2014-07-17

Amazing Contrast in America

At the border are thousands of illegal aliens trying to enter the United States. In America, the corporations and wealthy are trying to figure out where to go.

Walgreen Weighs Riding Tax-Inversion Wave
But Walgreen is currently thinking about leaving American shores, as part a plan to buy the rest of Alliance Boots GmbH, which operates a U.K. drugstore chain and is based in Switzerland. The move could help Walgreen lower its U.S. tax bill saving the company hundreds of millions of dollars a year—money that wouldn't flow into the U.S. Treasury.

If it goes ahead, it would be an unusual use of the controversial and complex maneuver known as an inversion. While well tested among pharmaceutical and manufacturing companies that earn much of their income overseas or have assets like patents that are held offshore, the move has never been attempted by a major U.S. retailer, according to tax experts.

The maneuver would be a bet on the future. Apart from Alliance Boots' contributions, Walgreen makes all of its money in the U.S. But with the domestic market for drugstores now saturated—75% of Americans live within five miles of a Walgreen-owned pharmacy—investors and analysts see faster growth coming from places like China and Latin America.

USG cannot stop the process, other than by changing the tax laws. If USG blocks U.S. corporations from moving their HQ overseas, there's always the option of having a foreign company buy out the American one.

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