WASHINGTON – A new report released Thursday by Americans for Tax Fairness (ATF) reveals that Walmart uses tax breaks to dodge a whopping $1 billion annually, on average, in federal taxes. It also shows how Walmart is working behind the scenes to help lower the U.S. corporate tax rate to 25%, which would allow Walmart to cut its tax bill on average another $720 million a year.
The report, How Walmart is Dodging Billions in Taxes: And Scheming to Avoid Billions More, also reveals that the company currently holds $21.4 billion in profits offshore, where those earnings are exempt from federal taxes until they are brought back to the United States – which may never occur. Walmart’s offshore profits have doubled in recent years at the same time that its offshore investments flatlined, suggesting that the company is piling up cash overseas to avoid paying U.S. taxes on the earnings.
The study also reveals the ways in which Walmart is working to reduce corporate tax rates and eliminate all taxation of foreign profits, known as a territorial tax system. Walmart lobbies heavily on Capitol Hill to gain influence over the legislative process, employing 74 lobbyists and spending $32.6 million lobbying on taxes (the company’s top lobbying priority) and other issues over the past five years. Walmart also tries to buy access to lawmakers by contributing heavily to their campaigns – giving $6.1 million since 2009, disproportionally to members of the two Congressional tax-writing committees. In addition, Walmart is the only corporation among its competitors that is a member of three major industry organizations that are leading the public relations and lobbying campaigns to “reform” the tax system – the RATE (Reforming America’s Taxes Equitably) Coalition, the Alliance for Competitive Taxation and the Business Roundtable.
“When Walmart dodges billions in taxes the rest of us are forced to pick up the tab,” said Frank Clemente, executive director of Americans for Tax Fairness. “It means higher deficits, higher taxes on American families and small businesses, or slashed budgets for services we count on.”
“When Walmart or other large American corporations call for lower corporate tax rates, Americans should remember that many of them already pay hundreds of millions or billions less than they owe because of tax loopholes. We should focus on what corporations actually pay – not what they’re supposed to pay under current law. Americans shouldn’t get bamboozled when corporations claim they pay too much in taxes.”
The study released Thursday comes on the heels of two previous reports by Americans for Tax Fairness on Walmart – Walmart’s Executive Bonuses Cost Taxpayers Millions, written jointly with the Institute for Policy Studies, and Walmart on Tax Day: How Taxpayers Subsidize America’s Biggest Employer and Richest Family.
Americans for Tax Fairness is a diverse coalition of 425 national and state organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.