Tag Archives: Corporate Socialism

Corporate Greed, Political, Union

Wal-Mart has $76 billion in overseas tax havens

Bloomberg
By Jesse Drucker
7 hours ago

Wal-Mart Stores Inc. owns more than $76 billion of assets through a web of units in offshore tax havens around the world, though you wouldn’t know it from reading the giant retailer’s annual report.
A new study has found Wal-Mart has at least 78 offshore subsidiaries and branches, more than 30 created since 2009 and none mentioned in U.S. securities filings. Overseas operations have helped the company cut more than $3.5 billion off its income tax bills in the past six years, its annual reports show.
The study, researched by the United Food & Commercial Workers International Union and published Wednesday in a report by Americans for Tax Fairness, found 90 percent of Wal-Mart’s overseas assets are owned by subsidiaries in Luxembourg and the Netherlands, two of the most popular corporate tax havens.
Units in Luxembourg — where the company has no stores — reported $1.3 billion in profits between 2010 and 2013 and paid tax at a rate of less than 1 percent, according to the report.
All of Wal-Mart’s roughly 3,500 stores in China, Central America, the U.K., Brazil, Japan, South Africa and Chile appear to be owned through units in tax havens such as the British Virgin Islands, Curacao and Luxembourg, according to the report from the advocacy group. The union conducted its research using publicly available documents filed in various countries by Wal-Mart and its subsidiaries.
Randy Hargrove, a Wal-Mart spokesman, called the report incomplete and “designed to mislead” by its union authors. He said the company has “processes in place to comply with applicable SEC and IRS rules, as well as the tax laws of each country where we operate.”
Mailbox Subsidiaries
The union behind the study backs the Organization United for Respect at Wal-Mart, a group that campaigns for wage increases and more predictable schedules. Wal-Mart has historically resisted unions and discourages employees from joining them.
The report comes a week after the Group of Twenty nations unveiled its latest effort to combat multinational corporate tax avoidance. The body wants companies to disclose to regulators where they book profits, employees and sales, so tax authorities can be aware of discrepancies between where corporations report income and where they have operations.
Hargrove, the Wal-Mart spokesman, pointed to guidance issued by the SEC that permits companies to avoid disclosure of subsidiaries with significant “intercompany transactions.” He said Wal-Mart’s tax savings overseas was driven by lower rates in markets including Canada and the U.K.
‘Continuing Evidence’
Companies such as Google Inc., Apple Inc. and Starbucks Corp. have come under fire for avoiding billions of dollars of income taxes by attributing profits to mailbox subsidiaries in low-tax jurisdictions like Bermuda. The Group of Twenty has directed the Organization for Economic Cooperation and Development to develop plans to crack down on such strategies.
The new Wal-Mart disclosures could expand the scope of international tax reform, which has often focused on technology companies that move profits offshore by assigning valuable patent rights to mailbox units. Bloomberg News reported last year that Inditex SA, the parent of Zara, the world’s biggest fashion retailer, cut its taxes by shifting billions of dollars of profits to a tiny Dutch unit.
“This report is continuing evidence that everybody has been engaging in cross-border tax avoidance,” said Stephen E. Shay, a professor at Harvard Law School and former deputy assistant secretary for international tax affairs for the Obama Treasury Department.
Hybrid-Loan Strategy
Nearly a decade ago, Wal-Mart ran into trouble over strategies to avoid U.S. state income taxes. It used a real estate investment trust to effectively pay rent to itself, generating big tax deductions, even though the rent payments never left the company. At least six states changed their tax laws after publicity about the tactics.
Since then, Wal-Mart has stepped up its use of offshore tax havens. It has created 20 new subsidiaries in Luxembourg alone since 2009, according to the report.
Wal-Mart employs a popular legal strategy in that country called a hybrid loan. It permits companies’ offshore units to take tax deductions for interest paid — typically on paper only — to their parents in the U.S. The parent, however, doesn’t include that interest as taxable income in the U.S.
The OECD has called for an end to the tax benefits of such loans. Luxembourg generated headlines last year after the International Consortium of Investigative Journalists revealed its role in cutting the tax bills of hundreds of multinationals.
Union Funding
U.S. companies owe tax at a rate of 35 percent but can defer indefinitely the income taxes on profits attributed to overseas units. In 2011, Wal-Mart’s then-chief executive officer, Mike Duke, called in testimony before Congress for a system that would exempt from U.S. income tax the earnings that multinationals generate overseas.
Wal-Mart’s accumulated offshore earnings have doubled to $23.3 billion in 2015 from $10.7 billion 2008. The company operates about 6,300 stores in 27 countries outside the U.S. and last fiscal year reported 28 percent of its sales abroad, or about $137 billion.
Wal-Mart paid $6.2 billion in U.S. income tax last year, Hargrove, the company spokesman, said, or “nearly 2 percent of all corporate income tax collected by the U.S. Treasury.”
Americans for Tax Fairness called on the European Union to open investigations into whether the Luxembourg tax benefits constitute illegal state aid. The EU has issued preliminary findings that this was indeed the case with companies using similar strategies in various countries, including as Starbucks in the Netherlands, Apple in Ireland and Fiat SpA in Luxembourg.
The tax group receives most of its funding from foundations, including the Ford Foundation, Open Society Foundations, Bauman Foundations and Stoneman Family Foundation. It’s also funded by public-sector unions, including the American Federation of State, County and Municipal Employees and the National Education Association.

Corporate Greed, Political, Union

Right-to-work goes down in flames in Illinois House with zero yes votes

Gov. Bruce Rauner’s desires to have right-to-work in Illinois went down in flames in the House on Thursday, gaining zero yes votes in a fiery debate Democrats aimed squarely at the governor.

The vote tally was 0 yes votes, 72 no votes and 37 voting present, offering a blistering rebuke to Rauner’s anti-union agenda. A handful of Republicans went for a walk during the vote, not publicly falling on one side or another.

Republicans dismissed the vote as political theater even as Democrats pit workers’ rights against corporate greed and called Rauner “divisive” for touring the state and essentially asking local towns to kick unions out.

“Don’t be afraid, stay with us, vote no!” state Rep. Jay Hoffman, D-Belleville, said.
Illinois House Republican Leader Jim Durkin, R-Western Springs, lambasted Democrats for moving what he said amounted to “sham bills” in the House. The legislation voted on Thursday was not drafted by the governor’s office. Last week, Illinois House Speaker Mike Madigan had urged Rauner to give him language for a bill, needling Rauner that he had talked about right-to-work for 100 days.

“What’s happening today, what happened last week really is a disservice to this body, to this chamber and to this building,” Durkin said. “I’m embarrassed to be part of this process today. I think this is a very dark moment in this body’s chamber.”

Rauner’s office countered that Madigan and Democrats were walking away from the negotiating table by plucking out controversial issues and voting them down. In the Capitol on Thursday, Rauner dismissed the notion that a vote on right-to-work was meant to embarrass the governor, who has made it his marquee issue since he was sworn into office in January.
head to Springfield)

Asked whether the vote on right-to-work — which essentially allows people to work in union jobs without paying union dues — was meant to embarrass him, Rauner said: “Difficult negotiations in government often involve political theater. That’s a little bit of what that is. I don’t take it that way. This is just part of a political process. We’re working together and we’ll get through it. . . . There’s a lot of pressure from special-interest groups who don’t want to change. We are in a long slow decline we need to grow pretty strongly . . . we are encouraging Republicans to stay strong together. We’re a super-minority.”

Action, Corporate Greed, Political

Scott Walker Promises To Finish Off Unions With National “Right-To-Work” Law If Elected President

The withering power of American unions and worker’s rights will hear its death knell should Scott Walker ever see the Oval Office. After crushing organized labor in Wisconsin and whatever hopes the people might have had of escaping the miserly yoke of the Koch Brothers and their corporate allies, Walker has now declared that he would pass a “right-to work” law on a national level, effectively gelding American labor’s bargaining power and killing the union off for good.

In a show of hypocrisy that we have come to expect from the Republican agenda, the “limited government” advocate would use federal power to interfere with the balance of power between employers and employees, saying that “[what he did in Wisconsin] was fight the stranglehold that big government special interests had on state and local governments. I think in Washington we need that even more.”

Of course, in reality, he’s tightening the stranglehold that Republican special interests have on the wallets and rights of the American middle class. The “right to work” law is a misnomer- it forces unions to represent workers who don’t pay dues, depriving them of needed funds and their negotiating power, leaving workers at the mercy of corporate greed and shattering one of our nation’s most sacred covenants. The International Monetary Fund published a study last month proving that unions help keep too much money from flowing to the top 10% of earners and plays an important role in keeping income inequality honest.
To put it in perspective, consider this: “Last year, 11.1 percent of workers belonged to a union, down from 20.1 percent in 1983. In that same time period, income inequality has been skyrocketing, and in 2012 the top 10 percent of earners took home more than half of all income, the highest amount ever recorded since 1917.”

It’s a sad day for the American worker and a sign of more danger on the horizon. Walker’s blatant pandering to big corporations and big business with his right-to-work law so enraged Wisconsin that a recall election was organized. As a thank you for Walker’s slavish devotion to their interests, corporate backers hooked him up an astonishing $31 million dollars- $8 million from the Koch Brothers alone- and funded a massive misinformation and propaganda campaign that kept him his job.

He’s now under federal investigation for violating finance fairness laws during that election, but that hasn’t stopped the preening schmo from embarking on the campaign trail, trumpeting lies about his economic prowess (Wisconsin has a $2 billion deficit and one of the lowest job creation rates in the country) and neglecting his home state in the meantime.

One only has to look at states like Wisconsin or Kansas to see the fruits of the Republican agenda. The working families of America suffer while millionaires make out like bandits. The union has been a proud bastion of worker’s rights in America for too long to see it crumble like this. Scott Walker, Tea Party darling and thrall of the 1%, would serve this country to his masters on a silver platter if given the chance. Our nation and our people deserve so much better.