Tax inversion move by Walgreen could be risky


A new report forecasts Walgreen (WAG) could save $4B in federal taxes over the next five years by relocating its headquarters to Switzerland.

Though some large shareholders are pushing for the company to make the tax inversion move, the action could also cause a major public relations backlash with Walgreen bringing in a quarter of its revenue from Medicare and Medicaid.

A decision on the issue is expected by the end of the summer.

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Comments (7)
  • Clayton Rulli
    , contributor
    Comments (3392) | Send Message
     
    its not enough they charge me 2 bux for a drink...this has gone too far now. Guess ill go to the CVS across the street from now on
    11 Jun 2014, 07:54 AM Reply Like
  • BlueOkie
    , contributor
    Comments (9983) | Send Message
     
    My concern is the tax bill to the stockholders - inversion causes capital gains.
    11 Jun 2014, 07:56 AM Reply Like
  • SteveTheHawk
    , contributor
    Comments (2170) | Send Message
     
    I sold WAG a while back so as to increase current yield, so I guess it wouldn't impact me. I tend to agree that it could be a PR problem. I would tend to view it as a pretty cheesy move. In my mind, if the US isn't good enough for them, I'm not inclined to shop there. They want tax dollars to support their stores but don't want to pay their share of the taxes. Bad move IMO.
    11 Jun 2014, 09:09 AM Reply Like
  • snoopy44
    , contributor
    Comments (1422) | Send Message
     
    Steve:
    I think you are missing the point. US corporate taxes are among the highest in the world. Our legislators are completely clueless on this subject as I read that Carl Levin (D) in response to Pfizer's recent move to do an inversion was to threaten to increase taxes even more. I swear these politicians are "brain dead". Lower corporate taxes solves two issues; reduces the need for "inversion" and raises the likelihood of corporations "repatriating" foreign profits. Washington is so "dysfunctional" right now that they simply don't get it.

     

    S.
    11 Jun 2014, 10:28 AM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3392) | Send Message
     
    yeah but US profits are the highest too. If corporations want to do profitable business in one of the safest places in the world, they gotta pay up.
    11 Jun 2014, 11:13 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1634) | Send Message
     
    I'm not ready to get my knickers in a knot over this. Some shareholders are pushing for it, but I haven't seen anything indicating that corporate management is planning it. In fact I could swear I read a couple of weeks back that they're looking to move some headquarters functions, but to a Chicago location if I recall correctly.
    11 Jun 2014, 09:16 AM Reply Like
  • Retired and loving it
    , contributor
    Comments (689) | Send Message
     
    I've wondered for some time about the quality of Walgreen management. This little tax wheeze confirms that management are not the sharpest knives in the drawer. Go CVS.
    11 Jun 2014, 09:55 AM Reply Like
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