Four members of the Walton family, heirs to Sam Walton's Wal-Mart fortune, are collectively worth more than $100 billion— more wealth than the entire bottom 40% of Americans. They are doing everything in their power not to give up a penny more than they have to.
The Waltons are the richest family in the world. They are the new Rockefellers, the modern synonym for "vast wealth." And indeed, income inequality in America has reached levels not seen since John D. Rockefeller roamed the earth. The Waltons are the kings and queens of our new Gilded Age.
Reasonable people, I suppose, can disagree on the morality of amassing such mind-boggling wealth. What most reasonable people would agree on, I think—what we would regard as basic human decency and common sense—is that it is not healthy for such great wealth to exist in perpetuity, passed down from generation to generation endlessly, creating ever-larger dynasties, until America is even more of an unequal plutocracy with unequal opportunity than it already is. This is why estate taxes exist. We have agreed, as a society, that at least some of these huge piles of wealth should be put back into the public coffers when their rich owners die. Not all of the wealth; not even most of the wealth; just enough to get some back in circulation, for the good of everyone, and to try to do something to slow down the creation of personal billionaire kingdoms.
Quite a few billionaires, including Warren Buffett and Bill Gates, have pledged to give away almost all of their fortunes to charity. The Waltons take a different approach. They have decided to hoard as much of their fortunes as possible. They have decided to use each and every tax loophole possible in order to keep their money in their own family, and not to allow the public to claim a single dollar more in taxes than they absolutely have to. In Bloomberg today, Zachary Mider has an excellent in-depth report today on the strategies the Walton family uses to avoid estate and inheritance taxes on their fortune, which has been built on the backs of extremely low-paid workers. One of their favorite techniques: establishing a type of charitable trust that can shelter money from taxes, and later put that money back into the pockets of family heirs. Sometimes, with a profit!
If the trust’s investments outperform that benchmark rate, then the extra earnings pass to the designated heirs free of any estate tax...
With a big enough spread between the actual performance and the IRS rate, a Jackie O. trust can theoretically save so much tax that it leaves a family richer than if it hadn’t given a dime to charity...
“This time in history is probably going to go down as a unique opportunity” to “transfer assets out of an estate at the lowest cost,” said Charles J. McLucas, president of Charitable Trust Administrators Inc. in Tustin, California.
So the next time you hear about how fabulous the Walton family's opulent new art museum is, or how much money the Walton family has given to land conservation, remember that all of that charity is part and parcel of a structure designed expressly to hoard billions of dollars within this one single family, and to avoid paying the normal tax rates that have been levied for the purpose of a tiny step towards equality. And also remember that all of the millions and millions of workers who made those billions and billions of dollars possible are trapped in a world of low wages, and are prevented from unionizing and bettering their own situation by the zealous efforts of Wal-Mart.
The Walton family's very existence is an insult to the American dream.
[Bloomberg. Photo: AP]