Wal-Mart hides $76 billion in overseas tax havens while taxpayers help feed low-wage workers: study
Wal-Mart Stores Inc. was able to avoid paying $3.5 billion in taxes last year by owning $76 billion of its assets in overseas tax havens, a study found this week.
United Food & Commercial Workers International Union research published by Americans for Tax Fairness on Wednesday showed that Wal-Mart had created more than 78 offshore subsidiaries and branches since 2009 that the company had not disclosed in U.S. securities filings, Bloomberg reported.
According to the study, 90 percent of the overseas assets owned by Wal-Mart were through two of the most popular tax havens in the world, Luxembourg and the Netherlands.
Although the company has no stores in Luxembourg, it reported $1.3 billion profits in the country between 2010 and 2013, which were taxed at a rate of less than 1 percent.
“This report is continuing evidence that everybody has been engaging in cross-border tax avoidance,” Harvard Law School professor Stephen E. Shay told Bloomberg.
Wal-Mart officials testified before Congress in 2011 in favor of a law that would exempt companies from paying taxes on profits earned overseas. Since 2008, the company’s overseas earnings have more than doubled from $10.7 billion to $23.3 billion.
Wal-Mart spokesperson Stephen E. Shay called the report misleading, and pointed out that the company already paid $6.2 billion in U.S. taxes in 2014 or “nearly 2 percent of all corporate income tax collected by the U.S. Treasury.”
A study from the University of California Berkeley Labor Center found earlier this year that poverty-level wages paid by companies like Wal-Mart were costing U.S. taxpayers $153 billion a year.
“When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs,” report co-author Ken Jacobs explained at the time. “This creates significant cost to the states.”