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Walgreens

Corporate tax inversions are the talk of the town these days. When I sat down to write this article, I had planned on slamming Walgreens and Burger King for their corporate inversion, tax-treason trickery plan to abandon America, transfer technical ownership to a foreign country, and leave their domestic corporate competitors (those who have not decided to renounce their U.S. citizenship) holding the tax-bill bag.

But, alas, Walgreens has decided to reverse course and not partake of the politically forbidden fruit, just as I was ready to fabricate some picket signs and protest at my local Walgreens, which is just a mere mile or so away from my house.

What Burger King will do remains to be seen, as they still have time to reverse course.

I would have been happy to urge potential Walgreens customers to patronize CVS, which is right across the street. Actually, I began avoiding Walgreens in favor of CVS for years once found out that CVS used American-owned Kodak paper for their in-store photo labs and Walgreens used foreign-owned Fuji.

Why does it matter, you ask, when an American company with longtime American roots decides to – for tax purposes anyway – acquire a foreign firm and then pretend that it’s a foreign-owned corporation as a result? Walgreens would have continued to benefit from the “American system” in a variety of ways:

A. The American legal system. Since Walgreens has over 8,500 stores across the country, they depend upon and benefit from the ability to consider and process potential lawsuits or other legal matters, or protection from frivolous or wrongheaded ones.

B. The American transportation system (highways, bridges, roads, and railways to deliver both goods and customers to their stores), the American education system (which provides qualified and intelligent employees to help serve their American customers).

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C. The American water-management system (did you want your water delivered with or without sticks, dirt, and grass?).

D. The American health care system. (Since they are more or less in this business anyway, shouldn’t they understand and respect the costs, the benefits, and the complexity of such a system?).

E. The American power-grid system. (Since Walgreens no longer wants to pay taxes for America’s efforts to maintain its power -grid, maybe we could take them offline at the first sign of an overloaded grid, and forbid them from any future benefits from the investment of American tax dollars in new developments of greener, cleaner, lower cost energy).

Burger King is a slightly different case in that it is already foreign-owned anyway. As I wrote in my “Buy American Mention of the Week” in February 2013, Brazilian-owned 3G Capital bought Burger King in 2010. The ownership of 3G Capital is composed of Brazilian billionaires Jorge Paulo Lemann, Marcel Herrmann Telles, and Carlos Alberto Sicupira.

All three billionaires have a controlling stake of Anheuser Busch Inbev, which is the Belgium-Brazilian parent of formerly American-owned Anheuser-Busch. This is why I am focusing more of my emphasis on the tax inversion strategy around the Walgreens situation rather than Burger King.

The new Burger King, barring any corporate tax inversion reversals, will merely switch from being Brazilian-owned to a combination of Brazilian-owned and Canadian-owned, with Brazilian-owned 3G Capital owning 51 percent. A nationwide boycott of Burger King will only help in the sense that it calls attention to the tax inversion trickery, which should be banned.

America is not going to stop investing her tax dollars into advanced research and national investment that will ultimately benefit American corporations and consumers alike. For companies like Walgreens to expect to freely absorb the benefits of American research and investment while paying less than other direct competitors in the same industry would be like, what’s the word?…oh yeah – freeloading!

Maybe, had this tax inversion deal gone through, we could have somehow denied Walgreens the right and ability to market and sell new products resulting from government (taxpayer) research dollars. Since Walgreens wanted to pay fewer taxes, maybe the new breakthrough drugs and other medical products they would be able to market could be reduced by a similar amount.

For example, if through a tax inversion they were able to pay just half of the taxes that CVS would be required to pay, maybe the new cutting-edge products they would be able to market and sell could be reduced by half? And maybe firms like CVS, who are paying more than their fair share in taxes compared to Walgreens, could decide which ones? That might be one way to re-level the playing field. Would we have to use the American Internet system, developed through American government research, to send an email to Walgreens in their new foreign-incorporated home to give them the news?

Just like any other competitive activity, whether it’s a sport like baseball or a game like poker, all competitors in the American marketplace should play by the same rules. One corporation should not be able to play under sleight-of-hand tax inversion rules (and pay fewer taxes into the American system) while the other corporations do not (and pay more taxes into the same American system).

I say that we boycott Walgreens anyway to send a message to any American corporation, which is this: If you flirt with tax inversion strategies, patriotic American consumers will boycott your company, your brand, and your products and services, shifting their American dollars to your American competitors.

I say we patronize drug stores CVS and Rite-Aid, as well as the pharmacies inside American grocery chains like Costco, Publix, Winn-Dixie, Safeway, Kroger, and Target. Because once companies see a threat to their bottom line, which is what they have their eyes on with their tax inversion strategies, they will respond accordingly, realize where their allegiance should lie, and behave like true American companies.

Get the classic “How Americans Can Buy American,” by Roger Simmermaker, as well as his new “My Company ‘Tis of Thee.”

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