How Walmart's Owners Give Thanks and Give Back
Workers at Walmart used the Black Friday shopping rush to elevate their demands to receive a living wage from the nation's largest employer and retailer. Among the protesters are 12 who gave up their Thanksgiving feasts and instead went on a 24-hour fast.
But while many Walmart workers and their supporters are making great sacrifices--and taking great risks--to stir its corporate conscience, the family that owns the retailing giant is giving back almost nothing at all.
By 2010, the wealth of Sam Walton's six heirs was equivalent to that of 41 percent of all American households--over 48 million of them--combined. Yet those six siblings combined have contributed a minuscule $59 million--just 0.04 percent of their total wealth--to the foundation that bears their name.
That's the shocking conclusion of an analysis from Walmart 1 Percent, a project of the union-backed Making Change at Walmart:
The central finding of this report is simple: Our analysis of 23 years' worth of the Walton Family Foundation's tax returns shows that Rob, Jim, Alice and Christy Walton--the second generation Walmart heirs--have contributed almost none of their personal fortune to the foundation which bears their family name.
As it turns out, the first generation led by patriarch Sam Walton put $4.7 billion into the foundation, a figure which represents 98.8 percent of all family donations over the past 23 years. The six Scrooges of the second Walton generation ponied up only 1.2 percent. Alice Walton, one of the faces of Mitt Romney's 2012 SuperPAC, has given zero. With over $2 billion in assets, the Walton Family Foundation distributed $325 million in 2013. Those dollars went overwhelmingly to their stomping grounds in northwest Arkansas, funding environmental improvements, pet educations reforms including charters schools and vouchers and, as Forbes reports, "Alice Walton's stunning Crystal Bridges Museum of American Art."
To be sure, the Crystal Bridges Museum in Bentonville and its educational programs for poor children are impressive. The $1.2 billion complex and its $500 million collection of American art are world class. But Alice Walton's hobby was made possible by what Forbes previously described as the "tax-minimizing Walton Family Foundation." Nevertheless, in a fawning October 2013 profile NBC News' Harry Smith said of America's richest art collector, "the little girl who used to catch crawdads in a Bentonville creek" is giving back. As she put it:
"I remember what my mom told me. She'd say, 'You know Alice, if you give the thing you love most, you will be giving the right gift.'"
But the thing Alice Walton really loves the most--and the thing American taxpayers for sure need most--is money. And that she has no intention of giving.
For starters, for decades the Waltons have relied on a tax dodge which now bears their name to keep billions of dollars from Uncle Sam. The Walton grantor-retained annuity trust, or "Walton GRAT," has allowed billionaires like the Walmart heirs and casino mogul and GOP bag man Sheldon Adelson to shield $100 billion from the IRS since 2000. Named after the tactic lawyer Richard Covey developed for Sam Walton:
GRATs work by rapidly shifting large volumes of stock into a trust fund that is legally required to return that initial investment after two years. The stocks in the trust gain enough value that when it comes time to repay the initial investment there is a substantial amount of stock left over that can be transferred on to some third party without triggering the gift tax.
As far back as 1953 when his Walmart five-and-dime business was in its infancy, "Sam Walton started arranging his affairs to avoid a potential estate tax bill." At the time, his oldest child was 9 years old. "That year, he gave a 20 percent stake in the family business to each of his children, keeping 20 percent for himself and his wife." As Sam put it in his autobiography:
"The best way to reduce paying estate taxes is to give your assets away before they appreciate."
As it turns out, his daughter Alice Walton has even better way: Get rid of the estate tax altogether.
With their combined wealth now estimated at $139.9 billion dollars, on paper zeroing out the 40 percent state tax would allow the Waltons to redirect roughly $56 billion from the United States Treasury into the accounts of their heirs. (Because of tax avoidance techniques used by the very rich, the effective estate tax rate is closer to 17 percent.) All those zeroes explain why Alice Walton had been trying to kill the estate tax for years. As USA Today summed it up in 2005:
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.
The Waltons have joined a coterie of wealthy families trying to save fortunes through permanent repeal of the estate tax, government watchdogs say. The election of President Bush and more conservatives to Congress gave momentum to the long-fought effort. The Waltons add more.
That was before the Walton joined Mitt Romney's billionaire SuperPAC-Men dedicated to doing away with the estate tax once and for all. And that was before the Great Recession savaged the finances of working Americans while making Walmart and the Walton clan much richer still.
As labor economist Sylvia Allegretto of the University of California and Josh Bivens of the Economic Policy Institute documented in 2012, the Fed's Survey of Consumer Finances (SCF) showed that the crippling recession which began five years earlier had been a bonanza for the Walton Six. Between 2007 and 2010, the wealth of the Walton family members jumped from $73.3 billion to $89.5 billion even as median family wealth fell by 38.8 percent. The result?
In 2007, it was reported that the Walton family wealth was as large as the bottom 35 million families in the wealth distribution combined, or 30.5 percent of all American families.
And in 2010, as the Walton's wealth has risen and most other Americans' wealth declined, it is now the case that the Walton family wealth is as large as the bottom 48.8 million families in the wealth distribution (constituting 41.5 percent of all American families) combined.
Thanks to the stock market boom under President Obama, the Waltons' wealth continues its rise into the stratosphere.
Now, there is nothing wrong with Alice Walton using some of her vast fortune to create a free art museum for "the people who have not been comfortable." But given the facts that (a) the rich give a much smaller share to charity than the less-well-off; (b) the wealthy pocket the lion's share of the federal charitable tax deduction, and; (c) "last year, not one of the top 50 individual charitable gifts went to a social-service organization or to a charity that principally serves the poor and the dispossessed," it's only natural for Americans to ask why their tax code so heavily subsidizes Walton's Crystal Bridges. As for the estate tax so despised by Alice Walton and her ilk, analyses consistently show that higher rates not only generate more tax revenue but encourage greater charitable giving.
For its part, the Walton Family Foundation has defended the record of largesse from Sam's kinfolk at Walmart:
"Since 1987, the Walton family has contributed more than $5 billion to charitable organizations and causes. Family members living and deceased have provided generously for the foundation. The family has planned for the continued growth of the foundation and intends for grant making to progressively increase over time."
Thanksgiving 2014 would have been a good time to start. Earlier this year, the New York Times reported that at least eight senior executives have left the company since an investigation was launched to probe allegations of massive bribery in Mexico and other foreign markets. Already shaken by previous revelations that low-wage workers at the nation's largest employer require $6.2 billion a year from U.S. taxpayers for food stamps, Medicaid, housing subsidies and other public assistance, Walmart was buffeted by a new report from the Institute for Policy Studies showing that its top eight executives ducked $104 million in taxes just since 2009.
But instead of opening their hearts and wallets, the Walton family will mark Black Friday by staying true to Walmart's corporate mantra. Screw workers. Live better.