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| The logo that almost became a punchline |
Since the Ferguson police chief announced he won't be releasing the name of the trigger-happy "Officer Who Shall Not Be Named" because of fears for his safety (really??) and the autopsy results on poor Michael Brown's body haven't been released either, the corporate side of our cultural landscape deserves some attention.
While they never actually left the good ole' U.S of A, just the idea that a corporate behemoth (market capitalization of $59.46 billion) like Walgreens would relocate their official headquarters to the UK or Switzerland to take advantage of lower corporate tax rates ignited a virtual firestorm of protest on social media.
Change.org, MoveOn.org, People For the American Way and various consumer activists groups are just some of the groups that banded together to organize online petitions, e-mail blasts, consumer education/outreach and other efforts to rally people to the cause of corporations paying their fair share - eventually prompting some finger-pointing and sharp comments from a number of politicians including the President.
The growing inequality in this nation is a big part of what motivated people to respond to this issue; the idea that corporations can take any action they want to increase their profit margins, even when it comes at the expense of the American people and the good of the country. But what got people so riled up about Walgreens in particular for doing the ole' tax two-step?
After all, remember Apple is notorious for dodging billions in US taxes by basing their corporation overseas through a complex labyrinth of tax shelters in places like Ireland; even though some of those overseas addresses have no actual employees and are essentially run by Apple's brain trust from Cupertino, California. Maybe we all like our iPhones, iPads and iTunes too much to get too indignant over Apple's mind-numbing tax chicanery.
Walgreens isn't the only American corporation to claim they aren't actually based in America. According to data compiled by the House Ways and Means Committee, in the past decade 47 different US corporations have relocated overseas to avoid paying their fair share of taxes by using a maneuver called 'Corporate Inversion'. It's pretty sketchy any way you look at it.
That term has become more familiar to regular common folk like me in the wake of Walgreens thwarted attempt to cut their tax bill. While corporate inversion sounds like some kind of strange sex act from a cheeky David E. Kelly television drama, it's basically a fancy description of a complex tax avoidance scheme that is perfectly legal. (It was illegal for Eric Garner to sell loose cigarettes in Staten Island, but legal for a company to use an overseas PO box to sidestep the IRS? Hmm...)
The informative DontMessWithTaxes Website defines corporate inversion as: "...a tax domicile maneuver where a United States company buys a foreign subsidiary and then declares that its U.S facilities are owned by the subsidiary. The result is lower or NO taxes to Uncle Sam."
Walgreens had planned their corporate inversion carefully with the $15.26 billion purchase of a large British pharmacy chain called Alliance Boots. With the purchase, they could have based themselves in the UK to take advantage of the more favorable tax rate. (Plus I'm willing to bet Walgreens could capitalize the $15.26 billion purchase cost on their taxes so it would be considered a capital expense, saving them even more in taxes...)
But there was something distinctly un-American about the whole affair. Walgreens was founded over a century ago here in the U.S. They're based in Deerfield, Illinois. Their own logo reads, "The pharmacy America trusts"! A company whose products are shipped in American trucks on American highways subsidized, built and maintained by American taxes. Or on American trains on American rails subsidized and maintained in large part by American tax payers or through fees indirectly charged to consumers by railroads. The people waiting at Walgreens drive-thru pharmacies to get prescriptions filled are Americans for the most part.
The social media backlash was swift and in the end Walgreens CEO Greg Wasson wasn't taking any chances; especially not in an election year. We all saw how Mitt Romeny's overseas tax shelter chicanery played out with the American people during the 2012 Presidential elections; call it what you want, it was generally regarded as cheating, plain and simple.
Walgreens will remain an American company because it is an American company. If Walgreens' customers have to pay their fair share of taxes, Walgreens should too. That doesn't make Apple or the 46 other U.S. corporations that use corporate inversion to duck billions in taxes right; but it does put Walgreens on the right side of the argument. And you can't put a price on that.
Perhaps the most valuable lesson in this whole affair is the power wielded by everyday folks simply raising their voices on an issue until they were heard. Social media tools may have been the mechanism, or the medium by which this goal was accomplished - but it was the voice of average people that forced the change. That's what real Democracy is all about.
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