Tag Archives: Fox News

Wal-Mart has $76 billion in overseas tax havens

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.

Voting Against Your Own Best Interest

For the life of me, I cannot figure out why Republicans keep voting against their interests. Time has told us that today’s Republican voter will cast their ballot for the person who does not represent their true needs or even their true desires. Of the 100 poorest counties in the country, 95 of them are in red-states. Of the states with the highest uninsured rate, red-states top the list. So why do Republicans keep electing anti-welfare, anti-healthcare candidates? Your guess is as good as mine.

A recent poll from CBS/New York Times sheds light, yet again, on the fact that Republicans are more “liberal” than they think. They’re so liberal, in fact ,that they tend to agree with socialist presidential candidate Bernie Sanders.

Yes, you read that right. Today’s Republican voters unknowingly agree with Bernie Sanders on a multitude of campaign finance reform issues. While Republicans like Reince Priebus and Mitch McConnell say unlimited money in our elections is the American way, their base of supporters wholeheartedly disagree:
◾80% of Republicans believe money has too much influence in our politics and electoral system
◾54% believed that most of the time candidates directly help those who gave money to them
◾55% of Republicans feel the wealthy have more influence in the election process because of current campaign finance laws
◾81% of Republicans felt that the campaign finance system needs fundamental changes (45%) or a complete rebuild (36%)
◾71% want to limit the amount that individuals can give to campaigns
◾73% felt that super PAC spending should be limited by law
◾76% thought that superPACs should be required to disclose their donors

Wow…I guess the party of Mitch McConnell and Reince Priebus are full of First Amendment-hating socialists. While corporate media conglomerates try to paint Sanders as an unpopular kook who has no chance of winning, he actually becomes more popular as more people figure out who he is. And with 80% of Republicans agreeing with him on one of his most fundamental positions, Sanders shouldn’t be underestimated.

If It’s Pushed By the Republicans, It’s Not Good For The Working Man

Thom’s blog
Why Unions Are the Seeds of Democracy
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Scott Walker has struck another blow against democracy.
On Monday, the Republican Wisconsin governor signed into law a bill that made Wisconsin the nation’s 25th right-to-work-for-less state. For Badger State workers, this is nothing short of a disaster. Contrary to what you might hear on Fox So-Called News or read in The Wall Street Journal, right-to-work-for-less laws are not a recipe for economic success.
In fact, according to the Economic Policy Institute, “8 of the 10 worst states in terms of quality of life are [right-to-work] states.” And that’s not even the worst of it.
Studies also show that workers in right-to-work-for-less states make less money, get skimpier health benefits, and are more likely to die on the job than workers in Union Security states. Republicans, of course, like to argue that all this doesn’t matter because right-to-work-for-less states have lower unemployment rates.
But that claim doesn’t really hold up to much scrutiny.
So whatever way you look at it, right-to-work-for-less laws like Wisconsin’s are a raw deal, both for workers and the states they live in. They also pose a mortal threat to a democratic workplace, and that’s arguably a much bigger problem. That’s because the real purpose of right-to-work-for-less-laws isn’t to lower wages or gut health benefits – although those are some nice side benefits as far as corporate America is concerned.
No, the real purpose of right-to-work-for-less laws is to totally gut the negotiating power of unions, the most important check we have against concentrated wealth and power.

Thom Says It All

If ever you aren’t sure why elections matter, just take a look at our court system. Earlier this week, three judges – all appointed by Democrats – stood up for voting rights in North Carolina. Only days earlier, the most conservative members of the Supreme Court issued a stay to slash early voting in Ohio.
The three-judge panel on the Fourth Circuit Court of Appeals reviewed North Carolina’s new voting laws, and put a stop to two of the provisions that would have disenfranchised many voters in the upcoming election. While the democratic appointees declared “the right to vote is fundamental,” the right-wing justices on the Supreme Court allowed Ohio’s restrictive voting laws to stay in effect this November.
To make matters worse, our nation’s highest court didn’t even hear arguments in the Ohio case, or provide any justification for their ruling. The distinction is clear. Judges appointed by Democrats understand that voting is a fundamental right in our nation. Judges who were appointed by Republicans see no problem with limiting our ability to participate in the democratic process.
Elections matter for many reasons, but the effect they have on our judicial system may be the most important reason why we have to get out and vote this November.