Walmart has been in the spotlight for years regarding infamous low wages and limited benefits, but a new report reveals that the extractive business practices of the world’s largest employer do not end there. A report released by Americans for Tax Fairness found that Walmart has set up 78 international subsidiaries that are used as tax havens to hold 76 billion dollars in assets.

The use of tax havens allows Walmart to dodge their taxes by shifting profits generated in the U.S. to countries with lower corporate tax rates. Luxembourg, for example, is home to 22 Walmart subsidiaries but not a single retail store. Since 2011 Walmart has shifted over 45 billion dollars in assets to Luxembourg where profits are taxed at less than 1 percent.


At 3 Squares Cafe our commitment to our community doesn’t stop at meeting our tax obligations. We hire new employees at a minimum wage of 10 dollars an hour and offer paid sick and vacation time. These are the kind of investments that yield an immediate return. These policies allow us to attract talented upstart chefs and service team members that help us to provide the best quality food and service to our customers.

Small businesses like mine are being squeezed by tax policies written for the upper echelon. Even though our revenue sheets look much different than that of the retail giant, we are forced to supplement the income of their employees and absorb a larger share of the tax responsibility. Walmart keeps their average worker’s wages so low that they depend on government assistance programs to make ends meet. These assistance programs are funded by the very taxes they elaborately avoid.

Companies like Walmart are buying goods manufactured by low wage workers in China, shipping them to the U.S., and paying low wage American workers to sell them to the middle class. Then, rather than investing the revenue back into their workers or their community they reinvest profits outside of the country where taxes are low. Walmart is able to “roll back” prices by rolling over the U.S. economy.

What’s most frustrating is that Walmart’s practices are perfectly legal. The high priced legal teams employed by major corporations are able to take advantage of vaguely written laws regarding the corporate structure. This allows corporations to use shell companies to move funds around and evade their tax responsibility in ways that small businesses would never attempt.

Politicians on both sides of the aisle need to focus on reforming the corporate tax structure to close the loopholes allowing these practices. Whether they are paid to look the other way or are simply not paying attention, the ripple effect these practices have on small businesses is clear. When companies like Walmart find ways to game the system someone has to pay for it and that burden falls on small business owners.

The message should be clear; Taxes are a responsibility and a cost of doing business in America. That cost disproportionately affects small businesses when companies like Walmart manipulate the system and fail to pay their fair share. Evasive tax practices allow multinational corporations to shift the responsibility off Wall St. and onto Main St.  Highly profitable companies like Walmart should make their investments here at home and stop relying on small businesses to supplement their payroll and pave the roads that lead to their 5,000+ US locations.

Birong is the owner of 3 Squares Café in Vergennes, Vermont and is a member of the Main Street Alliance of Vermont. The Main Street Alliance is a national network of small business owners working to create a new voice for small businesses on important public policy issues.