Asks if ‘the corner of happy and healthy’ is in the Swiss Alps
WASHINGTON, D.C.–(ENEWSPF)–July 22, 2014. In a letter to the CEO of Deerfield, Illinois-based Walgreens, U.S. Senator Dick Durbin (D-IL) today expressed his strong opposition to the speculation that Walgreens will buy Swiss-based retailer and wholesaler Alliance Boots and use a strategy called “inversion,” to move the company’s headquarters overseas, but only on paper, in order to avoid paying U.S. taxes.
“Customers have many choices about where to shop and where to have their prescriptions filled. I believe you will find that your customers are deeply patriotic and will not support Walgreen’s decision to turn its back on the United States. Nearly all of your $2.5 billion in profits earned last year were from sales to U.S. taxpaying customers,” said Durbin. “Is ‘the corner of happy and healthy’ somewhere in the Swiss Alps?”
Similar to a letter he sent last week to AbbVie, Durbin noted the hypocrisy of Walgreen’s potential tax dodge by pointing out that much of Walgreens financial success was built on programs and infrastructure provided by the federal government and paid for by U.S. taxpayers. Nearly 25% of Walgreens profits were from U.S.-funded Medicare and Medicaid programs.
“Much of Walgreens financial success was built on programs and infrastructure provided by the U.S. government and paid for by U.S. taxpayers. The future success of Walgreens will continue to depend on U.S. taxpayers and government-funded programs, yet Walgreens will be using a clever tax dodge to avoid paying $4 billion in US taxes,” Durbin wrote.
Text of the letter is below:
July 22, 2013
Gregory D. Wasson President and Chief Executive Officer 108 Wilmot Road Deerfield, IL 60015Dear Mr. Wasson:
Recent reports indicate that Walgreens plans to buy the remaining 55 percent stake in Swiss-based retailer and wholesaler Alliance Boots so it can claim domicile abroad and dodge U.S. taxes. Given how much of Walgreens’ revenue comes from U.S. taxpayers and how much U.S. taxpayer-funded infrastructure Walgreens relies on to support its business, I strongly urge you and the board of directors to reconsider this move.
Walgreens has been in Illinois for its entire 113-year history. Its stores are a staple in our communities. Families have come to rely on the many goods and services available in your stores, including access to prescription and over-the-counter medication.
Customers have many choices about where to shop and where to have their prescriptions filled. I believe you will find that your customers are deeply patriotic and will not support Walgreen’s decision to turn its back on the United States. Nearly all of your $2.5 billion in profits earned last year were from sales to U.S. taxpaying customers.
Walgreens could dodge an estimated nearly $4 billion in taxes over the next 5 years, if your company inverts. I recognize that potential windfall in profit is an attractive option for shareholders. On the other hand, much of Walgreens financial success was built on programs and infrastructure provided by the U.S. government and paid for by U.S. taxpayers. The future success of Walgreens will continue to depend on U.S. taxpayers and government-funded programs, yet Walgreens will be using a clever tax dodge to avoid paying $4 billion in US taxes
Further, it is not clear to me how you can in good conscience build a profitable company using these public assets and then organize your financial holdings specifically to avoid paying taxes on those profits.
Nearly 25 percent of Walgreens profits were from U.S.-funded Medicare and Medicaid programs. Walgreens uses taxpayer-supported transportation infrastructure to stock its stores and deliver its products. Your company benefits from our country’s investment climate and educated workforce, and you and your fellow executives have benefited from tax breaks on compensation packages. If you and Walgreens’ board of directors decide to invert to avoid U.S taxes, you will be turning your backs on the very people that have allowed Walgreen’s to thrive and prosper.
I strongly urge you and the Board of Directors to reconsider your decision to move the company’s domicile overseas to avoid U.S. taxes. Surely, you and the board must recognize that your company’s continued commitment to America would be good for Walgreens’ bottom line.
Is “the corner of happy and healthy” somewhere in the Swiss Alps?
Sincerely,
Dick Durbin, U.S. Senate
Cc: Board of Directors
James A. Skinner, McDonald’s Corporation Greg D. Wasson, Walgreen Co. Janice M. Babiak, Ernst & Young LLP David J. Brailer, MD, Health Evolution Partners Steven A. David, Bob Evans Farms Inc. William C. Foote, USG Corporation Mark P. Fissora, Hertz Global Holdings, Inc. and the Hertz Corporation Ginger L. Graham, Two Trees Consulting Alan G. McNally, Harris Financial Corporation Dominic Murphy, Kohlberg Kravis Roberts & Co. LLP Stefano Pessina, Alliance Boots GmbH Nancy M. Schlichting, Henry Ford Health System Alejandro Silva, Evans Food Group, Inc.Source: durbin.senate.gov
