Thursday,
Jul 10, 2014 06:15 AM CDT
It’s
Not Just Walgreens: The Absurd Measures Corporations Will Take to Dodge Taxes
The popular
"inversion" scam allows American institutions to game the system.
It's unethical -- and unpatriotic
Jim Hightower, AlterNet
http://www.salon.com/2014/07/10/its_not_just_walgreens_the_absurd_measures_corporations_will_take_to_dodge_taxes_partner/?utm_source=facebook&utm_medium=socialflow
How would you react if one of
your neighbors announced that while he obviously benefits from having clean
water, highways, Medicare, police protection, parks, schools, and other public
services, he was no longer going to pay his part of the taxes that make them
available?
And what if this neighbor also said he was renouncing his American
citizenship to become a citizen of Switzerland, because he could pay less taxes
there? Not that he was actually moving
to that cold country, mind you — no, no, he’d still be living right here in the
good ol’ USA, still benefitting from all those public services that taxpayers
like you and I provide.
Surely, you think, this has to be a joke. A person can’t really do this, can they? No, of course a “real” person could not get away
with this. You see, corporations are
funny creatures. For example, they don’t
want to pay their share of America’s tax bill, but then they’re first in line
demanding subsidies, grants and other special handouts from America’s
government to pad their financial bottom line.
That’s hilarious hypocrisy — but it’s no laughing matter, since it
means you and I have to pay more to cover their tax avoidance, while also
seeing our public money siphoned out of the programs that we need into the
pockets of corporate elites, who most often use the funds against the public
interest.
Corporate tax dodging has become both rampant and ridiculous. Take an
increasingly popular scam called “inversion,” which is nothing but a perversion
of tax law, business ethics and common decency. It works like this: By merging
with a corporation based in a country with lax tax laws, a U.S. corporation can
reincorporate as a citizen of that country and shift its tax obligations there,
even though all or most of its profits are made from sales in the U.S-of-A.
For example, Gregory Wasson of Long Grove, Illinois, announced that he
has plans for all of the above. Gregory isn’t my neighbor, but he sounds like a
“real” person. So how is he getting away
with this scam, you ask? While Greg is
not personally my neighbor, or yours, the corporation he heads might be. Wasson
is CEO of America’s largest drugstore chain, Walgreens Corporation, the
sprawling, $72-billion-a-year behemoth that is in all 50 states and has stores
in thousands of neighborhoods all across the country.
But Greg no longer wants
Walgreens to be American, so he is presently trying to use this tax-shifting
film-flam by merging with a Swiss-based chain. Rather than paying the roughly
$800 million a year tax tab it owes to our nation, Walgreens would pay maybe
$600 million to Switzerland.
Of course, the stores will not move to Switzerland. Wasson fully intends to keep extracting
profits from our neighborhoods and for Walgreens to keep benefiting from all
the public services that America provides, from police to infrastructure. Through inversion — a reversal of the natural
order — the giant corporation would continue to enjoy enormous profits and
benefits it gets from the United States, but pay Swiss taxes. So you and I are left picking up Walgreens’
tab, and the Swiss gain 600 million in tax dollars for services and
infrastructure they did not provide — unless you count being a tax shelter as
service and infrastructure.
Walgreens’ crass tax ploy would also give it a competitive advantage
over other American drug stores that aren’t so greedy as to abandon America
and, as Sen. Dick Durbin put it, “move their headquarters for a tax break.”
Oh, one more thing: About a
fourth of Walgreens’ annual income is derived from — guess who? — our U.S.
government. Yes, our very government
that the people of Wasson & Co. say they no longer want to help support. The unpatriotic drugstore ingrate drew nearly
$17 billion last year from Medicare and Medicaid payments provided by Uncle
Sam.
If Walgreens doesn’t want to support public programs like these, the
programs should not be supporting Walgreens.
Jim Hightower's most recent book is
"Let's Stop Beating Around the Bush." He produces a monthly
newsletter, The Hightower Lowdown, and a syndicated daily radio commentary.
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