Walgreens is the pharmacy that, at least according to its website, can be found “at the corner of Happy & Healthy.” If its executives have their way, however, it may soon be found near the intersection of Ziegelackerstrasse and Untermattweg in Bern, Switzerland. By acquiring the much smaller Swiss company that is located near that corner, the American company can dodge millions in American taxes.
What would that mean for the 4,200 employees who work at Walgreens headquarters in Deerfield, Illinois? Probably nothing, as Deerfield’s local newspaper (a branch of the Chicago Sun-Times) explains. “Inversion,” as these maneuvers are called, doesn’t actually mean a company moves anything. Like the Panamanian flag fluttering on a second-class freighter, all it tells you is that a vessel for hire has found a new and more compliant registry.
Call it the “Inversion Evasion.” Walgreens would become a “Swiss company” for tax avoidance purposes only. The combined corporation would do a small percentage of its business there. In all other respects, however, the corporation would remain fully American — headquartered here, making most of its profits here, and continuing to use its lobbying dollars and campaign money to distort the American political process. (Michael Hiltzik of the Los Angeles Times has more detail on the process.)
All of which raises the question: How does it feel to be the CEO of a “defector corporation”? Do such executives face the opprobrium of society as they continue to frequent fine dining establishments and enjoy the fruits of this land that has given them so much?
So far, apparently not. But that may be changing. The inversion trick hasn’t received much public attention, but it’s quickly moving into the spotlight. Illinois Sen. Richard Durbin has already written a letter suggesting that Walgreens could become the subject of a boycott it if decides (“pretends” might be a better word) to become a Swiss corporation.