Wal-Mart Goes After Estate Tax
Although much has been made of Wal-Mart's new PR offensive to fluff up its public image, relatively little attention has been given to Wal-Mart's new bid to be a political player. USA Today's "Money" section has the story today:
[I]n a little-noticed move, the company's founding family has plunged into a fight to pass income tax changes and other legislation that could preserve its grip on the USA's biggest business and the family's $84 billion fortune.
Led by Sam Walton's only daughter, Alice, the family spent $3.2 million on lobbying, conservative causes and candidates for last year's federal elections. That's more than double what it spent in the previous two elections combined, public documents show.
Although the family billionaires deny it, the Wal-Mart clan's biggest interest seems to be in ditching the estate tax -- an issue near and dear to their hearts (and wallets):
The Walton support for Bush and other fiscal conservatives assumed new urgency last month when Wal-Mart sweetened its dividend - boosting Walton dividend income above $1 billion a year. Bush's dividend tax cut, enacted two years ago and set to expire in 2009, will save the family as much as $51 million this year.
[I]t is in the bitter fight over federal estate taxes that the family and Wal-Mart have the most at stake. The tax, now collected on estates worth more than $1.5 million, could force the Waltons to sell a chunk of Wal-Mart to pay billions in taxes when family members die. The top tax rate this year is 47%.
Wal-Mart's massive infusion of money into the campaign to kill the estate tax just might tip the balance:
The clock is ticking louder in the estate tax battle, with attention focused on Jan. 1, 2011, when the tax reverts to higher levels in place before Bush won approval of a gradual reduction, culminating in its repeal entirely for 2010.
The Waltons and a coalition including the influential National Federation of Independent Business support Bush's push for the tax's permanent repeal, government watchdogs say.
"We think we're closer than we've ever been," says lobbyist Dena Battle at NFIB, the small-business trade group that's tried for years to kill the tax.
Question: if we get rid of the estate tax, how will government pay for the public assistance programs Wal-Mart employees are forced to use because of the company's lack of benefits and low wages?
Chris Kromm is executive director of the Institute for Southern Studies and publisher of the Institute's online magazine, Facing South.