This week, Wal-Mart Puerto Rico, Inc. filed a lawsuit against the Commonwealth of Puerto Rico in an effort to overturn a tax law known as Act 72, which Walmart says is discriminatory, and violates federal laws and the U.S. Constitution. The case is Wal-Mart Puerto Rico Inc. v. Zaragoza-Gomez, 15-cv-3018, U.S. District Court, District of Puerto Rico (San Juan).
According to the complaint, Wal-Mart PR operates 55 Walmart Stores, Sam’s Clubs, Supercenters, Super Ahorros, and Amigos stores in Puerto Rico, which collectively produce an annual net income of $49,450,000. The complaint further alleges that Act 72 will tax away 91% of this net income, or roughly $45 million.
According to the complaint, this tax rate is triple what Walmart is paying around the world.
On the face of it, Walmart has a reasonable point. However, I do have one question:
Are we really to believe that 55 Walmart, Sam’s Club, Super Ahorros and Amigos stores each generate only $900,000 in profit per store?
In other words, each of these stores is making less than $2,420 per day in profit?
Pres. Harry Truman once said, “There are lies, damn lies, and then there’s statistics.” This statistic does not pass the smell test.
I would like to see Walmart prove that each of its superstores makes less than $2,420 per day in profits.
The only accountant who could prove that, is named the Great Houdini.
And Houdini is dead.
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