Democrats Take Aim at Tax Inversion ‘Virus’

The Senate Finance Committee on Tuesday held a hearing on the topic of “inversion,” a tax avoidance tactic that companies use to legally reincorporate in another country on paper, where a key Senate leader referred to the trend as a virus infecting the U.S. economy. That same day, Dick Durbin, the senior senator from Walgreens’ home state of Illinois wrote a scathing letter to CEO Greg Wasson, warning of a potential consumer and political backlash if Walgreens decides to invert.

On Wednesday, Senate Majority Leader Harry Reid went further, chiding the company for considering a move he described as the definition of “exploitation”.

“The company that Charles Walgreen started is reportedly considering a renunciation of its American citizenship and a move to Switzerland, just to avoid paying its fair share of taxes,” Reid said on the Senate floor. “This practice, what some call ‘inversion,’ is a tax trick — a loophole.”

President Barack Obama joined the chorus of inversion opposition on Thursday, urging quick action by Congress to stop the practice. During his speech at the Los Angeles Technical College, Obama promoted what he called “economic patriotism”.

“I don’t care if it’s legal,” Obama declared. “It’s wrong.”

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Report: Offshoring America’s Drugstore

Walgreens, our country’s biggest pharmacy chain, may move its corporate address overseas to avoid paying its fair share of taxes.

It may soon shift its corporate address from Illinois to Switzerland, a tax haven. This may let the company avoid $4 billion in U.S. taxes over the next five years, leaving the rest of us to pick up the tab.


Walgreens would still be controlled from the U.S. It would still benefit from our roads, bridges and infrastructure, and it would will still have more than $70 billion in annual U.S. sales.

A new report, co-authored by Americans for Tax Fairness and Change to Win Retail Initiatives, explores Walgreens’ potential tax avoidance scheme and the impact it would have.

Read the report here.