Wal*Mart complains about taxes at the same time they are enjoying a lower tax rate

[BlueStreak]

See http://www.forbes.com/sites/kellyphillipserb/2013/05/16/walmart-blames-sluggish-sales-on-taxes-enjoys-lower-effective-tax-rate/

OK, the headline is a little misleading. Wal*Mart pointed to taxes issues as being a factor in reduced sales. They talked slow processing of returns leaving less money in customers' pockets, and they talked about the end of the payroll tax holiday as being another factor giving their customers less spending money. Fair enough.

Then, as if completely oblivious to the connection, they bragged about shaving a couple of percent off their effective tax rate, which is 31% now. 31% may seem like a high number, but remember that is only 2% of sales because businesses can deduct just about any expense they pay.

This is a very clear illustration of the consequences of this 30-year campaign to shift taxation from businesses to individuals. Before Reagan was President, businesses accounted for 30-some percent of the total Federal tax revenue. Today, their share is under 10%. Who is paying the difference? Individuals are paying most of the difference through higher taxes and fees everywhere you look. And the rest is just being loaded onto the national debt.

Henry Ford said that he wanted to pay his workers fairly because he understood it was workers who would buy his Model Ts, and to do that, they needed money to spend. Today's businesses seem completely oblivious to the simple truth that was so clear to Henry Ford. And here you see it all in one news article -- all in one press conference, and I bet there wasn't a single question asking about the connection between shifting taxes from businesses to individuals and the loss of sales.

[onehandle]

1. 20+ years of not even walking into a Walmart.

I know that some people have no choice.

I take up the slack for you. Don't worry.

[BlueStreak]

2. And I'm not picking on Wal*Mart (today). They are just dong what every big business does.

This modern era of MBAs all seem to think alike. All they can see is the money that is within arm's reach and their natural instinct is to fight like dogs to grab every penny. Wal*Mart is no different philosophically from any other. The only difference is that they may have been more successful.

The point is that they all talk endlessly about "maximizing shareholder value" but none of them seems to recognize that is not possible if you are grinding your customers (and employees) into the ground at the same time.

Businesses need paying customers. This seems so simple, but how many big businesses today actually get that?

As far as Wal*Mart (and any other big business) is concerned, it is somebody else's job to make sure their customers have money to spend. Wal*Marts job is to grab every penny and give it to the Walton heirs.