Principled Profit: The Good Business Blog

Musings on the world-wide movement for ethical business, frugal marketing, and how honesty, integrity, and quality combine with deep relationship building to create business success. By the originator of the Ethical Business Pledge campaign and award-winning author of Principled Profit: Marketing That Puts People First and five other books

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Monday, October 15, 2007

Another Wal-Mart Scandal: Property Taxes

Yes, Wal-Mart is the company I love to hate. Yes, even I said marvelous things about W-M in the aftermath of Katrina, and I respect that it has taken a leadership role on organic food and green energy–though not necessarily the way it’s going about those worthwhile endeavors (that’s a subject for another time).

Back in August, 2005, I summed up some of my objections:

I consider Wal-Mart a predatory company. Its supplier policies (demanding 10 percent reductions in contract costs every year, as I understand it) are largely responsible for the wave of outsourcing that has cost thousands of Americans good jobs–and for the severely substandard working conditions that prevail in many of those foreign sweatshops. Its employees subsist on wages so low that many of them are also on government assistance–a quiet subsidy from the United States to the world’s largest retailer, despite it huge profits. When workers in the meat department of one store in Ontario, Canada formed a union, the company closed the entire store rather than recognize the bargaining unit. And the company’s steamroller tactics in bringing in new stores where they’re not wanted and then abandoning many of them after a few years do not make it a good neighbor, in my opinion.

Of course, in the last few months, we’ve become painfuly aware that Wal-Mart and other companies’ reliance on foreign sweatshops may have health and safety consequences for Americans who end up with tainted toothpaste or whatever else China feels like slipping into its exports.

Well, here’s a new Wal-Mart scandal. A group called Good Jobs First has just released a study showing that Wal-Mart systematically attempts to chisel down its property tax assessments. The efforts are based out of corporate headquarters, and have been charted to 36.3 percent of all locations. In other words, Wal-Mart has tried to get its taxes lowered by lowering its claimed property value in more than one in three of it locations. Total amount saved on taxes, even though the company loses more of these fights than it wins: $28.8 million.

We sholldn’t be surprised. After all, this is the same company that has a very clear history of hiring part-timers and keeping them just under the benefit level, so the government essentially subsidizes the health insurance costs the company doesn’t have to pick up. I’d stop shopping there, except that I already don’t shop there.

Remember this next time your kids’ elementary school (funded, in most communities, by property taxes) has to lay off teachers or cut programs.


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