Allen B. West

Federal judge rules on special Wal-Mart tax; liberals are FUMING

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What is it with the left’s disdain for Wal-Mart?

I’m aware of all the charges — they pay low wages, offer poor benefits and hours, etc. — but if those are really their concerns there are hundreds of thousands of other businesses they should be going after. Besides, Wal-Mart is only profiting a mere 3 cents on the dollar of what they sell. It’s not like there’s much of a buffer if they were to raise wages.

Washington D.C. legally requires stores like Wal-Mart to pay at least 50 percent above the district’s minimum wage – effectively making it impossible for them to enter such markets.

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Another politically-motivated attempt to keep Wal-Mart out was made explicitly clear in Puerto Rico, where a law was introduced to effectively tax the company at a rate three times higher than other companies. The tax is applied to companies with revenues over $2.75 billion – and Wal-Mart is the only company on the island that even comes close.

Sound unconstitutional? As reported by the Daily Signal, Wal-Mart Puerto Rico sued the island, and a Federal District Court ruled the tax unconstitutional.

While Governor Garcia Padilla suggested the decision took $100 million away from the people of Puerto Rico and gave it to Wal-Mart, the decision had the exact opposite effect—a ruling against Wal-Mart would have done far more damage to Puerto Rico and Puerto Ricans.

Wal-Mart operates 48 stores across Puerto Rico, employs about 14,300 people (second only to the Puerto Rican government), pays its workers a minimum of $10 per hour—well above both the minimum ($7.25 an hour) and median ($9.42 an hour) wages in Puerto Rico—purchases about $1.6 billion’s worth of products from local vendors and suppliers, and currently pays about $40 million in income taxes to the Puerto Rican government.

Losing Wal-Mart would be a devastating blow to the struggling Puerto Rican economy—much more so than the alleged $100 million in lost tax revenues. But that’s precisely what the tax would do—drive the retailer off the island.

According to Wal-Mart officials, the tax would have resulted in an effective tax rate of 91.5 percent of net income, with the company paying 114 percent of its island profits in taxes.

Companies that don’t make profits can’t stay in business, and Wal-Mart noted that it would not be able to maintain its Puerto Rico operations for long under the tax.

Fortunately for the people of Puerto Rico who receive jobs, low-priced goods, and a market to sell their products, this unconstitutional tax will not drive Wal-Mart out of Puerto Rico.

The liberals in Washington D.C. are able to keep Wal-Mart out by creating what’s essentially a “Wal-Mart Minimum Wage,” and those in Puerto Rico (unsuccessfully) tried to keep them out through excessive taxation. I suppose that’s the only time you can get liberals to acknowledge that the minimum wage and high taxes kill jobs.

[Note: This post was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]

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