Senator Bernie Sanders Blasts Walgreens For Tax Evasion

Image via Senator Sanders' Facebook page: facebook.com/senatorsanders

Image via Senator Sanders’ Facebook page: facebook.com/senatorsanders

In a recent article submitted to Reddit, Senator Bernie Sanders blasted Walgreens for their plans to possibly move their headquarters to Switzerland in order to pay less taxes. The drug retail chain, which is the largest in the United States, has been considering the move which would allow them to pay nearly $800 million less in federal taxes annually.

Senator Sanders also announced that he would add an amendment to an upcoming Department of Defense funding bill that would bar the federal government from giving contracts to companies that offshore their headquarters in order to avoid paying U.S. taxes.

Walgreen’s, the giant drugstore chain, recently announced that it is considering moving its corporate headquarters from the U.S. to Switzerland to avoid $4 billion in U.S. taxes over the next five years.  According to a recent report from Americans for Tax Fairness, nearly a quarter of Walgreen’s $72 billion in sales last year came from Medicare and Medicaid. (Source)


Let that sink in for a minute. Walgreens made about $18 billion last year from taxpayers and they want to move their headquarters to Switzerland so they can pay less taxes? $4 billion over 5 years works out to close to $800 million annually, which is but a tiny fraction of the money they make from federally-funded Medicare and Medicaid. Seriously, that’s like 4% of the money that Walgreens puts in the bank thanks to us, the American taxpayer. Here’s what they stand to gain:

By moving to Switzerland or England, Walgreen could reduce its effective tax rate from 37 percent to 24.2 percent in its 2016 fiscal year, according to one analyst. That would save the company an estimated $783 million in taxes in the first year, according to a report issued this month by Meredith Adler of Barclays, an investment bank.

With the tax savings, Walgreen’s estimated earnings in its 2016 fiscal year would rise to $6.50 per share, from $5.51 per share, an 18 percent increase, Adler estimated. The extra profits could be used to make acquisitions, build new stores and create jobs, or the cash could be returned to shareholders in the form of dividends or stock buybacks. (Source)

This is, in my opinion, one of the greatest problems with Wall Street and publicly traded companies. Stockholders demand strong dividend payouts each quarter and if their demands are not met, the CEO (who made over $13.6 million last year) and the board of directors face a revolt. Some would argue that the public owns stocks, and therefore the profits of these companies trickle down to all of us. However, only about one half of Americans own stocks and really, who actually pays their household bills on dividend payouts?

Will Walgreens take that $783 million and use it to raise the annual wages of their 240,000 employees? If you take $783 million and divide it by 240,000, you get approximately $3,300 per employee annually, or about an average $1.60 hourly wage hike. But would they do that? I highly doubt that.

So what will happen with all of the money they save by moving their corporate headquarters offshore? Walgreens will increase the earnings per share by 18% and their shareholders will applaud their business move. Meanwhile, they will continue taking our federally-funded Medicare and Medicaid unless Congress somehow pulls their heads out of their corpulent backsides and puts a stop to it, which is also highly unlikely.

While Walgreens is most certainly free to pick up and reestablish their headquarters anywhere in the world that they want to, we are also free to not shop there and give our business to local pharmacies instead. After all, most locally-owned pharmacies do accept Medicare and Medicaid along with private insurance, and some will even deliver your prescriptions to you. That is, if Walgreens hasn’t already bought out your local pharmacy, as has happened repeatedly over the past few years throughout the country.

What can you do to make your voice heard? Contact your senators and tell them to support Senator Sanders’ amendment to bar federal contracts from being given to tax evading companies. After you’ve done that, contact Walgreens via email or call their corporate number at (847) 940-2500 and let them know you will take your business elsewhere if they move offshore.

Finally, as I will repeat over and over again until Election Day, get out and vote. If you’re tired of politicians demonizing the poor for being moochers while taking contributions from offshore corporations who make billions of dollars off our taxes, please vote in November.

Just as a reminder, here’s what’s up for grabs:

—All 435 seats of the U.S. House of Representatives

—33 seats in the U.S. Senate

—46 State Legislatures (including Kentucky)

—38 State and Territorial Governorships.


Comments

Facebook comments

  • Eg Kbbs

    Well if they do, then time to my my prescriptions to another pharmacy.

  • chaserblue

    The only “jobs” they’ll be creating is pool boys, yacht captains and gourmet chef positions…

  • Stephen Barlow

    That is a GREAT Amendment! NO Unamerican company can get a single sale from ANY American Government, contract or not.

    I would also TARIFF them and their products by 50% so they can no longer compete in America,

    • William Cooper

      I would not tariff them by a set value, but by enough to make the equivalent cost for the item or service to be equal with that of the prevailing cost. This means they can’t do what Japan did IE use government funds to reduce the cost of the item to make until it is still cheaper.

      • Stephen Barlow

        I agree. A TARIFF to make American gods competitive. FORCE them to be like car manufacturers, MAKE them build plants in American and CREATE American jobs to avoid the tariffs.

  • Matthew Reece

    Taxation is theft and slavery. One does not “evade” victimization. One does what is necessary to defend against it.

    • William Cooper

      You have no idea what your talking about, how about you recognize that even our founding fathers understood that taxation is necessary IE Alexander Hamilton.

      “As to taxes, they are evidently inseparable from government. It is impossible without them to pay the debts of the nation, to protect it from foreign danger, or to secure individuals from lawless violence and rapine.”

      • libertarians are lame

        He’s a libertarian, and has no idea how government works.

      • Matthew Reece

        I know how government works. It commits the very crimes that those who defend it claim it is to protect us against, and confuses the matter by giving their crimes different names, such as taxation, arrest, conscription, and war.

      • Matthew Reece

        Prove that monopolized services provided coercively through taxation are necessary. You cannot, because that entails proving that competitive voluntary methods of providing services will not work, and this is a proof by exhaustion that cannot be exhausted.

        “Our Founding Fathers” were a bunch of slave-raping hypocrites.

      • Charles Vincent

        And Thomas Jefferson abolished all internal taxation including the whiskey tax and guess what the government didn’t fall apart nor were we Conquered by a foreign power. Jefferson also reduced the national debt by ~1/3 and fought the Barbary wars. Your assertion is full of crap and you are the one that doesn’t have a clue.

    • Michael Keville

      You are a moron

      • Matthew Reece

        Ad hominem is an admission of defeat, ignorance, and intellectual dishonesty.

    • The Dane

      I would LOVE to know how you would go about financing defence, law enforcement or infrastructure. Just to mention a few.

      No community can function without everyone giving to the common good.

      • Matthew Reece

        The abolitionists did not care how cotton would be picked after slavery ended. They cared that slavery is immoral. Likewise I do not care how defense, law enforcement, or infrastructure will be financed without a state imposing taxes to pay for them. I care that taxation is immoral.

    • Gina

      on what & how do you expect this country to run, such nonsense!

      • Matthew Reece

        I do not expect the country to run at all, as it does not exist. Each individual person exists.

      • q3pob4hq1

        I applaud your commitment to your ideals Matthew. Most conservatives try very hard to pretend that they are not anarchists, it’s refreshing to see someone come out with the truth. At least in this case we know what we are debating.

        Taxes certainly do suck in a very large way but we haven’t even figured out how to stop blowing each other up yet. The tax-free utopia so many of us dream of is probably a long ways off still. You’d have to do it gradually, sort of like the “suggested donation” tactic used in fund raising. I think eventually though it could be feasible. Just like tipping is expected in restaurants, when you’re driving down the highway and come across a road construction crew you slip the stop sign holder a ten spot and then continue on your way. They could even put up signs saying how close they are to having the project fully funded.

      • Matthew Reece

        I do not identify as conservative, but as anarcho-capitalist, though some people would put that on the far-right. I think it can be shown that all political positions other than anarcho-capitalism are essentially “anarcho-capitalism plus contradictions.” Some positions (e.g. minarchism) contain a few minor contradictions, others (e.g. anarcho-communism) contain a few major contradictions, others (e.g. conservatism) contain many minor contradictions, while still others (e.g. progressivism) contain many major contradictions.

  • Erin Weldon

    Like others are probably saying, Walgreen will lose my business. Walgreens has made a lot of money off me the past several years via Medicare Part D and supplemental RX payments. I hope Senator Sanders will keep us up to date on what they do.

  • Jim Bean

    I wonder how many of the righteous, hyperventilating liberals complaining about Walgreens submit the sales taxes to their states when they buy something online from someone who doesn’t collect the sales tax? Or is that somehow “different?”

    • The Dane

      Because the buyer would have no way of knowing that the company they buy from is failing to follow the law?

      • Jim Bean

        Yeah, no, the buyer can look at his receipt for the purchase and easily determine whether sales tax was charged. That wasn’t even a ‘nice try.’

    • FD Brian

      so you want to pass an internet sales tax law now?

      • Jim Bean

        No, not an internet sales tax law. I want to make it a crime to be a hypocrite.

      • FD Brian

        then you might end up in jail.

      • Jennifer Elisabeth

        Jim Bean would do a lifetime sentence then.

      • q3pob4hq1

        So would our elected officials still be allowed to occupy their office while in jail for hypocrisy? It is an interesting concept, with such a law we might actually be able to start trusting our politicians again.

    • q3pob4hq1

      Me too, please let us know when you figure out how many that is.

  • FD Brian

    If Walgreens moved and saves that money, I’m willing to bet that none of the prices in their store will fall, no hourly wage earner will make more money but that only the upper echelon of management will benefit and only them.

  • cozmiccowgirl

    I think that if a company wishes to move its headquarters to avoid taxes, that it be required to close all its facilities and retail establishments in this country. If they don’t pay, they don’t play.

  • Georgia-dude

    I wont be doing any more business with Walgreen Pharmacy if they move there headquarters to SWITZERLAND!! There are other Pharmacy than just Walgreen’s. They may be one of the biggest drugstore but does not mean that they can’t be cut down by other Pharmacy such as CVS or Wal-mart’s Pharmacy.

    Walgreen’s, the giant drugstore chain
    Switzerland
    Switzerland