the economic infrastructure of the communities that it enters. Think I’m kidding? Read this article that concludes that as smaller businesses close when Wal-Mart enters a community, poverty rates may rise. This is because according to the Penn State University study “retail workers displaced from existing mom-and-pop-type operations work for Wal-Mart at lower wages because they have no alternatives.” The additional fall-out from these kinds of closures means that local businesses that supplied those stores, such as wholesalers, transporters, logistics providers, accountants, lawyers, and others also suffer financially – and may leave the community altogether.
So let’s do the math. Giant Wal-Mart shows up. Smaller stores shut down. Those who can, leave the community in search of better opportunities. Those who stay work for Wal-Mart at lower wages than they were being paid before. And those that stay get the benefit of… anyone? anyone? Not higher wages. Not more benefits. And certainly not better opportunities for the community. Because in more than 2100 instances, Wal-Mart has chosen to challenge its tax assessment at a cost to the community. It’s $11 BILLION profit doesn’t take a hit. But your local school might.
Don’t get me wrong. I’m not anti-business. And I’m certainly not pro-tax. And I’m not against the free market.
In fact, for the last several years, I’ve served on the Executive Committee for our local development corporation – and acted as President for the past two years. I have worked with developers and retailers to bring new businesses to our community. And while I’m not a fan of all chains, I understand the value that they can bring to a community. I have watched as LA Fitness, Applebee’s, Dunkin Donuts and (coming) Starbucks have put down stakes in our neck of the woods. I am pleased to say that Wal-Mart has stayed away.
And as a tax professional, I agree that businesses and individuals should not pay more taxes than they have to. But I wonder why the real “rollbacks” at Wal-Mart are challenges to property taxes on an extreme scale (again, more than 1/3 of their operations) – taxes that support the local community governments and schools – when the company is reporting profits in the billions. Billions. If other businesses and individuals in those same community have to pay their fair share, why should Wal-Mart be different? Because it’s bigger? Because it employs more people (though again, generally replacing workers from other retailers)?
It shouldn’t. When it comes to taxes, I agree that you shouldn’t line up and take whatever the government gives you if it’s not fair. But if every community that Wal-Mart encroaches upon has taxes that aren’t fair as far as Wal-Mart is concerned, maybe it’s not the communities. Maybe, just maybe, it’s a company that cares more about dollars than communities.
I’m not telling you where to shop. You buy your tube socks wherever you want. But maybe you should think about where your money is going – remember, you’ve already paid your taxes when you take that money out of your wallet. Shouldn’t Wal-Mart pay its taxes?
Wal-mart is the worst.
Certainly kids that are better educated won’t work at Wal-Mart. Hmmm…I wonder if that’s it.
And don’t get me started about how they put thousands of dollars into religious organizations but won’t support their own employees.
The real problem is hiring illegal immigrants. Remember… it’s against the law????