Report: Walgreens shift would cost U.S. $4b

The U.S. Treasury could lose around $4 billion over a five-year span if the drug store company Walgreens shifts its legal address abroad, according to a study from liberal groups.

{mosads}Walgreens bought a stake in a Swiss pharmacy chain, Alliant Boots, two years ago, and can merge completely this year.

Americans for Tax Fairness and Change to Win, using estimates from research firms, say such a move would allow Walgreens to cut its effective tax rate from 31 percent to 20 percent, leading to $4 billion in less revenue.

The two groups say that move would be especially galling given that about a quarter of Walgreens’ sales come from Medicare and Medicaid. The company also gets tax breaks from Illinois, where it’s headquartered. 

“Walgreens may decide to no longer be an American company simply so it can dodge paying its fair share of taxes,” said Frank Clemente, executive director of Americans for Tax Fairness.

“Many Americans will find it unfair and deeply unpatriotic if the company moves offshore, while continuing to make its money here, leaving the rest of us to pick up the tab for its tax avoidance.”

Congressional Democrats are taking a fresh look at the practice that Walgreens is considering, called an inversion, after the drug maker Pfizer sought to take over its British counterpart AstraZeneca.

Sen. Carl Levin (D-Mich.) and Rep. Sandy Levin (D-Mich.) both recently introduced legislation targeting those sorts of moves.

Walgreens told news outlets that it was looking at a number of issues as it considered its next steps.