Walgreens HQ Goes To Switzerland?

[CarlV]

A little less than two years ago, Gregory D. Wasson, the chief executive of Walgreen, sought a series of tax breaks from Illinois, where his company is based.

“We are proud of our Illinois heritage,” he said at the time. “Just as our stores and pharmacies are health and daily living anchors for the communities we serve, we as a company are now recommitted to serving as an economic anchor for northeastern Illinois.”

The state gave Walgreen $46 million in corporate income tax credits over 10 years in exchange for a pledge to create 500 jobs and invest in upgrading its offices. The state also provided $625,000 in training money and $875,000 in other tax incentives.

Mr. Wasson’s actions, however, could soon run counter to his words. The same chief executive who said he was so “proud of our Illinois heritage” is now considering moving the company’s headquarters to Switzerland as part of a merger with Alliance Boots, a European drugstore chain.

Why? To lower Walgreen’s tax bill even further.

Alarmingly, dozens of large United States companies are contemplating the increasingly popular tax-skirting tactic known as an inversion. Under the strategy, companies merge with foreign rivals in countries with lower tax rates and then reincorporate there while still enjoying the benefits of doing a large part of their business in the United States. AbbVie, a drug company spun off from Abbott Laboratories, is in talks to merge with its rival Shire, based in Ireland, Europe’s equivalent of a tax haven. Medtronic announced plans to merge with Covidien, also based in Ireland. Similarly, Pfizer sought to buy AstraZeneca, based in Britain, where the tax rate is lower than it is in the United States, but AstraZeneca’s board rejected that offer.

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According to Americans for Tax Fairness, a move by Walgreen to Switzerland would most likely cost United States taxpayers about $4 billion over five years. Illinois taxpayers would also be hurt. The company’s tax rate would be cut to 20 percent as part of Alliance Boots from about 31 percent now. Interestingly, Alliance Boots, which was originally based in Britain, moved to Switzerland in 2008 in large part to lower its tax rate.

Lots more:
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Carl

[Oerets]

Tax dodge plain and simple. Tax code needs to be changed to any profits earned in the US pay US taxes. Fat chance with the GOP and big money financing elections unchecked now.



Barney

[finnbow]

Actually, we need to fix our corporate tax code. These companies are making legal business decisions and our clusterf*ck of tax laws makes is making this practice all too common. Much of our medical device industry does a lot of its work in Ireland and Medtronic just did exactly as the article describes.

[bobabode]

Meanwhile the IRS is underfunded below 2010 levels while at the same time the workload has increased due to the ACA and other laws mandated by congress. Now, which party is responsible for that and what could their motives be?

[donquixote99]

Lot of overdue reforms piling up while the congress is immobilized....

[MrPots]

I'd like to get a web site going and marketed that list bad corporate citizens. Corporations who want the benefits of profiting in this country buy want nothing to do with chipping in to maintain it. Companies that make record profits but pay minimum wage to it's employees. Companies who suck off the taxpayer teat through corporate welfare while raking in profits. Companies who just plain cheat their customers. And companies who willingly pollute our environment.

[Dondilion]

Modern capitalism can easily be described as international capitalism.

[merrylander]

Originally Posted by MrPots

I'd like to get a web site going and marketed that list bad corporate citizens. Corporations who want the benefits of profiting in this country buy want nothing to do with chipping in to maintain it. Companies that make record profits but pay minimum wage to it's employees. Companies who suck off the taxpayer teat through corporate welfare while raking in profits. Companies who just plain cheat their customers. And companies who willingly pollute our environment.

Wouldn't it be quicker just to list the ones who are good citizens.