On Monday, Walmart announced that it is moving up the payment date on its next quarterly dividends to shareholders from early 2013 to the tail end of 2012, citing concerns about the fiscal cliff. The New York Times reports that many business owners and investors are maneuvering to avoid higher taxes next year, and Reuters points out that Walmart is the biggest company so far to move its planned dividends earlier.
Walmart has the distinction of being partially owned by the country’s wealthiest family—the Waltons—who are set to receive over $2.7 billion in dividends from the company this year alone. Three members of the Walton family sit on the company’s board of directors: chairman Rob Walton; his brother, Jim Walton; and his son-in-law, Greg Penner. Their family owns about half of Walmart, and as the company’s largest shareholders, they’re also the ones with the most to gain (or taxes to avoid paying) from the dividend schedule change. Next month, the Waltons will get an estimated $677,767,820 in dividends.
The 2003 Bush tax cuts applied to capital gains and dividends, and mostly affect high-income taxpayers. Now, Reuters explains, “Without action from Congress, the dividend tax rate will rise to the ordinary income tax rates, as high as 39.6 percent for top earners. Dividends are now taxed at 15 percent for the top four brackets and zero at the bottom.”
Interestingly, Walmart’s move to help shareholders avoid increased taxes comes the week after CEO Mike Duke met with President Obama and other business leaders to discuss a debt deal. After the meeting, Duke issued a statement calling on lawmakers to work together on an approach to avoid the fiscal cliff including raising additional revenue, among other reforms. Looks none of that revenue will come from additional taxes on Walmart’s next dividend payout of $1.34 billion.