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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsNew Report Suggests Walmart Heirs’ Foundation Is A Massive Tax Dodge
http://www.liberalamerica.org/2014/06/24/new-report-suggests-walmart-heirs-foundation-is-a-massive-tax-dodge/Walmart 1 Percent, a project of Making Change At Walmart, examined 23 years of tax returns from the Walton Family Foundation, which holds itself out as being interested in improving K-12 education, conservation and improving the quality of life in northwest Arkansas. An analysis of 23 years of foundation tax returns revealed that Sam Waltons heirs only gave only 0.04 percent of their combined net worth to their own foundationnot even a fraction of what other wealthy Americans give to charity.
Read the full report here or the executive summary here.
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But wait a minute! The Walton Family Foundation has over $2 billion in the bank, and has spent $3.5 billion on the causes it supports. So where does that money come from? According to the report, over 60 percent of the contributions come from 21 trusts set up by Helen Walton, her estate and John Waltons estate. These trusts, called charitable lead annuity trusts, take advantage of a loophole in the tax code. A portion of the income earned by these trusts, which were worth $8.8 billion in 2012, must go to the Walton Family Foundation for the life of the trusts. When the trusts expire, their beneficiariesusually the donors heirsreceive any underlying assets plus leftover income from the trusts tax-free. By at least one estimate, this will allow Sams children and grandchildren to save $3 billion in estate taxes.
To be fair, this tax dodge has been used by several billionaires, which led former Treasury Secretary Larry Summers to cite it as proof that our estate tax system is broken. However, given that the Waltons sit on a family fortune worth over $139.9 billionmore than either they or their kids will ever spendtheir use of this tactic is particularly obscene.
PoliticAverse
(26,366 posts)Anansi1171
(793 posts)SoCalDem
(103,856 posts)They start a "charitable foundation" with great flourish and media attention.. They receive pats of the back and kudos for their benevolence, and at first they often DO donate to worthwhile causes, but how many of them end up being a vehicle for fancy parties, where guests pay huge amounts to get invited, and then write big checks (which are, of course tax-deductions for them)...they wine & dine & get press coverage..take their write offs and move on to the next event.
The people who run the foundation have their clever accountants who carefully craft their donations for maximum effect (political/press coverage/etc) and the rest of course stays IN the foundation. Whoever is in charge also takes a hefty FEE to manage/maintain the foundation..and no doubt, has the accountant figure ways so they are not taxed on those fees..
For the rich, it's a big win-win..and they get to "support" their favorite things/causes....get paid to do it..and host fantastic parties..
If you are lucky enough to be on the list of their "favorite things", you may get a few crumbs...