About 20 picketers gathered Wednesday morning outside the Walgreens flagship store in the Loop to protest a potential Walgreens reincorporation in Switzerland—a move that one new report alleges will allow the company to avoid paying billions of dollars in taxes.
William McNary, co-director of Citizen Action Illinois, held up his Walgreens rewards card in front of the crowd. "I didn't get this card from Switzerland. I got it right here," he said. "Walgreens is an Illinois company."
The report, a joint effort from Americans for Tax Fairness and Change to Win, accuses Walgreens of attempting to move its corporate address to Switzerland to reduce its tax rate from about 30 percent to 20 percent—which, the report claims, could save Walgreens $4 billion over five years.
A merger with Swiss company Alliance Boots could open the door for Walgreens to re-headquarter, at least on paper, in Switzerland.
“We continue to analyze a number of issues as we move toward the window for exercising the second step of our transaction with Alliance Boots, and we will do what is in the best long-term interest of our company and its shareholders,” Walgreens spokesman Jim Graham emailed in a statement. Graham declined to elaborate further.
Citing numbers from Deutsche Bank, JPMorgan and UBS, the report calculates that Walgreens could avoid somewhere between $580 million and $1 billion in American taxes annually if the Deerfield-based company is eligible to reincorporate.
“Walgreens holds itself out as a health care provider, and that’s really true in terms of the revenue … they’re a huge beneficiary of tax dollars,” said Nell Geiser, director of retail initiatives at Change to Win, saying Walgreens benefits from Medicare and Medicaid spending. “This kind of company should not be able to use this kind of tax loophole because it’s morally reprehensible.”
In a blog post countering the report, Washington, D.C.-based think tank the Tax Foundation said the $4 billion calculation is based on the assumption that Walgreens would bring certain foreign earnings back to the U.S., and that even as a Swiss company, Walgreens would be taxed on its American earnings.
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