73 Comments - OneMan - Thursday, Jul 31, 14 @ 2:54 pm: Meh, I don’t think Pat Quinn’s thoughts on the matter are going to matter one whit to Walgreens IMHO. But it is good politics for him, so on the one hand I would suggest he stop since I don’t like him doing things that are wise politically. But it makes sense for him to do it. - CircularFiringSquad - Thursday, Jul 31, 14 @ 2:55 pm: We like Walgreens but there seems like there should be consequences to their decision. The company takes a slap at America for the sake of the bottom line. Dancing away does not seem correct. - Norseman - Thursday, Jul 31, 14 @ 2:56 pm: This ties in with his anti-Rauner rich guy campaign theme. - Chicago - Thursday, Jul 31, 14 @ 2:56 pm: Dems (mostly) whine about this possible move instead of thinking that maybe they should learn the lesson being taught…if you have over burdensome tax policy (& regulations in many instances) and a company or individual can legally avoid them, they will…Change your policy to be more welcoming. As basic as that is, it is lost on so many pols (especially Dems). - Grandson of Man - Thursday, Jul 31, 14 @ 3:00 pm: I voted to keep up the pressure. Walgreens benefits greatly from our tax dollars. To leave us is an unwillingness to share in our fiscal responsibilities to pay for all the government services that help the company make money. I remember corner drug stores. We don’t see too many of those anymore. Walgreens stores are everywhere. - Anon - Thursday, Jul 31, 14 @ 3:03 pm: Please, what is the Governor going to do about it? This is beyond him…as most things are. - RealChicagoHousewife - Thursday, Jul 31, 14 @ 3:04 pm: Walgreens is majority owned by Europeans and is being merged or has been merged with a successful European chain store. Their loyalty doesn’t lie with the USA anymore. If Walgreens moves, and it looks more and more like it will, Illinois will lose out financially in a time when we can ill afford to do so. Who wouldn’t like to pay less taxes and keep more of their money? - Try-4-Truth - Thursday, Jul 31, 14 @ 3:06 pm: I voted to “Keep it up”. It seems to me that corporate America will not be happy until they control the entire planet. They have pit cities against each other, states against each other and nations against each other. Corporations needs some push back. - Bogey Golfer - Thursday, Jul 31, 14 @ 3:06 pm: Could Walgreen’s be dropped as a prescription provider to state employees / retirees? Just thinking out loud. - Fun Days Ahead - Thursday, Jul 31, 14 @ 3:06 pm: Won’t it be fun when all the taxpaying corporations head out of Illinois so that there wont be any pension money for the current crew of whiners here. It’s happen\ing faster than one would think. Have plenty of popcorn so you can sit back and enjoy the show of a lifetime as Illinois implodes - walker - Thursday, Jul 31, 14 @ 3:06 pm: It was a point to be made. It’s value as an Illinois political issue is almost over. - 47th Ward - Thursday, Jul 31, 14 @ 3:07 pm: Keep it up and shame them, even if it’s just for sport. How many billions does Walgreen’s happily accept from Medicaid and Medicare? And they’re stashing their cash overseas to avoid taxes? (sorry Donovan). Plus, Quinn should be talking about anything other than Illinois’ budget and fiscal train wreck. ANYTHING. Hey look, a kitty! - ChrisB - Thursday, Jul 31, 14 @ 3:10 pm: Keep it up. And when they do move, it will be yet another Quinn failure. Honestly, what is he going to do about it? Stroke his finger at them and say, “Shame!” I can’t think of anything that can show Quinn being more inept. It has everything to do with the federal corporate tax rules and nothing to do with the state. You can show a direct line between DC’s unwillingness to change the tax code and all of these inversions. - Skeptic - Thursday, Jul 31, 14 @ 3:12 pm: Bogey: I’d be Steve Schnorff knows the exact answer, but I’d wager the answer is “no” without going through the entire procurement/bidding/etc. process from the begining. And even then writing the rules in such a way that excludes Walgreen’s without discriminatingly excluding Walgreen’s would be a recipe for more litigation. - wordslinger - Thursday, Jul 31, 14 @ 3:16 pm: Unless he’s talking to Stefano Pessina, it doesn’t matter what he says. That dude has 16% of the company now and the ear of the institutional investors, so he’ll be the ultimate decision-maker. It’s not like Deerfield management doesn’t know they’re taking a p.r. hit nationally. There’s just nothing they can do about it. But it’s a great nationalist, economic populist message for Quinn, especially after Rauner flubbed it so badly yesterday. And Fun Days, when it comes to what corporations pay in state income taxes or what an inversion “move” means, you have absolutely no idea what you’re talking about. I’m guessing you get that a lot. - ChrisB - Thursday, Jul 31, 14 @ 3:19 pm: @Bogey Golfer. Great idea. Tell all the old, poor, and infirm that they can no longer get their lifesaving drugs at the closest drugstore, right before an election. Let me know how that goes for you. - VanillaMan - Thursday, Jul 31, 14 @ 3:19 pm: Rauner seems to have accidentally given Quinn a mirror and Pat is fighting with his own image like he is a parakeet. AWKWARD! - Last Bull Moose - Thursday, Jul 31, 14 @ 3:20 pm: Lighten up. 1. Executives have a fiduciary duty to their shareholders. This legally trumps any personal considerations of national loyalty. 2. People who devise tax laws need to consider how taxpayers will react. This reaction was predictable. 3. At least as a foreign entity they cannot contribute funds to U.S. elections. - Demoralized - Thursday, Jul 31, 14 @ 3:21 pm: Keep it up. Quinn can’t change the law that allows this but he might as well try to use politics and PR to shame them. Doubt it will work, but it can’t hurt. - Anonymous - Thursday, Jul 31, 14 @ 3:22 pm: If they leave the US, then I will take all my dollars somewhere else, Sam’s Club,Wal-mart,CVS,etc. - Wumpus - Thursday, Jul 31, 14 @ 3:22 pm: I don’t think what he said was harsh at all. he should lighten up with the “fair share” talk. I don’t think he should remain silent as they are contemplating a move. - Retired - Thursday, Jul 31, 14 @ 3:27 pm: If they leave the US, our family will no longer be a customer of Walgreen’s. - DuPage - Thursday, Jul 31, 14 @ 3:28 pm: If Quinn doesn’t say anything, who will? This gets it in the news where everyone hears about it. - Bogey Golfer - Thursday, Jul 31, 14 @ 3:29 pm: =If they leave the US, then I will take all my dollars somewhere else, Sam’s Club,Wal-mart,CVS,etc.= @ChrisB - I believe Anonymous - 3:22 had my reply. @Skeptic - You are likely correct - just another PR stunt before the election. - VanillaMan - Thursday, Jul 31, 14 @ 3:29 pm: They have no option but to leave the US. Quinn is being silly. Worse, he is acting like Rauner knew what he was talking about. Rauner made a mistake. What is it that OW says? Oh yeah - dope! - dupage dan - Thursday, Jul 31, 14 @ 3:29 pm: See this line in the sand? Does this implied threat have any teeth? How long will people even remember what Walgreens does? - RNUG - Thursday, Jul 31, 14 @ 3:30 pm: Can’t hurt to play the populist card and keep the pressure on. Besides earnings, some companies also care about their public image, and this isn’t a pretty picture … but it won’t change anything. - Crunch - Thursday, Jul 31, 14 @ 3:33 pm: Between US corporate tax and Illinois State tax I can not blame Walgreens for moving we are taxing businesses and individuals out of this state and country. - NotRMiller - Thursday, Jul 31, 14 @ 3:36 pm: Do not care if they move to Zimbabwe : a Walgreen’s customer for life..this is DC/Obama Tea Party failure.. - so... - Thursday, Jul 31, 14 @ 3:39 pm: Once again, people, if Walgreens were to complete this inversion, they would still be paying taxes on their U.S. operations. Their tax liability for their U.S. operations, every single store, would not be reduced by one red cent. What would change is they would no longer be paying Uncle Sam for profits that their overseas subsidiaries earned by selling products overseas to overseas customers. The United States is the ONLY industrialized nation that does this. - walker - Thursday, Jul 31, 14 @ 3:39 pm: @Bull Moose: Your first point is simply false “as a matter of law.” The “fiduciary responsibility” is not as simple as guaranteeing the highest possible quarterly earnings. If the bad public relations due to a move or restructure in your largest customer market, causes your sales to go down, then you have failed as a CEO and Board to meet your fiduciary responsibilities. If you mess with the wrong governmental force, causing restrictive regulation impacting your operations, then you have likewise failed. If you break any law to increase profits, you obvious have failed as fiduciary. There are a lot of factors in being a good corporate officer, and a lot of stakeholders in the mix. It is never just about short term eanings. Be nice if the world were as simple as some would have it. - Adam Smith - Thursday, Jul 31, 14 @ 3:41 pm: Sadly, most Democrats are too ignorant of economics to understand anything other than using the big, fat cudgel of government to make everyone think and do what they demand. If I move to another community to access better schools for my kids, or safer streets can I be forced to keep paying extra taxes for the community I leave? Walgreens, Like many others, are making decisions based in part on the climate that government has created. News flash to liberal, big gov types…your stupid policies have consequences!! Quinn can keep it up, but as noted above, the “look, a kitty!” campaign is weak and will have very little impact among an electorate convinced of his incompetence. - A guy... - Thursday, Jul 31, 14 @ 3:41 pm: My political advice to PQ would be lighten up. This is the same company that has put stores in food desserts and other neighborhoods no one else wanted to go. Often, they were the catalyst for economic improvement in areas. They’ve been terrific corporate citizens. Cynically, I’d say keep it up and pour it on. It damages you. Many Illinoisans would not be shocked that trying to be competitive here is daunting at best and impossible at times. Pour it on Pat. At some point, Walgreens (and others) respond by blaming policy in Illinois and policymakers in Illinois led by Pat Quinn is what’s really killing business here. I know it’s a Fed issue. So does Pat. But he’s taking cheap shots at a Illinois iconic company that’s been a great corporate citizen. They’ll decide at some point not to be whacked anymore. They have a significant PR machine there. Yep, more capable than Pat’s. Bruce can just watch when that occurs. - Anon. - Thursday, Jul 31, 14 @ 3:41 pm: No. Why is he trying to get an Illinois-headquarterd company to pay more federal income tax than their non-Illinois competitors? - Ahoy! - Thursday, Jul 31, 14 @ 3:43 pm: Pat Quinn likes to negotiate through the media and make a punch of hyperbole. This is why he is ineffective and a very bad leader. If Pat Quinn wants Walgreen’s to stay, maybe he should be getting into the CEO and Corporate Board offices and making his pitch there. Walgreen’s is probably not going to make their decision based upon what Pat Quinn says to the media, in fact their probably not going to make their decision based upon anything he says (they probably have the same opinion of him that I do), but he would increase his chances if he would act like a professional instead of a bull-horn grabbing politician. - Cheryl44 - Thursday, Jul 31, 14 @ 3:44 pm: If Walgreens corporate leaves, I’ll never shop there again. - Anonymous - Thursday, Jul 31, 14 @ 3:51 pm: I actually e-mailed Walgreens’ corporate office with my concerns. I LOVE my Walgreens and the people who work there. I buy a lot of merchandise there because I pick up my prescriptions. However, the reply made me even more angrier. I deleted it but to sum it up: we don’t care we have to do what best for our company (profits). Fair enough. I can get prescriptions at the dang nabbed grocery store if I want. - Demoralized - Thursday, Jul 31, 14 @ 3:55 pm: ==Illinois iconic company that’s been a great corporate citizen== I don’t consider dodging taxes to be good corporate citizenship, but, hey, that’s just me. Might be good business. Not good citizenship. ==Many Illinoisans would not be shocked that trying to be competitive here is daunting at best and impossible at times.== This is tired rhetoric. I’ve frankly had it with the constant whining. We can’t ever make business happy. You just can’t. What they really want is zero taxation. Hey, I’d love that too. Unfortunately we have to pay for the services we receive. I know Bruce Rauner has some magic plan to reduce everybody’s taxes and blow a multi-billion dollar hole in the budget. Businesses are already complaining about the state of Illinois government. I have yet to hear how Bruce Rauner’s plans fix any of that. They will only make it worse, which tells me businesses don’t give a hoot about Illinois government finances so long as their taxes are low. - Skeptic - Thursday, Jul 31, 14 @ 3:59 pm: “can I be forced to keep paying extra taxes for the community I leave?” If you’re still using the services of the community you left, I don’t see any reason why you shouldn’t be paying for them. Somebody has to. - ChrisB - Thursday, Jul 31, 14 @ 4:01 pm: @Walker I’ve read the estimated 5 year tax savings are somewhere in the $4 Billion range. Do you really think bad PR would destroy $4B in net worth? Because that’s what it is going to cost in order to NOT do the move. - Now What? - Thursday, Jul 31, 14 @ 4:02 pm: I suggest keep it up, but don’t make it a one on one issue because it’d fuel Rauner’s fear tactics of how businesses are leaving Illinois because of Pat Quinn. Walgreens has been out of the US for years as others have stated. Don’t think he could do it, but PQ could appear to be a statesman and make a larger, nationalist argument about refining tax codes and regulations, while at the same time, shaming “big companies” for leaving the US for larger share-holder returns at the expense of American jobs. That populist message would sound like real leadership and may win some votes from those frustrated by “competition” as Rauner claims. - Robert the Bruce - Thursday, Jul 31, 14 @ 4:15 pm: Keep it up. If Walgreens is both ruthless and smart, their cost-benefit analysis included some PR damage and some small percentage drop in Illinois sales as a result of a possible hq move overseas. Let’s not let them overestimate the damage. - 4 percent - Thursday, Jul 31, 14 @ 4:20 pm: It’s a good political issue so Quinn won’t lighten up. However, this is a perfect example that actions have consequences. How many times have Governors and lawmakers ignored concerns from the business community whether it be on tax policy, minimum wage, etc. Lawmakers act like companies can absorb costs and keep operating with no adverse impact. The U.S. corporate income tax rate is the highest in the industrialized world. The U.S. is also one of the few countries that makes its companies pay that rate on all the worldwide income it brings home — even if the profit was generated by a subsidiary in a foreign country with low taxes, such as Ireland. Many counties like England and Canada have territorial systems that tax only domestic profits. Walgreens happens to be today’s punching bag but they are simply following the law passed by Presidents and Congresses. They are facing the highest tax rate and acting within the confines of US tax law. - Streator Curmudgeon - Thursday, Jul 31, 14 @ 4:25 pm: When I go in Streator’s Walgreen’s Sunday morning, after their coupons have run in the Saturday newspaper, it’s filled with blue-hairs wandering around, leaning on their carts. These are the kinds of folks who are still die-hard patriots. Walgreen’s is making plenty now. Moving to Switzerland to avoid taxes seems greedy. - Jimbo - Thursday, Jul 31, 14 @ 4:29 pm: I’m thinking the tax dodge issue may be something team Quinn has in their arsenal. They might be stoking public anger about this in a lead up to some ads about Rauner offshoring or using loopholes. Rauner’s cheekiness on the subject leads me to believe he’s got some skeletons in his closet with respect to this issue. Just a guess. - How Ironic - Thursday, Jul 31, 14 @ 4:32 pm: @Adam Smith “If I move to another community to access better schools for my kids, or safer streets can I be forced to keep paying extra taxes for the community I leave?” Yes, if you “move” out by getting a PO box in the town over, but continue to send your kids to the same school, utilize the fire department when you house is on fire, call the police when you need them, drive on the same roads as you always did, and continue to receive tax breaks and corporate welfare as you always have…then yes…you should. - Last Bull Moose - Thursday, Jul 31, 14 @ 4:32 pm: @Walker. I agree that fiduciary duty extends beyond maximising short term profits. This would be a change to improve long term profitability. They may decide that staying put makes the most sense because of other factors. But it is now a hard judgment call. - Anonymous - Thursday, Jul 31, 14 @ 4:37 pm: –The U.S. corporate income tax rate is the highest in the industrialized world.– Seriously, dude, you think those armies of high-paid lawyers, accountants and lobbyists don’t know how to work it? You think the corporate tax code is one line in a book? From Forbes: –Despite all their griping about the U.S.’s highest-in-the-developed-world 35% federal corporate income tax rate, big profitable U.S. companies paid just 12.6% of their reported worldwide profits in federal income taxes in 2010, a study released today by Congress’ Government Accountability Office shows.– http://www.forbes.com/sites/janetnovack/2013/07/01/gao-big-companies-paid-a-12-6-federal-income-tax-rate/ - Yellow Dog Democrat - Thursday, Jul 31, 14 @ 4:56 pm: I voted Lighten Up on Walgreen’s. I consider Donovan Pepper a friend. Besides, Quinn should be pounding Rauner into the sand for defending Walgreen’s. Actually, Rauner wasn’t merely defending Walgreen’s, but arguing the US shouldn’t hold corporations accountable. - Wumpus - Thursday, Jul 31, 14 @ 4:58 pm: @so, thanks for the info. - forwhatitsworth - Thursday, Jul 31, 14 @ 4:58 pm: Enjoyed “Walker’s” insights at 3:39! - A guy... - Thursday, Jul 31, 14 @ 5:05 pm: Demo, sell that crock to every small community and neighborhood that couldn’t get any business to move in and Walgreens did. Even added produce in certain stores. Didn’t gouge to make up for higher operating expenses. They’ve been a great corporate citizen. This strategy is dopey with a capital D. - forwhatitsworth - Thursday, Jul 31, 14 @ 5:05 pm: I hope that the Walgreen’s decision-makers take into consideration what impact the PR backlash might have on consumer demand compared to the supposedly more favorable tax situation. - Original Rambler - Thursday, Jul 31, 14 @ 5:27 pm: Is this the same Walgreens moving into the ground floor of the Thompson Center, where Quinn will get to see them every day he shows up for work!?! - Arthur Andersen - Thursday, Jul 31, 14 @ 5:34 pm: Deeply in the minority here, but I would lighten up. I know a number of seniors who are as close to their pharmacist as they are to their doctor, and they love Wally’s. They might not understand inversion, but they understand messing with their pharmacy and they won’t like it. #getarefillBrucey - wordslinger - Thursday, Jul 31, 14 @ 5:35 pm: OR, it is the same Walgreens that got a $47 million state package for renovations at its corporate headquarters two years ago. http://www.tradeandindustrydev.com/Industry/Bio%20%2526%20Pharmaceuticals/news/il-walgreens-adds-500-jobs-spurs-economic-growth-n-6790 - Rich Miller - Thursday, Jul 31, 14 @ 5:37 pm: I rarely weigh in on questions, but I’ll belatedly say I’m with AA on this one. - Norseman - Thursday, Jul 31, 14 @ 5:44 pm: Good point AA. - Rich Miller - Thursday, Jul 31, 14 @ 5:45 pm: ===sell that crock to every small community and neighborhood that couldn’t get any business to move in and Walgreens did=== And I agree with a Guy. lol - Toure's Latte - Thursday, Jul 31, 14 @ 6:17 pm: It would be good if Quinn and the DCEO are talking with W and not Quinn yelling about them. Have no idea of the consequences, how much tax dollars they’d save, or exactly how inversion differs from leaving, but I voted he should lighten up. Honey, not vinegar. - Budget Watcher - Thursday, Jul 31, 14 @ 6:22 pm: I would keep up the harsh rhetoric on Walgreens, although that’s really all that Pat Quinn can do. I’d also make sure the public is aware of just how much business Walgreens gets from government funded programs such as Medicaid and Medicare. In Illinois Walgreens is far and away the top retail pharmacy chain for Medicaid, so they certainly don’t mind taking government money…they just don’t want to support the programs that they profit from. And, believe me their margins on Medicaid have always been very healthy. In fact, maybe Quinn could draw a parallel to others who profited from government business like pension contracts, but who balked when it came to paying social security and Medicare. - Belle - Thursday, Jul 31, 14 @ 7:09 pm: My Dr doesn’t care for Walgreens and encourages patients not to use them as a pharmacy. So, that is 2 reasons to email Walgreens and tell them that I am moving my Rx’s to the grocery store now. I’m against them moving the headquarters to Switzerland plus I feel it is disgusting that they are threatening to do it. - Judgment Day - Thursday, Jul 31, 14 @ 7:25 pm: “Rauner seems to have accidentally given Quinn a mirror and Pat is fighting with his own image like he is a parakeet.” …. And losing. ——————————- “Once again, people, if Walgreens were to complete this inversion, they would still be paying taxes on their U.S. operations. Their tax liability for their U.S. operations, every single store, would not be reduced by one red cent. What would change is they would no longer be paying Uncle Sam for profits that their overseas subsidiaries earned by selling products overseas to overseas customers. The United States is the ONLY industrialized nation that does this.” Finally, somebody gets it. - steve schnorf - Thursday, Jul 31, 14 @ 7:50 pm: Well, here’s one legal way to yank their chain Governor. Figure out how many Medicaid scripts the busiest family pharmacies in the state fill annually (probably around 8000) and reduce the dispensing fee for annual fills above that number dramatically, say by a couple of dollars. - Sunshine - Thursday, Jul 31, 14 @ 10:09 pm: I certainly understand their wanting to improve profits, but to abandon Illinois, and the US, could bite them on the ass in the long term. Stay and fight would be the right course but they choose to take the money way out. Not sure if I want them watching after my health? - Anonymous - Thursday, Jul 31, 14 @ 10:33 pm: don`t let-up on the greedy it`s about class warfare not corporate welfare - siriusly - Thursday, Jul 31, 14 @ 10:47 pm: Quinn is right. If they leave the country I will just shop at CVS. CVS may not be HQ here but they do have a major office with lots of jobs in IL too. I could forgive them leaving Illinois for another state. But no reason I should support a major US retailer leaving the US. I think this looks really bad for Walgreens. - 39th Ward - Friday, Aug 1, 14 @ 12:12 am: @so - “Once again, people, if Walgreens were to complete this inversion, they would still be paying taxes on their U.S. operations. Their tax liability for their U.S. operations, every single store, would not be reduced by one red cent. What would change is they would no longer be paying Uncle Sam for profits that their overseas subsidiaries earned by selling products overseas to overseas customers. The United States is the ONLY industrialized nation that does this.” Your comment is both accurate and understandable. I recommend it to all the commenters to digest before making any further comments. - Jimbo - Friday, Aug 1, 14 @ 8:36 am: We should all understand that after recent mergers, Walgreens HAS to do this, otherwise, those foreign profits would be taxed here and abroad. If those are the only profits they’re trying to protect, then I understand the move. I don’t like it, but I understand. If, however, they are suddenly going to show zero US profits because their supply chain is being altered to keep profits offshore, they’re no better than a common tax cheat, whether what they’re doing is legal or not. Regardless, I’ll shop at CVS in the future. Taxes are a percentage of profits. Much of those profits comes directly from federal programs. Refusing to pay your fair share of taxes in that scenario is pretty bad form. - VanillaMan - Friday, Aug 1, 14 @ 8:38 am: It amazes me how the people who love to tax seem to have absolutely no understanding about taxes. The comments made here are blazingly political and have no bearing on reality. Worse - we have two gubernatorial candidate just as freaking clueless. Rauner was wrong, but Quinn is worse in that he assumes Rauner is right, but he disagrees with him and is now arguing over it. Both candidates need to stop, look at us, and say, “nevermind!” - Anon. - Friday, Aug 1, 14 @ 8:40 am: ==And I agree with a Guy.== Time to get your prescriptions checked. - Jimbo - Friday, Aug 1, 14 @ 8:40 am: One more thing, to all of those complaining that the US taxes foreign profits and US profits and we’re the ONLY industrialized country that does this… We don’t have VAT. If you want to trade one for the other, I’m game. Walgreens woud be paying 20-30% on every item sold in the US if we went to a European style tax code. - North Shore Joe - Friday, Aug 1, 14 @ 8:55 am: =I know a number of seniors who are as close to their pharmacist as they are to their doctor, and they love Wally’s. They might not understand inversion, but they understand messing with their pharmacy and they won’t like it.= Old people are old, not stupid. They may like their pharmacist as a person but I don’t think their heart aches for billion dollar corporations whose operations after all, would be completely unaffected by this scheme. Silly thought process there, you guys. Sorry, comments for this post are now closed.