In The News
A large US pension adviser has written to US regulators asking them to investigate Illinois-based retailer Walgreens plans to move its tax base from the US to Switzerland as part of its takeover of Alliance Boots.
The Limits of Corporate Citizenship: Why Walgreen Shouldn’t Be Allowed to Influence U.S. Politics If It Becomes Swiss
Dozens of big U.S. corporations are considering leaving the United States in order to reduce their tax bills. But they’ll be leaving the country only on paper. They’ll still do as much business in the U.S. as they were doing before.
Years ago, I noticed that America’s major drugstore chains tend to utilize the same corporate color scheme. Walgreens, CVS, Rite Aid—all patriotic in red, white, and blue. Even regional chains take their identity cues from Old Glory. But this July 4, American corporations—including one drugstore chain, in one recent example—are using tax loopholes to act in the most unpatriotic of ways.
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.
Walgreen Co. is at a crossroads, but it may not be “at the corner of happy and healthy” as its advertising slogan suggests.The nation’s largest drugstore chain is considering a move that would allow it to significantly cut its tax bill and increase profits. But it’s being painted by critics as un-American for looking to make money for shareholders through financial engineering at the expense of the communities that it grew up in.
Dick Durbin, the second-most powerful U.S. Senator in Washington, is upping the ante and “chiding” a sudden flurry of U.S. companies considering taking advantage of a loophole that allows them to avoid higher corporate taxes here by reincorporating overseas.
Walgreen Co. pulled its goals for fiscal year 2016, saying key decisions still need to be made about its partnership with European drug giant Alliance Boots GmbH, while also highlighting a number of pressures that hurt its pharmacy operations in the May quarter.
Tax fairness activists rallied outside of the Walgreens downtown Chicago flagship store Wednesday morning in protest of possible plans by the nation’s biggest pharmacy chain to move its corporate address from Illinois to Switzerland, a “tax haven.”
Walgreen, the biggest U.S. retail drugstore chain, is considering decamping to Switzerland in a quest for bigger tax breaks, just two years after reaping a hefty package of Illinois tax credits in exchange for keeping corporate jobs in the state.
If Walgreen wants to save a mountain on taxes by moving to Switzerland, it had better get ready for an avalanche of criticism. The drugstore giant could save $4 billion in federal taxes over the next five years by reincorporating in Switzerland, according to a report to be released Wednesday.