Wal-Mart's Representation Without Taxation

Under the heading Wal-Mart Courts State Politicos", Business Week says:

A new report shows that Wal-Mart has jacked up political contributions in states where it wants to reduce its tax bill.

The Wall Street Journal reports that Wal-Mart had asked the Ernst and Young consulting firm to help organize their real estate holdings to minimize property taxes where they do business.  This approach has worked pretty well for some years, but Googling "wal-mart real estate tax" brings up a number of lawsuits and lesser disputes between Wal-Mart and state authorities.

It probably costs less initially for Wal-Mart to hire a consulting firm to take advantage of existing law than to bribe--, oops, make campaign contributions, to persuade politicians to change the law in its favor.  Now that a number of states have noticed that a number of noisy voters don't like Wal-Mart, their political leaders are filing suit to get Wal-Mart to pay more taxes.

Wal-Mart doesn't like paying taxes any more than you or I do, but, unlike us, Wal-Mart has the money to do something about it.  Will making generous campaign contributions to state politicians work for Wal-Mart?  Do politicians want to get reelected?  To ask the question is to answer it.  The original definition of an "honest politician" is a politician who stays bribed.

Wal-Mart's money will work to Wal-Mart's advantage, just as rich people's contributions to the Ways and Means Committee of the US Congress have worked to their advantage since the committee was formed.  Paying politicians to cut their taxes gives Wal-Mart representation without taxation.  Government never takes a pay cut; they'll get more money from you and me by raising our taxes.  Wal-Mart pays for representation without taxation; the rest of us -- who can't pay -- get taxation without representation.

Many articles make it sound like Wal-Mart conspires against us taxpayers, but don't forget that Wal-Mart doesn't pay real estate taxes, we customers pay Wal-Mart's real estate taxes.  Wal-Mart is profitable, it takes in more money than it pays out.  The money Wal-Mart gets from we the people who buy from them pays not only the cost of the goods we buy; it pays their electric bill, their wage bill, their property tax bill, their health-care bill and every other bill they pay, including campaign contributions and lawyer's fees.  If taxes, legal fees, consulting fees, or campaign contributions go up, they'll raise prices to match.  It's we who pay Wal-Mart's taxes, not Wal-Mart.

While we're thinking about who really pays Wal-Mart's bills, think about Wal-bangers who say that the government subsidizes Wal-Mart because a lot of Wal-Mart employees get government health benefits.  Most low-level Wal-Mart employees have limited skills, skilled, smart ones move up as Wal-Mart grows.  If they didn't work at Wal-Mart, a lot of Wal-Mart employees would get welfare and food stamps in addition to health care.

The truth is, Wal-Mart subsidizes the government because their employees don't collect welfare or unemployment, which is what they would otherwise be doing.  Nobody takes an entry-level job at Wal-Mart if they can find anything else; the only other recourse for most of them is not to work at all.

Wal-bangers who want Wal-Mart to pay their employees more in either higher wages or more expensive health care benefits are really saying that you and I should pay more when we shop at Wal-Mart.  Wal-bangers know that won't sell so they lie to us and say that better health benefits won't cost us anything.  Have we forgotten that the cost of health care would have sunk GM, Ford, and Chrysler if they hadn't shifted the costs to the union?

Wal-Mart's low prices save us a lot of money, do we really want Wal-Mart going the way of Detroit?

Will Offensicht is a staff writer for Scragged.com and an internationally published author by a different name.  Read other Scragged.com articles by Will Offensicht or other articles on Economics.
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