Illinois-based Walgreen Co. was hammered for 10 minutes on the Senate floor this morning by Majority Leader Harry Reid, who spent most of his opening speech ridiculing the largest U.S. drugstore retailer for considering whether to move its headquarters overseas to lower its tax bill.
“It’s just a tax trick, a loophole,” the Nevada Democrat said. “Of course Walgreens won’t actually move to Switzerland … In reality, they will stay in Chicago, right where they are now. That’s because Walgreens doesn’t want to actually leave America. Why would they?”
Reid said Walgreen executives would be “foolish” to move their families away from “their fancy homes here in America” and walk away from the nation’s workforce, transportation infrastructure and law enforcement. Reid said the company earned $16.7 billion from Medicare and Medicaid last year.
Walgreen would “dodge” $4 billion in five years with the move, Reid said.
“What Walgreens is saying is, ‘We love America, we love being in America, but we’re not going to pay for it,'” Reid said. “What the Walgreen company is doing sure seems like exploitation to me.”
Calling it a “stash and dash game” and “corporate exploitation of the American taxpayer,” Reid said inversions — mergers with offshore companies shifting the tax-bill overseas — are becoming commonplace in the U.S., pointing to Medtronic and others that have announced similar plans.
Reid said he’s “ready to roll” on Senate legislation for a two-year moratorium on inversions — though no committee or floor vote has been set yet. This morning, the Senate plans a procedural vote limiting tax breaks for companies that move jobs overseas. Reid is seeking support for the inversion hiatus.
“It will also let corporations know that cheating the American people with a tax trick is not a viable business plan,” Reid said. “If corporations want to leave America, it’s their right. But American taxpayers shouldn’t be forced to foot the bill when U.S. corporations want all the benefits without having to pay their fair share.”