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Walgreens is planning to become Swiss to avoid paying taxes:

Walgreens:Tax dodger

2 days ago, I wrote a short diary about possibly using Medicare's buying power to stop these tax evaders. Should have known that someone more knowledgable and thoughtful had noticed that these corporations get rich on payments from our tax dollars!

Update: WaPo Op-ed by SecTreas Lew on the urgency of dealing with the inversion loophole:
WaPo Op Ed
More below.

Walgreens is a poster child for wanting all the US government business, but none of the citizen obligation:

It will also become inversion’s most shameless exploiter: nearly a quarter of the company’s revenues come from Medicare and Medicaid, and its profits soared by 68 percent when Obamacare brought it new customers last quarter.
There's a state tax interest also:
The Illinois General Assembly in 2012 even agreed to give Walgreens $46 million in tax credits over 10 years.
And yes, this is a big deal:
Instead, Walgreens is poised to take our money and run, leaving everyday taxpayers holding the bill. According to a study by Americans for Fair Taxes and Change to Win Retail Initiatives, a Walgreens inversion could cost U.S. taxpayers more than $4 billion over the first 5 years. That’s enough to fund 1.5 years’ prescriptions for all VA veterans, 639,000 new Medicaid enrollments, or 3.5 million new youth enrollments under the Children’s Health Insurance Program.
This loophole needs to get closed immediately, or Medicare needs to suggest that it might change the rules to insist that prescriptions get filled through American pharmacies.
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Comment Preferences

  •  Tip Jar (10+ / 0-)

    "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody gets busy on the proof.” ― John Kenneth Galbraith

    by Urban Owl on Sun Jul 27, 2014 at 06:14:04 AM PDT

  •  Tax avoidance is legal, moral, and rational (0+ / 0-)

    The only way the Republicans will agree to close the loophole is if corporations get a big tax cut.  So either through inversion or a tax cut, corporations like Walgreens will end up paying less in taxes.

    Walgreens is simply being rational, avoiding taxes through a provision in the law, same as you or I would do if we could pay less in taxes by making a post office mail box our new address.

    •  sorry, might be legal... (3+ / 0-)
      Recommended by:
      Urban Owl, kurt, JeffW

      ...but it certainly isn't moral to not pay your fair share. As for rational, the consequences of current tax regulations on the middle class would call into question whether destroying your customer base is rational in the long-term.

      And lets face it, all these tax dodges are only available to the rich and powerful so the argument that we'd all do it if we could is pure fantasy because the powers that be will never allow a level playing field.

    •  Under current law & regulations, legal (1+ / 0-)
      Recommended by:

      But both can be changed.

      The current rule is rational, only because we have set up a system that rewards very short term gains, again, something that has not always been true and can be changed.

      Moral? You might think so, but you do not present any reasons. And obviously, others hold other opinions.

      We have Buy American rules for many grants and purchases using Federal funds; we could do something similar with all Federal spending.

      You seem to be saying that the current rules that allow this tax avoidance are just fine. That's an opinion, but not an argument against those of us who want to see this rule changed.

      "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody gets busy on the proof.” ― John Kenneth Galbraith

      by Urban Owl on Sun Jul 27, 2014 at 10:05:26 AM PDT

      [ Parent ]

      •  I would change them too (0+ / 0-)

        By “moral,” I meant that given the tax code as it stands today, there is nothing immoral about avoiding taxes in compliance with the law.  However, I think a case can be made that the tax code itself is unfair.  For example, I have been opposed to IRAs since they were first created back in the 1970s.  It seemed unfair to give a tax break to people who are well off enough to save (at that time) $2,000 a year. They did not need help from the government, poor people did, the kind who could not save money.  But I took advantage of that tax provision by contributing the $2,000 to an IRA every year, from which I have benefitted immensely.  I would argue that it was moral for me to do so, even though I thought the law was unfair.

        As for the tax law as it stands today, I have many objections.  As for inversion in particular, I favor its elimination.  In general, I favor eliminating the Bush tax cuts.  In fact, I favor returning to the tax rates for individuals and corporations as they were before Reagan, because I believe the tax code was fairer then.  That would mean that I would have to pay higher taxes, and that would be fine with me.  But I am not going to send the government the money I would have paid under previous law, and I believe I am being moral in not doing so.

        So just as I do not believe I was acting immorally by opening an IRA even though I thought the law was unfair; and just as I do not believe I am acting immorally by paying taxes at the present level, even though I think today’s tax code is unfair; so too do I believe that Walgreens is not acting immorally by avoiding taxes, even though I think inversion should be eliminated as an unfair tax break to corporations.

  •  Still and again! (0+ / 0-)

    People want to talk about this in general terms but nobody actually SAYS anything.

    If "inversion" means that Walgreens will no longer pay US taxes, that's bad.

    If blocking inversion means that Walgreens will pay US taxes on money it makes in Honduras, well who could blame them?

    The whole fad sounds like an election year scheme to produce FUD.

    "...we live in the best most expensive third world country." "If only the NEA could figure out all they have to do is define the ignorance of the next generation as a WMD..." ---Stolen from posts on Daily Kos

    by jestbill on Sun Jul 27, 2014 at 02:10:37 PM PDT

  •  I've heard about this proposed move... (0+ / 0-)

    ...then I heard that Walgreen's was contemplating moving to the UK, then that they were going to move from Deerfield, IL, to downtown Chicago into the Old Post Office Building (which straddles the Eisenhower Expressway), then back to this.

    I wish they'd make up their damned minds, what little they have left of them!

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Sun Jul 27, 2014 at 05:25:44 PM PDT

  •  Walgreen's not the culprit (0+ / 0-)

    WADR, Owl, you couldn’t be more off-base or misguided. What obligation does Walgreen’s have to pay more taxes than they absolutely, by law, have to? Do you do that, or anyone you know? Do you consider it unpatriotic to not pay more – read “donate” – more to the IRS than the IRS claims you owe? Get real. The real problem causing these tax “inversion” moves is the US corporate tax structure, which is one of the most screwed-up in the world. We have the highest tax rate among developed countries, yet raise less tax than the average because of the countless loopholes which pork-barrel politics has provided. And then, we’re the only rich country to demand taxes from a citizen or company regardless where the money was earned, but, in the case of corporations, only when the money is brought back to the US. So many big companies don’t.

    And Congress has refused, for decades, to enact anything even close to the genuine, fundamental, tax reform we need. Both Democrats and Republicans have had good ideas over the years, but have been blocked by other Democrats and Republicans demanding something extra which the other side won’t concede. Walgreen’s, like many other companies, is simply doing what the law allows. Indeed, given that they’re not a charitable organization, they’re simply doing what good financial management dictates. The culprits in this issue sit in Washington. You should be starting petitions to move your Congressmen to behave rationally – one might even say “patriotically” – on this issue, because, until they do, the moves overseas will continue.

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