Did stockholders punish Walgreens for being “patriotic”?

posted at 5:21 pm on August 6, 2014 by Ed Morrissey

So much for loyalty, eh? CBS News reports that Walgreens took a beating today from investors, losing 12% of their share price after making two announcements. One was an acquisition of the remaining stake in a British pharmacy chain, which may have played a part in the drop. The other announcement was that Walgreens would not use an inversion strategy to relocate its headquarters outside the US to protect itself against high tax bills.

Which led to the exodus? CBS thinks it’s more the latter than the former:

Walgreen had been pondering whether to take advantage of the strategy, which would have made it one of the best known consumer brands to shift its headquarters overseas in order to pursue lower taxes. The move would have cost Americans $4 billion in lost tax revenue over five years, according to advocacy group Americans for Tax Fairness.

Tax inversions are orchestrated when an American company merges with a foreign firm and shifts its headquarters overseas, allowing them to bypass some U.S. taxes. It’s become a hot-button topic on Wall Street and Capitol Hill, given the fact that the technique may result in a loss of $20 billion in taxes over the next decade, according to a study from the Joint Committee on Taxation.

But Walgreen’s decision to stay put in the U.S. reveals a split between the expectations of American consumers, some of whom view tax inversions as unpatriotic, versus shareholders, who want companies to act in their best financial interest.

Shares of Walgreen slipped nearly 12 percent in mid-morning trading on Wednesday, after the company disclosed its decision and plans to buy the remaining stake in the British pharmacy chain Alliance Boots that it doesn’t already own. It should be noted that a company’s stock sometimes declines after announcing an acquisition.

“The company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the U.S.,” Walgreen chief executive Greg Wasson said in the statement.

It could be some of both, but the decision to pay higher taxes had to factor into this decision. The political combat over inversion and Barack Obama’s demand for “economic patriotism” has some corporate boards worried about consumer reaction and activists, but apparently not so worried as to discard the option as Walgreens did. The Washington Post reported today that American tax policies has “a wave of corporations” preparing to adopt inversion as a way to minimize their tax liabilities over the next few months:

So far this year, about a dozen U.S. companies — including such well-known brands as Medtronic medical devices and Chiquita bananas — have merged with foreign firms and shifted their headquarters offshore to avoid U.S. taxes, analysts say.

Dozens of additional deals are in the works, according to administration and congressional officials, and other companies are quietly contemplating the move. Last month, CVS Caremark chief executive Larry Merlo met with Sen. Charles E. Schumer (D-N.Y.) and urged him to act to stop the rash of expatriations. Otherwise, Schumer said that Merlo warned him, CVS “might be forced to do it, too,” to duck a total tax bill expected this year to approach 40 percent.

“There’s a huge number coming,” Schumer said in an interview. “We hear there are going to be several big announcements in August.”

The maneuver, known as tax “inversion,” has been around for decades, but the pace has accelerated in recent years as U.S. firms have expanded overseas and other nations have adopted lower tax rates. At the same time, company executives have grown increasingly frustrated with Washington, where political gridlock has stymied efforts to reduce a 35 percent federal corporate tax rate that is higher than in any other advanced economy.

If we know what the problem is, why don’t we work on solving it? That’s too hard, it seems, so Obama’s looking for executive actions he can take to make leaving the US more difficult, if not impossible:

The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills, seeking to stanch a recent wave of so-called corporate inversions, Treasury Secretary Jacob J. Lew said on Tuesday.

Treasury Department officials are rushing to assemble an array of options that would essentially wipe out the economic incentive for the deals, Mr. Lew said. No final decision has been made.

“The question is, Can we do enough that it will materially change the economics of inversions so that companies will make different decisions?” Mr. Lew said in an interview. “The things we are looking at look to me like they could very materially change the economics of inversions.”

What kind of actions are they considering? Raising taxes even further, of course:

His article referred to a section of the tax code that allows the Treasury secretary to issue rules for determining whether a given financial instrument should be treated as debt or equity. The idea would be to limit the degree to which a foreign parent company could load up a United States subsidiary with debt, which can be deducted for tax purposes, and require that any excess be designated as equity, which is not eligible for deductions.

Mr. Shay also proposed other administrative moves to reduce the use of offshore earnings without paying United States tax.

This is what’s known as throwing gasoline on a fire. It only works if the end goal is to do even more damage than the current crisis is causing. The reason American corporations are looking for inversion opportunities is because the US corporate tax code is so uncompetitive in the first place. Making the tax burden greater doesn’t improve the situation; it only provides more incentive to leave, and certainly much less incentive to invest hoarded cash in the US economy. It might temporarily slow down inversions, but it will chase investment capital even further outside of the US or into shelters of one kind or another.

Why not just fix the problem? The White House doesn’t want to work with Congress, that’s why, and would rather use the issue to troll voters with nonsense tropes like “economic patriotism” that appeal to the worst impulses. Patriotism is the last refuge of the scoundrel, Dr. Johnson once wrote, and appeals to “economic patriotism” are the last refuge of the incompetent and impotent scoundrels.


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The share price drop has much more to do with pronouncements from Wall St. forecasters about the future of stores like Wallmart.

lexhamfox on August 6, 2014 at 5:28 PM

Stockholders should punish companies for doing anything less than maximizing their investment. That’s why it’s called investing.

slickwillie2001 on August 6, 2014 at 5:28 PM

What kind of actions are they considering? Raising taxes even further, of course:

Otherwise known as: “The beatings will continue until morale improves.”

bofh on August 6, 2014 at 5:28 PM

Heads Up Part Deux:

http://www.breakingnews.com/

US-Africa Leaders Summit 2014
59s
Photo: The press gathers in a State Department auditorium before press conference on Africa Summit – @markknoller

https://twitter.com/markknoller

http://www.whitehouse.gov/live

canopfor on August 6, 2014 at 5:29 PM

Why not just fix the problem? The White House doesn’t want to work with Congress, that’s why

This IMO should be the GOP message going into the mid-term elections. Snuggles doesn’t want to work with Congress so why give him the safety valve of having Harry Reid and a Dem Senate as a firewall?

Happy Nomad on August 6, 2014 at 5:31 PM

After 5:30, still no snuggles for his 5:00 presser.

Happy Nomad on August 6, 2014 at 5:32 PM

The title is sooooo illogical, Ed.

1. The board/CEO’s primary fiduciary function is to maximize the shareholders’ profits. That’s their job.

2. obama and all the thinking, alas, should work to lower the tax rates, to disincentive companies from leaving the US.

3. obama, illegally, threatens to use his pen to punish corporations who leave the US, or move business units outside, when he the hypocrite is all for a globalized world.

4. Walmart crawled into his azz, to put water on his pen, fools. Their board and CEO must be fired.

5. Corporate taxes in the US are higher than in most socialist Euroepan ratholes.

6….

Gaaaaaaaa

Schadenfreude on August 6, 2014 at 5:32 PM

Why not just fix the problem?

Liberalism exists to perpetuate problems. It can’t be about fixing anything because the low-information and Democrat voters will then have nothing to bitch about and wouldn’t be able to demand that the government ‘do something’ every time a problem arises.

Aizen on August 6, 2014 at 5:33 PM

But, but, but, Ned Pepper said this wouldn’t happen! Shareholders were going to reward Walgreen’s for its ‘economic patriotism.’ He promised.

Resist We Much on August 6, 2014 at 5:33 PM

Companies are going to get out now before the election because the marxists are probably going to make a law against moving.

I don’t know a lot about how this stuff works but doesn’t buying an outside the country business have the same effect as moving the whole business out? Seems to me they can sneakily move parts of the business to England little by little.

crankyoldlady on August 6, 2014 at 5:33 PM

Why not just fix the problem? The White House doesn’t want to work with Congress, that’s why, and would rather use the issue to troll voters…

That’s it, right there.

It means more to Obama to be able to troll the public claiming that congress doesn’t do anything, that it’s all the GOP’s fault, and that he is somehow justified in breaking the law by legislating from his desk than it does to bring business investment to this nation, provide jobs for citizens and legal immigrants, revitalize our cities, and increase legitimate revenues for the federal government while he does it.

thatsafactjack on August 6, 2014 at 5:33 PM

disincentive disincentivize

Schadenfreude on August 6, 2014 at 5:33 PM

Treasury will take this on?

Go to Hell, you traitors of the constitution.

It’s none of their business, legally. The congress deals with taxes, solely.

Schadenfreude on August 6, 2014 at 5:34 PM

The other announcement was that Walgreens would not use an inversion strategy to relocate its headquarters outside the US to protect itself against high tax bills.
=======================================

Hopey,…The Warrior Crusader on a Social InJustice War Sumpins:

Obama urges quick action on ‘inversions’
****************************************

John D. McKinnon and Siobhan Hughes of the Wall Street Journal wrote on Thursday that President Obama threw himself into the politically charged effort to block US firms from reincorporating overseas for tax reasons, calling the relocations “wrong” and urging Congress to stop them through quick-fix legislation.

Speaking Thursday at Los Angeles Trade-Technical College,

Obama accused the firms involved of “cherry-picking the rules” and damaging the country’s finances and the economy.

“My attitude is I don’t care if it’s legal, it’s wrong,” Obama said,

according to the article. He and other Democrats increasingly have cast the issue in terms of economic patriotism, questioning the loyalty of firms that take advantage of American infrastructure and services, then take their profits elsewhere.

He also blamed Republicans, accusing them of “directly blocking policies that would help millions of Americans,” including his own ideas for overhauling the tax code, and instead focusing on preserving tax breaks for the wealthy and big businesses, McKinnon and Hughes wrote.

http://www.accountingweb.com/article/bramwell%E2%80%99s-lunch-beat-obama-inversions-%E2%80%98i-don%E2%80%99t-care-if-it%E2%80%99s-legal-it%E2%80%99s-wrong%E2%80%99/223661

canopfor on August 6, 2014 at 5:36 PM

If corporations are people let’s just get rid of the corporate tax rate and make them pay personal taxes.

BTW US citizens can’t expatriate to avoid taxes.

Tlaloc on August 6, 2014 at 5:37 PM

Why not just fix the problem? The White House doesn’t want to work with Congress, that’s why, and would rather use the issue to troll voters with nonsense tropes like “economic patriotism” that appeal to the worst impulses. Patriotism is the last refuge of the scoundrel, Dr. Johnson once wrote, and appeals to “economic patriotism” are the last refuge of the incompetent and impotent scoundrels.

Indeed, indeed.

obama is the biggest charlatan the land ever knew.

Schadenfreude on August 6, 2014 at 5:38 PM

Apple has multi-billions outside the US, and obama doesn’t care.

obama stuffs the pockets of the 1%rs and his own.

All else is obfuscation in the most impertinent ways.

Schadenfreude on August 6, 2014 at 5:39 PM

Will corporations need passports soon?

Schadenfreude on August 6, 2014 at 5:40 PM

If corporations are people let’s just get rid of the corporate tax rate and make them pay personal taxes.

BTW US citizens can’t expatriate to avoid taxes.

Tlaloc on August 6, 2014 at 5:37 PM

Shareholders already pay taxes on distributions.

The US has the highest corporate tax rate in the world and is the ONLY nation on the planet that also taxes profits earned overseas.

There is a reason that countries like Canada, Singapore, and even Communist China are more attractive to investors. All of them have lower corporate tax rates.

Resist We Much on August 6, 2014 at 5:40 PM

What constitutes “patriotic”?

Pro-capitalism and being “patriotic” appear to have a conflict, in this case.
.
That’s what happens when a bunch Marxist/Leninists take over the country.

listens2glenn on August 6, 2014 at 5:44 PM

https://twitter.com/markknoller

Mark Knoller @markknoller · Jul 24

“That’s not fair,” says POTUS of tax code letting hedge fund mgrs pay 15% on a billion dollars while secretary pays 20% or 23% on income.

Mark Knoller @markknoller · Jul 24

“When the middle class is doing well,” says POTUS on @cnbc, “lo and behold, business does well also.”

Mark Knoller @markknoller · Jul 24

Pres Obama says he supports tax reform if it makes tax code fairer and simpler & not just slashes corporate rates & keeps loopholes.

Mark Knoller @markknoller · Jul 24

“You’re just gaming the system,” says Pres Obama of companies that engage in corporate inversion: adopting foreign parent company.

Mark Knoller @markknoller · Jul 24

In @CNBC interview, Pres Obama says companies moving abroad to avoid taxes “really not doing right” by the US.

Mark Knoller @markknoller · Jul 24

Boehner spksmn @michael_steel says if POTUS doesn’t support lower taxes for everyone, he’s to blame for companies moving abroad.

Mark Knoller @markknoller · Jul 24

“Under Pres Obama, the United States has the highest corporate tax rate in the developed world,” says @SpeakerBoehner spksmn in response.

Mark Knoller @markknoller · Jul 24

“Don’t let the cynics get you down,” Obama tells audience. “Cynicism is a choice but hope is a better choice.”

Mark Knoller @markknoller · Jul 24

POTUS: Lets stop rewarding companies that ship jobs overseas & reward those bringing jobs back to US. “That’s what economic patriotism is.”

Mark Knoller @markknoller · Jul 24

Calls it “an unpatriotic tax loophole:” We we need to stop corporations from renouncing their citizenship to get out of paying their taxes.

Mark Knoller @markknoller · Jul 24

Pres Obama says the corporate loophole to avoid taxes is “actually legal.” “I don’t care if it’s legal, it’s wrong,” he says.

canopfor on August 6, 2014 at 5:44 PM

But, but, but, Ned Pepper said this wouldn’t happen! Shareholders were going to reward Walgreen’s for its ‘economic patriotism.’ He promised.

Resist We Much on August 6, 2014 at 5:33 PM

Maybe Ned was assuming that the $2500 they’d be getting from Obamacare savings would offset the sting of being a patriot.

5:45 and Snuggles has yet to appear at his presser.

Happy Nomad on August 6, 2014 at 5:45 PM

umm.. stock prices always go down on acquisition news like this where 144 million new shares are issued.

faraway on August 6, 2014 at 5:46 PM

So, Dear Leader bullied them into being patriotic…? Sounds like the business world punished them for poor future financial performance….

d1carter on August 6, 2014 at 5:46 PM

Stockholders should punish companies for doing anything less than maximizing their investment. That’s why it’s called investing.

slickwillie2001 on August 6, 2014 at 5:28 PM

Was too excited to read your comment, first. Thank you.

Schadenfreude on August 6, 2014 at 5:46 PM

‘Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.’

– Judge Learned Hand, Gregory v Helvering, 69 F.2d 809, 810 (2d Cir. 1934), aff’d, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)

Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

– Judge Learned Hand, Commissioner v Newman, 159 F2d 848 (1947)

Resist We Much on August 6, 2014 at 5:46 PM

Apple has multi-billions outside the US, and obama doesn’t care.

Schadenfreude on August 6, 2014 at 5:39 PM

The Kennedy family fortune is mostly offshore too.

Don’t insert logic into this issue because it is all about politics.

Happy Nomad on August 6, 2014 at 5:47 PM

obama, the goon who despises patriotism, fools others into it…

Goebbels orgasmed all over Europe.

Schadenfreude on August 6, 2014 at 5:47 PM

So, CBS is just doing a little leftwing activism… and Ed plays along.

faraway on August 6, 2014 at 5:48 PM

If corporations are people let’s just get rid of the corporate tax rate and make them pay personal taxes.

Tlaloc on August 6, 2014 at 5:37 PM

.
Businesses should be paying a Federal tax rate of ZERO . . . period.
.
Do we need to define “business”?

listens2glenn on August 6, 2014 at 5:49 PM

5:45 and Snuggles has yet to appear at his presser.

Happy Nomad on August 6, 2014 at 5:45 PM

Happy Nomad: Crap,…I’m 0 for 3,..on Presser time guess’s:0

canopfor on August 6, 2014 at 5:51 PM

Patriotic? Ed, the fact that the U.S.A. corporate tax rate is the highest in the industrialized world, that’s unpatriotic! Plus, a huge disincentive to have your HQ’s in America! Puerto Rico was abandoned as a manufacturing tax haven for our pharmaceutical companies with the Tax Reform Act of 1986, and look at Puerto Rico today!
It seems that the Democrats and RINO’s have their brains wired in a bassackward fashion! The first type of reform that should be addressed when the November election is over, is serious Tax Reform. For corporations and individuals, which means LOWER rates. Close loopholes on a gradual basis, and watch offshore companies repatriate to the U.S.A. That may not fit the Globalist agenda, but it would sure help our country!

tomshup on August 6, 2014 at 5:54 PM

The burden of higher taxes eventually falls to the consumer … mainly the middle class, which is shrinking daily.

Looks like soon we’ll all be in progressive utopia where everyone is equally poor and equally miserable.

darwin on August 6, 2014 at 5:54 PM

That’s too hard, it seems, so Obama’s looking for executive actions he can take to make leaving the US more difficult, if not impossible:

Will he build a ‘Berlin Wall’ to keep people from getting out? But wait! That would very much work against his making it so easy for non-Americans coming from the south to get in.

VorDaj on August 6, 2014 at 5:54 PM

Meanwhile, slap!

Schadenfreude on August 6, 2014 at 5:55 PM

It’s none of their business, legally. The congress deals with taxes, solely.

Schadenfreude on August 6, 2014 at 5:34 PM

alas, no. the single, most abused clause in the Constitution is the “commerce clause”.

WaldoTJ on August 6, 2014 at 5:57 PM

Maybe Obama can keep them from leaving with his illegal alien army. They have no allegiance to the US, but plenty to him.

darwin on August 6, 2014 at 5:57 PM

Maybes Hopey/Changey can call for an Occupation of Share Holders homes,
like he did with the UnionGoonions and the Extremely Filthy Dirty Rotten Rich CEO Bonuses!!!
(sarc)

canopfor on August 6, 2014 at 5:57 PM

Here comes the Patron Protection and Affordable Companies Act.

Axeman on August 6, 2014 at 5:58 PM

canopfor on August 6, 2014 at 5:51 PM

I predict 6:07 so as to interrupt everyone’s dinner and/or local newscasts.

Brat on August 6, 2014 at 5:58 PM

Maybes Hopey/Changey can call for an Occupation of Share Holders homes,
like he did with the UnionGoonions and the Extremely Filthy Dirty Rotten Rich CEO Bonuses!!!
(sarc)

canopfor on August 6, 2014 at 5:57 PM

Oh I’m sure the word has been passed down to prepare the troops for a little physical violence. The drones just need some weed, booze and a little food.

darwin on August 6, 2014 at 5:59 PM

But, but, but, Ned Pepper said this wouldn’t happen! Shareholders were going to reward Walgreen’s for its ‘economic patriotism.’ He promised.

Resist We Much on August 6, 2014 at 5:33 PM

As The Party grows, more and more members will reward those companies that stayed loyal to The Party.

Axeman on August 6, 2014 at 6:00 PM

chief executive officers should stop complaining about regulations and show greater social responsibility.
===================================================

Obama says CEOs should quit complaining: Economist

By Roberta Rampton
WASHINGTON Sun Aug 3, 2014 4:13pm EDT
*************************************

(Reuters) – President Barack Obama said corporate America has done well under his economic policies, telling the Economist magazine that chief executive officers should stop complaining about regulations and show greater social responsibility.

“If you look at what’s happened over the last four or five years, the folks who don’t have a right to complain are the folks at the top,” Obama said in an interview conducted last week and posted on the magazine’s website late on Saturday.

Republicans have sought to portray Obama as anti-business, and businesses have complained that Obama’s signature healthcare law and the Dodd-Frank financial reforms have raised costs.

Business groups are lobbying against his new plan to curb climate-changing carbon emissions from power plants.

“I would take the complaints of the corporate community with a grain of salt,” Obama said,

arguing that his policies have been friendly to business. “They always complain about regulation. That’s their job.”

(More….)
=============

http://www.reuters.com/article/2014/08/03/us-usa-obama-business-idUSKBN0G30MC20140803

canopfor on August 6, 2014 at 6:01 PM

The media has just been given the 45 minute warning on Dear Leader’s appearance…./

d1carter on August 6, 2014 at 6:01 PM

Barry and his choomer gang engineered just this kind of benefit for Delphi during the Government Motors handoff to the greedy UAW:

Obama Aides Let Delphi Use Tax Tactic President Assails

slickwillie2001 on August 6, 2014 at 6:01 PM

Let’s not staunch the blood flow; let’s just outlaw hemorrhaging.

Axeman on August 6, 2014 at 6:03 PM

Will Stompyfoot call Putin a meanie…?

d1carter on August 6, 2014 at 6:03 PM

The move would have cost Americans $4 billion in lost tax revenue over five years, according to advocacy group Americans for Tax Fairness.

I love it when the media fails econ101 like this. Where does Walgreen’s get the money to pay it’s taxes? From it’s customers! The very people this ‘news’ article says are going to lose.

tkc882 on August 6, 2014 at 6:03 PM

The oaf, who’s an hour late to his own speech, touts “economic patriotism” to corporations…he who is NOT patriotic and who things that’s for rubes…

One can’t make this up in the best/worst of fiction.

Leftists are irrational liars and thugs.

Schadenfreude on August 6, 2014 at 6:03 PM

he who is NOT patriotic and who things thinks that’s for rubes

Schadenfreude on August 6, 2014 at 6:05 PM

canopfor on August 6, 2014 at 5:57 PM

Oh I’m sure the word has been passed down to prepare the troops for a little physical violence. The drones just need some weed, booze and a little food.

darwin on August 6, 2014 at 5:59 PM

darwin: Oh gawd no, er, I wouldn’t doubt that!:)

canopfor on August 6, 2014 at 6:07 PM

Speaking of Tax Lootery:
========================

https://twitter.com/AP

The Associated Press @AP · 51s

BREAKING: AP source: Bank of America agrees to pay between $16B and $17B in Justice Department deal: http://apne.ws/1pCSxmV
===========================================================

http://bigstory.ap.org/article/ap-source-bofa-agrees-pay-16-17b-us-deal

canopfor on August 6, 2014 at 6:10 PM

The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills

So Commissar Obama will be demanding “papers”?

GarandFan on August 6, 2014 at 6:27 PM

Making the tax burden greater doesn’t improve the situation; it only provides more incentive to leave

And that’s Obamanomics, working as intended.

The Rogue Tomato on August 6, 2014 at 6:30 PM

The move would have cost Americans $4 billion in lost tax revenue over five years, according to advocacy group Americans for Tax Fairness.

I don’t get any of Walgreens tax revenues, so this American certainly won’t be losing anything. Do you get any of Walgreen’s tax revenues? Are your taxes any lower because Walgreens pays the highest corporate income tax in the world, and would they be any higher if Walgreens DID move off-shore to avoid paying them? Hardly.

So I guess the move really wouldn’t cost “Americans” anything, but it might cost the “United Statists” up to $4 billion in lost tax revenue over five years. I can live with that, despite that the United Statists at “Americans for Tax Fairness” is all up in arms about it.

…starve the dang beast…

flyovermark on August 6, 2014 at 6:38 PM

Daddy, did you plug the hole?

WryTrvllr on August 6, 2014 at 6:43 PM

Obama’s looking for executive actions he can take to make leaving the US more difficult, if not impossible

Nothing says #winning like building a wall to prevent people from leaving.

O is the Bobby Brown to our Whitney Houston.

AeroSpear on August 6, 2014 at 6:44 PM

his is what’s known as throwing gasoline on a fire. It only works if the end goal is to do even more damage than the current crisis is causing. The reason American corporations are looking for inversion opportunities is because the US corporate tax code is so uncompetitive in the first place. Making the tax burden greater doesn’t improve the situation; it only provides more incentive to leave, and certainly much less incentive to invest hoarded cash in the US economy.

Basically Obama wants to implement a modified Smoot-Hawley, where instead of setting the taxes/tariffs high for incoming goods, they want to set them high for companies already here, but are contemplating moving overseas and punishing those that do via the tax code. Which of course, completely ignores the possibility that other counties in retaliation will up the tax burden for companies that remain in the U.S., but operate overseas.

That 1930 legislation pretty much helped turn a deep recession into a depression. Obama seems ready to try and do it again by putting walls up around America, only like the walls around Berlin, they’re designed to keep companies from escaping the worst of his actions.

jon1979 on August 6, 2014 at 6:47 PM

The share price drop has much more to do with pronouncements from Wall St. forecasters about the future of stores like Wallmart.

lexhamfox on August 6, 2014 at 5:28 PM

I disagree. Walmart’s problems started when they tried to upscale their merchandise and stores and brought in higher end merchandise in a failed attempt to get upper middle class people to shop there. Once they straighten that out (if ever) they will be back on track.

Johnnyreb on August 6, 2014 at 6:54 PM

Johnnyreb on August 6, 2014 at 6:54 PM

Wall St. changes in attitude towards Walmart and some of their peers was broadly covered in the media. It was big news outside of finance. Analysis like that is much more likely to impact pricing than the existing tax regime.

lexhamfox on August 6, 2014 at 7:36 PM

Wall St. changes in attitude towards Walmart and some of their peers was broadly covered in the media. It was big news outside of finance. Analysis like that is much more likely to impact pricing than the existing tax regime.

lexhamfox on August 6, 2014 at 7:36 PM

And Goldman Sachs has been pushing people to buy Dollar Store and related stock for months and they are pumping out articles to push those stocks. I don’t trust anything they say.

Johnnyreb on August 6, 2014 at 7:47 PM

I see this playing out like in Atlas Shrugged. The government will force businesses to stay.

Decoski on August 6, 2014 at 8:53 PM

US citizens C

txdoc on August 6, 2014 at 8:59 PM

Sorry for Previous post. IPad screwed up.

US residents can use an inversion like strategy to avoid taxes, but you have to move to another country and then renounce US citizenship. This is essentially what the companies are doing.

This is ideal for retirees who have enough money to live on. I don’t know how long it would take to obtain citizenship in a new country, but many allow you to essentially buy a citizenship if you bring in enough money. Then renounce citizenship and give Jugears the finger.

txdoc on August 6, 2014 at 9:04 PM

One of the very FIRST things the next republican president, along with the repub house and senate should do is regulate the ‘pen and the phone’. I didn’t like Bush doing it, and I certainly don’t like this communist cretin writing executive orders.

Diluculo on August 6, 2014 at 10:04 PM

Obama is a fascist. If our tax rates weren’t already the 3rd highest in the world for corporations (after Zimbabwe and Uzbekistan, the powers of economic growth), if we weren’t the only industrialized country to tax the foreign earnings of our corporations, maybe he would have a point. But to drive companies out, and then call them unpatriotic, is flat out treasonous.

Hang the bum (after a fair trial of course).

Directors have a legal fiduciary responsibility to their shareholders to seek the maximum return on their equity. I would join a class action lawsuit if I owned Walgreen stock.

Adjoran on August 6, 2014 at 10:59 PM

The share price drop has much more to do with pronouncements from Wall St. forecasters about the future of stores like Wallmart.

lexhamfox on August 6, 2014 at 5:28 PM

Oh, please…even Amazon is having problems.

Of course, let’s skirt around the real issue once again…TENS OF MILLIONS OF AMERICANS SIMPLY DON’T HAVE MUCH MONEY TO SPEND!

…online or otherwise. Oh, and “free shipping” is BS. Tell me a company is going to suck up the shipping fees and not build it into their pricing.

I’m starting to think that there really are people out there who think that micro-breweries and the internetz are going to save the economy. All we’ll get is more drunks and robbed more easily by Russian hackers.

Stockholders should punish companies for doing anything less than maximizing their investment. That’s why it’s called investing.

slickwillie2001 on August 6, 2014 at 5:28 PM

I agree 100%.

But, there are dire consequences for many, especially in an economy on life support…in hospice…with a morphine drip from Federal Reserve Board, Inc.

Dr. ZhivBlago on August 6, 2014 at 11:48 PM

This is a no-brainer. Good shareholders and board members view the inversion strategy as a short-term win with a massive long term risk. What happens when the nation you’ve ducked into starts nationalizing major corporations? No, that isn’t what happened to Walgreen stock here.

The larger business always takes a haircut when acquiring a new subsidiary, even when there’s a strong outlook. That this article, and the surrounding stories, minimize the impact of the merger in order to make the suggestion in the headline, is absurd.

A major Dutch tech firm acquired an American equipement supplier last year, and took a 20% stock bath in the immediate aftermath. All of the loss was recovered within the next quarter, after the initial merger strategies proved workable. There is always a breath-holding period for an acquisition, and the acquiring firm assumes all of that risk, while the acquired company gets a big bump.

It’s business.

Freelancer on August 7, 2014 at 12:17 PM

I say it’s more patriotic to leave…

WHO IS JOHN GALT?

HAExpert on August 7, 2014 at 1:46 PM

What’s the big deal?

If I find myself in a situation, let’s say at a party, where it’s obvious the host hates my living guts, I generally leave the party.

In this case, the “host” is obama, his party (see what I did there) is in power and hates the companies in this country (how else could they possibly interpret his words AND actions???) and they’re leaving in droves.

What was he expecting to happen?

runawayyyy on August 7, 2014 at 3:27 PM

If corporations are people let’s just get rid of the corporate tax rate and make them pay personal taxes.

BTW US citizens can’t expatriate to avoid taxes.

Tlaloc on August 6, 2014 at 5:37 PM

That deserves a special prize for cluelessness.

Apparently, the troll is unaware that the people who make up the corporation have already paid personal taxes. The corporate tax is on top of whatever personal taxes were paid.

But you could make an excellent case for abolishing all corporate taxes, since the corporation doesn’t actually pay taxes at all. They just add the price of the taxes they supposedly “pay” to everything they sell. Every corporate tax is really a tax on the corporation’s customers, and therefore just a stealth tax on private citizens.

There Goes the Neighborhood on August 8, 2014 at 12:13 AM