Wednesday, June 4, 2014

New Study: Walmart Scammed American Taxpayers for $104 Million by Giving Executives Obscene Bonuses | Alternet

New Study: Walmart Scammed American Taxpayers for $104 Million by Giving Executives Obscene Bonuses | Alternet



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New Study: Walmart Scammed American Taxpayers for $104 Million by Giving Executives Obscene Bonuses

The company is a parasite sucking the country dry.
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This just in: Walmart used a tax loophole to get you and me to pay millions to executive fatcats in undeserved bonuses. How do you like that?
You probably don't like it at all, because you know that on top of that, you also fork over your tax dollars to maintain the company's system of low wages, which require Medicaid, food stamps, and other public assistance to sustain workers who do not earn enough to live on. Not to mention what you pay to maintain the roads and infrastructure Walmart uses to do business. Or what you pay to educate its workforce through public schools. Etc, etc. etc.
Walmart workers can't afford to feed their children, but things are sure different at the top of the Walmart food chain, where executives gobble up stratospheric sums for doing a piss-poor job.
According to a new report by the Institute for Policy Studies (IPS) and Americans for Tax Fairness (ATF) Walmart managed to finagle $104 million in taxpayer subsidies over a six-year period due to tax deductions for “performance-based” executive compensation. Eight top executives were able to rake in more than $298 million in “performance pay” that was fully tax deductible.

The report release comes just days before Walmart’s annual shareholder meeting on Friday, June 6.

Walmart, the study reveals, was able to lower its federal tax payments by $40 million because of obscene pay packages awarded to just one executive — recently retired CEO Michael Duke. Duke took in $116 million in stock options and other performance-based compensation between 2009 and 2014. Of course, his "performance" included presiding over a slump in sales and repeated revelations of worker abuse that have damaged Walmart's reputation. But in the surreal world of corporate America, a corporate CEO can get rich running a company into the ground.

The report, "Walmart’s Executive Bonuses Cost Taxpayers Millions", finds that Walmart’s $104 million in tax savings was made possible by a loophole in U.S. tax law that allows companies to deduct unlimited amounts for performance-based compensation. Ironically, the loophole was created through a 1993 reform meant to discourage excessive executive compensation by capping the amount corporations can deduct from their income taxes for executive pay at no more than $1 million per executive.
But the law backfired: It tore open a giant loophole by exempting stock options and other so-called “performance pay” from the cap.

“When Walmart gets a $104 million tax break for giving its executives outrageous pay packages, the rest of us pick up the tab,” said Frank Clemente, executive director at Americans for Tax Fairness. “With this tax loophole, the bigger the executive bonuses the less Walmart pays in taxes. This is truly one of the most perverse loopholes of all time.”

“Subsidies for executive bonuses come at a huge social cost,” said Sarah Anderson, Global Economy Project Director at the Institute for Policy Studies. “The $104 million in tax subsidies for Walmart’s executive pay over the past six years would have been enough, for example, to cover the cost of providing free lunches for 33,000 children. What’s even more outrageous is that this is a company that pays its workers so little that many of them must rely on such public assistance programs.”

“When large corporations pay multimillion dollar bonuses to executives subsidized by taxpayers, then small businesses and families must pay more,” said Rep. Lloyd Doggett (D-TX), author of a bill that would close the CEO loophole. “Publicly held companies like Walmart can continue paying their executives multimillion dollar bonuses; just don’t expect the American taxpayer to pick up your tab. It makes no sense for working families to subsidize those making nearly 300 times the average worker.”

If the “CEO bonus pay loophole” were closed, taxpayers would save $50 billion over 10 years, according to the Joint Committee on Taxation. In the U.S. House of Representatives, Rep. Doggett (D-TX) has introduced the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (H.R. 3970). Sen. Jack Reed (D-RI) and Sen. Richard Blumenthal (D-CT) have introduced identical legislation (S. 1476) in the U.S. Senate.

The joint ATF-IPS report follows recent work on related issues by both organizations—Walmart on Tax Day: How Taxpayers Subsidize America’s Biggest Employer and Richest Family (April 2014) by Americans for Tax Fairness, and Restaurant Industry Pay: Taxpayers' Double Burden(April 2014) by the Institute for Policy Studies.
Basically, Walmart is a giant parasite, sucking on the American taxpayer to reward executives and steer the country toward even more dangerous inequality and instability.
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