Milwaukee County Executive, Scott Walker, received his largest campaign contributions from the founding family of the notoriously anti-employee, but taxpayer subsidzed, Wal-Mart Corporation.
Jim, Christy and Lynne Walton, residents of Arkansas, contributed $7,500 to Walker. The trio is bankrolling Walker because of his support for the Milwaukee private school voucher program according to the Milwaukee Journal Sentinel.
The Walton’s $7,500 contribution pales in comparison to the $54,120,825 million Milwaukee’s taxpayers are shelling out for this program in fiscal year 2008.
That’s a return on investment that would make even Warren Buffet salivate!
The voucher program is partially financed by a reduction in state aids to MPS of 45% of the total cost of the program. But MPS is allowed to levy property taxes to make up for the amount of aid lost due to this reduction. So the state pays 55%, the voucher program takes the other 45% from MPS, and MPS turns around and raises the lost 45% by increasing local property taxes on some of Milwaukee County's poorest residents. In effect, Milwaukee's property taxpayers are financing two school systems!
Walker poses as a friend of the taxpayer. But his support for the Milwaukee voucher program has caused property taxes to soar. Next year, the city’s taxpayers will be forced to raise their taxes another $5 million as the program's cost to MPS grows to $59.5 million.
It’s not surprising that heirs to the founder of Wal-Mart are Walker backers. Wal-Mart is one of the world’s most profitable corporations, generating $315 billion in revenue and $11.2 billion in profits in 2006. Yet, the company is notorious for using legal loopholes to avoid taxes and regularly feeds at the public trough!
Wal-Mart sticks it to Wisconsin’s beleaguered taxpayers by transferring ownership of its stores to in-house real-estate investment trusts (REITS). It then cuts its taxes by taking deductions for rent payments that never leave the company. A North Carolina Judge recently ruled that Wal-Mart owed that state millions in back taxes because REITs were little more than tax avoidance schemes.
It is well documented that Wal-Mart’s employees are poorly paid, part timers. As a result, 1,673 of Wal-Mart's Wisconsin employees and their dependents are enrolled in BadgerCare, the taxpayer financed medical care program for low-income families. The cost-$3.7 million dollars!
Wisconsin taxpayers have also shelled out $22 million in various subsidies to Wal-Mart.
The Walton trio aren’t the only ones from outside Milwaukee County financing the County Executive who is being challenged by State Senator Lena Taylor.
Fully 62% of the $360,000 Walker raised in the second half of last year came from outside the county. Taylor, on the other hand, raised more than 80% of her campaign funds from Milwaukee County residents!
Republicans like Walker talk about local control and holding the line on taxes. But they don't walk the walk!
It's not locals who control the Walker campaign. But, it's locals who pay the bills he runs up.
Showing posts with label Wal-Mart. Show all posts
Showing posts with label Wal-Mart. Show all posts
Thursday, February 14, 2008
Wednesday, January 16, 2008
North Carolina judge provides hope for Wisconsin's taxpayers
A North Carolina state judge’s ruling against a Wal-Mart tax avoidance scheme provides hope for Wisconsin’s beleaguered taxpayers who have seen their taxes increase as corporate taxes have decreased.
Wal-Mart is one of the world’s most profitable corporations, generating $315 billion in revenue and $11.2 billion in profits in 2006.
Yet in North Carolina, Wal-Mart transferred ownership of its stores to various in-house real-estate investment trusts (REITS), and then cut its taxes by taking deductions for rent payments that never left the company.
In a judgment signed on December 31, Emergency Special Judge of Superior Court Clarence Horton Jr. ruled "there is no evidence that the rent transaction, taken as a whole, has any real economic substance," other than for cutting Wal-Mart's taxes. "It is particularly difficult for the court to conclude that rents were actually 'paid' when they subsequently returned to the payor corporation," the judge ruled.
The judge dismissed the giant retailer's suit, which sought a refund of the $33.5 million in taxes, interest and penalties.
Wal-Mart, like other corporations doing business in the Wisconsin, manipulates the tax code to avoid paying taxes using REITS and Passive Investment Corporations (PICs). Both are little more than accounting gimmicks that turn taxable profits into operating costs, often reducing taxable income to zero. These companies are gaming the system at the taxpaying public’s expense.
It’s not as if Wisconsin’s business taxes are high. Forward Wisconsin, the state’s public private marketing and business recruitment agency, brags that: “Wisconsin business taxes are low - lower than those in 35 other states..." and " Wisconsin's business-friendly attitude is reflected in positive business tax changes that have been made in every biennial legislative session since the early 1970s. "
The Accounting firm, Ernst & Young, reports that the corporate share of state and local taxes in Wisconsin is among the 10 lowest in the country.
Nonetheless,corporations avoided $643 million in Wisconsin income taxes in 2006, according to a recent study in the tax journal, State Tax Notes. The Institute of Wisconsin’s Future reports that Microsoft, the computer behemoth that made $12 billion in profits in 2005, didn't pay a penny of Wisconsin corporate income tax. Nor did Merck, the pharmaceutical giant with $5 billion in 2005 profits. Nor Sears, whose retail family includes Kmart and Lands' End, which made $1 billion in 2005 profits.
Since 1978 Wisconsin’s corporations' real (inflation adjusted) profits have doubled, while real tax contributions have actually declined slightly. As a result, the share of state revenue contributed by corporations has fallen dramatically:
1979-10%
1989-7%
2000 4.6%
2006 3.5%
Corporate tax avoidance schemes have contributed to shifting the tax burden onto homeowners and Wisconsin’s working families.
As corporate tax contributions have declined, state government has reduced its support for the University of Wisconsin system, technical colleges and local governments. Services have been cut and residential property taxes, tuition and fees have increased.
Milwaukee's state aid has declined from 45% of the city’s budget in 1998 to 34% in 2006. To compensate residential property taxes have increased from 12% to 17% and non property tax revenue such as parking ticket fees and street parking permits from 21% to 30%.
MATC, the state’s flagship technical college, has seen its state aid decline from over 30% in 1990 to 14% in 2007. Students now contribute more to our technical colleges through their tuition and fees than the state does.
Corporations that use accounting gimmicks to avoid paying their taxes are shifting the burden of financing local government and educational services to homeowners, students, and other citizens. They are classic free riders, benefiting from these public goods, but refusing to pay their fair share.
Wisconsin's billion dollar plus structural deficit is, in part, the result of these tax avoidance schemes.
In response, state Senator Dave Hansen (D-Green Bay) has introduced the Corporate Tax Accountability Act (SB367) which would require publicly-held corporations to report their profits and tax contributions to the state. The legislation will affect less than 1% of Wisconsin’s companies, primarily large multi-state businesses like Wal-Mart and Merck.
Co-sponsors include nine senators and nineteen assembly representatives. Assembly Representative Phil Garthwaite (D-Dickeyville) plans to introduce an Assembly version.
This legislation will provide legislators with important information if they are to provide Wisconsin’s beleaguered taxpayers with real tax relief.
Wal-Mart has announced that it hasn't decided on how it will proceed in the aftermath of the North Carolina ruling, and declined to comment on the case's specifics due to a possible appeal. It continues to use REITS in Wisconsin.
Wal-Mart is one of the world’s most profitable corporations, generating $315 billion in revenue and $11.2 billion in profits in 2006.
Yet in North Carolina, Wal-Mart transferred ownership of its stores to various in-house real-estate investment trusts (REITS), and then cut its taxes by taking deductions for rent payments that never left the company.
In a judgment signed on December 31, Emergency Special Judge of Superior Court Clarence Horton Jr. ruled "there is no evidence that the rent transaction, taken as a whole, has any real economic substance," other than for cutting Wal-Mart's taxes. "It is particularly difficult for the court to conclude that rents were actually 'paid' when they subsequently returned to the payor corporation," the judge ruled.
The judge dismissed the giant retailer's suit, which sought a refund of the $33.5 million in taxes, interest and penalties.
Wal-Mart, like other corporations doing business in the Wisconsin, manipulates the tax code to avoid paying taxes using REITS and Passive Investment Corporations (PICs). Both are little more than accounting gimmicks that turn taxable profits into operating costs, often reducing taxable income to zero. These companies are gaming the system at the taxpaying public’s expense.
It’s not as if Wisconsin’s business taxes are high. Forward Wisconsin, the state’s public private marketing and business recruitment agency, brags that: “Wisconsin business taxes are low - lower than those in 35 other states..." and " Wisconsin's business-friendly attitude is reflected in positive business tax changes that have been made in every biennial legislative session since the early 1970s. "
The Accounting firm, Ernst & Young, reports that the corporate share of state and local taxes in Wisconsin is among the 10 lowest in the country.
Nonetheless,corporations avoided $643 million in Wisconsin income taxes in 2006, according to a recent study in the tax journal, State Tax Notes. The Institute of Wisconsin’s Future reports that Microsoft, the computer behemoth that made $12 billion in profits in 2005, didn't pay a penny of Wisconsin corporate income tax. Nor did Merck, the pharmaceutical giant with $5 billion in 2005 profits. Nor Sears, whose retail family includes Kmart and Lands' End, which made $1 billion in 2005 profits.
Since 1978 Wisconsin’s corporations' real (inflation adjusted) profits have doubled, while real tax contributions have actually declined slightly. As a result, the share of state revenue contributed by corporations has fallen dramatically:
1979-10%
1989-7%
2000 4.6%
2006 3.5%
Corporate tax avoidance schemes have contributed to shifting the tax burden onto homeowners and Wisconsin’s working families.
As corporate tax contributions have declined, state government has reduced its support for the University of Wisconsin system, technical colleges and local governments. Services have been cut and residential property taxes, tuition and fees have increased.
Milwaukee's state aid has declined from 45% of the city’s budget in 1998 to 34% in 2006. To compensate residential property taxes have increased from 12% to 17% and non property tax revenue such as parking ticket fees and street parking permits from 21% to 30%.
MATC, the state’s flagship technical college, has seen its state aid decline from over 30% in 1990 to 14% in 2007. Students now contribute more to our technical colleges through their tuition and fees than the state does.
Corporations that use accounting gimmicks to avoid paying their taxes are shifting the burden of financing local government and educational services to homeowners, students, and other citizens. They are classic free riders, benefiting from these public goods, but refusing to pay their fair share.
Wisconsin's billion dollar plus structural deficit is, in part, the result of these tax avoidance schemes.
In response, state Senator Dave Hansen (D-Green Bay) has introduced the Corporate Tax Accountability Act (SB367) which would require publicly-held corporations to report their profits and tax contributions to the state. The legislation will affect less than 1% of Wisconsin’s companies, primarily large multi-state businesses like Wal-Mart and Merck.
Co-sponsors include nine senators and nineteen assembly representatives. Assembly Representative Phil Garthwaite (D-Dickeyville) plans to introduce an Assembly version.
This legislation will provide legislators with important information if they are to provide Wisconsin’s beleaguered taxpayers with real tax relief.
Wal-Mart has announced that it hasn't decided on how it will proceed in the aftermath of the North Carolina ruling, and declined to comment on the case's specifics due to a possible appeal. It continues to use REITS in Wisconsin.
Wednesday, August 29, 2007
Costco Takes the High Road to Grafton!
It's well know that poverty level wages subsidize Wal-Mart's low prices!
Wages are so low that Wal-Mart's employees qualified for $2.5 billion in federal assistance in 2004.
Earlier this week the Milwaukee Journal Sentinel reported Wal-Mart is also shortchanging Wisconsin, failing to pay over $17 million in state and local taxes between 1998-2000.
Wal-Mart’s tax avoiding schemes shift the burden for funding schools, fire protection, public health, infrastructure maintenance, workforce development and public safety to property tax paying homeowners.
The state is trying to recover its losses in court and Senators Robeson and Decker have introduced combined reporting legislation that would close the loophole Wal-Mart is using to avoid paying its fair share.
While that case unfolds, Milwaukee area consumers can use the power of the purse to send a message to Wal-Mart that we do not appreciate their tax dodging shenanigans, low pay and unfair labor practices.
There’s a new boy in town-Costco- that competes head to head with Wal-Marts’ Sam’s Club. In fact, Costco same store sales are growing faster than any other club shopper, 6.2% so far this year.
Maybe that’s because as the MJS reports: ”The employees seem more helpful at Costco.”
And why are Costco's employees more engaged? Perhaps because they average $17 an hour, while Wal-Marts’ average $10. And unlike Wal-mart’s employees, 92% of Costco employees can afford the company’s healthcare benefits.
Costco employees earn more because they have a union-the Teamsters that represents 13,800 of the company’s 127,000 employees. That’s only 17% of Costco’s total workforce. But union representation creates a ripple effect that helps set labor standards for all Costco employees.
Costco’ labor agreements lock in wage and benefits packages that are the highest in the grocery and discount retail industries. And Costco passes on similar compensation packages to its non-union workers.
Costco’s executive management recognizes that Wal-Mart/Sam's Club competes based on low prices and low wages-a low road corporate strategy. They recognize that in the labor market, like all markets, you get what you pay for. So Wal-Mart’s low wages attract less skilled and motivated employees. The result is low levels of service.
So while Costco’s prices are roughly equivalent, it competes on the basis of service and productivity. Costco attracts more skilled and dedicated employees by paying them fairly. The result is better service and higher productivity.
As Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”
Costco’s CFO Richard Galanti elaborated: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”
Henry Ford understood this a century ago.
Ford doubled his employees’ wages to $5 a day in an effort to solve a 300% absenteeism rate. Voola! Bad jobs turned into good ones and turnover plummeted. An added benefit was that Ford employees could actually buy the cars they produced.
A 2004 Business Week study compared Costco’s business model to Wal-Mart's. The study confirmed that Costco’s employees are more productive. They sell more: $795 of sales per square foot, versus only $516 at Sam’s Club. Consequently Costco generates more revenue per employee; U.S. operating profit per hourly employee was $13,647 at Costco versus $11,039 at Sam’s Club.
The study also revealed that Costco’s labor costs are actually lower than Wal-Mart’s as a percentage of sales.
By compensating its workers fairly, Costco enjoys rates of turnover far below industry norms, one-third the industry average of 65%. Wal-Mart's is about 50%.
High employee retention rates save Costco’s money. It costs $2,500 to $3,000 per worker to recruit, interview, test and train a new hire, even in retail. Wal-Mart’s turnover rate cost the firm an extra $1.5 to $2 million in costs each year.
Of course, other factors besides low turnover and employee productivity are responsible for Costco’s cost advantage. For example, Costco saves millions because it does not advertise.
Costco can also afford to pay more because it cuts the fat from executive paychecks. Its overall corporate philosophy is that workers deserve a fair share of the profits they help generate — not just a pat on the back or being called “associate.”
While CEOs at other major corporations average 531 times the pay of their hourly employees, Sinegal takes only 10 times the pay of his typical employee. His annual salary (2004) was $350,000, compared to $5.3 million awarded to Wal-Mart’s Lee Scott.
After California Costco Teamsters ratified a contract a few years ago, CEO Jim Sinegal said Costco workers are “entitled to buy homes and live in reasonably nice neighborhoods and send their children to school.”
Costco's high road strategy including union representation, decent pay and fair treatment leads to better service, increased employee productivity and loyalty.
Costco has now opened in Grafton. Its entry into the Milwaukee market poses a question to all of us-do we want to live in a country where the largest employer pays below poverty-level wages and cheats on its taxes? Or, do we want Americans to enjoy a decent income and a sense of security in return for their work?
If you believe the latter, take a trip out to Grafton and let your money do your talking.
Wages are so low that Wal-Mart's employees qualified for $2.5 billion in federal assistance in 2004.
Earlier this week the Milwaukee Journal Sentinel reported Wal-Mart is also shortchanging Wisconsin, failing to pay over $17 million in state and local taxes between 1998-2000.
Wal-Mart’s tax avoiding schemes shift the burden for funding schools, fire protection, public health, infrastructure maintenance, workforce development and public safety to property tax paying homeowners.
The state is trying to recover its losses in court and Senators Robeson and Decker have introduced combined reporting legislation that would close the loophole Wal-Mart is using to avoid paying its fair share.
While that case unfolds, Milwaukee area consumers can use the power of the purse to send a message to Wal-Mart that we do not appreciate their tax dodging shenanigans, low pay and unfair labor practices.
There’s a new boy in town-Costco- that competes head to head with Wal-Marts’ Sam’s Club. In fact, Costco same store sales are growing faster than any other club shopper, 6.2% so far this year.
Maybe that’s because as the MJS reports: ”The employees seem more helpful at Costco.”
And why are Costco's employees more engaged? Perhaps because they average $17 an hour, while Wal-Marts’ average $10. And unlike Wal-mart’s employees, 92% of Costco employees can afford the company’s healthcare benefits.
Costco employees earn more because they have a union-the Teamsters that represents 13,800 of the company’s 127,000 employees. That’s only 17% of Costco’s total workforce. But union representation creates a ripple effect that helps set labor standards for all Costco employees.
Costco’ labor agreements lock in wage and benefits packages that are the highest in the grocery and discount retail industries. And Costco passes on similar compensation packages to its non-union workers.
Costco’s executive management recognizes that Wal-Mart/Sam's Club competes based on low prices and low wages-a low road corporate strategy. They recognize that in the labor market, like all markets, you get what you pay for. So Wal-Mart’s low wages attract less skilled and motivated employees. The result is low levels of service.
So while Costco’s prices are roughly equivalent, it competes on the basis of service and productivity. Costco attracts more skilled and dedicated employees by paying them fairly. The result is better service and higher productivity.
As Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”
Costco’s CFO Richard Galanti elaborated: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”
Henry Ford understood this a century ago.
Ford doubled his employees’ wages to $5 a day in an effort to solve a 300% absenteeism rate. Voola! Bad jobs turned into good ones and turnover plummeted. An added benefit was that Ford employees could actually buy the cars they produced.
A 2004 Business Week study compared Costco’s business model to Wal-Mart's. The study confirmed that Costco’s employees are more productive. They sell more: $795 of sales per square foot, versus only $516 at Sam’s Club. Consequently Costco generates more revenue per employee; U.S. operating profit per hourly employee was $13,647 at Costco versus $11,039 at Sam’s Club.
The study also revealed that Costco’s labor costs are actually lower than Wal-Mart’s as a percentage of sales.
By compensating its workers fairly, Costco enjoys rates of turnover far below industry norms, one-third the industry average of 65%. Wal-Mart's is about 50%.
High employee retention rates save Costco’s money. It costs $2,500 to $3,000 per worker to recruit, interview, test and train a new hire, even in retail. Wal-Mart’s turnover rate cost the firm an extra $1.5 to $2 million in costs each year.
Of course, other factors besides low turnover and employee productivity are responsible for Costco’s cost advantage. For example, Costco saves millions because it does not advertise.
Costco can also afford to pay more because it cuts the fat from executive paychecks. Its overall corporate philosophy is that workers deserve a fair share of the profits they help generate — not just a pat on the back or being called “associate.”
While CEOs at other major corporations average 531 times the pay of their hourly employees, Sinegal takes only 10 times the pay of his typical employee. His annual salary (2004) was $350,000, compared to $5.3 million awarded to Wal-Mart’s Lee Scott.
After California Costco Teamsters ratified a contract a few years ago, CEO Jim Sinegal said Costco workers are “entitled to buy homes and live in reasonably nice neighborhoods and send their children to school.”
Costco's high road strategy including union representation, decent pay and fair treatment leads to better service, increased employee productivity and loyalty.
Costco has now opened in Grafton. Its entry into the Milwaukee market poses a question to all of us-do we want to live in a country where the largest employer pays below poverty-level wages and cheats on its taxes? Or, do we want Americans to enjoy a decent income and a sense of security in return for their work?
If you believe the latter, take a trip out to Grafton and let your money do your talking.
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