[Congressional Record (Bound Edition), Volume 160 (2014), Part 9]
[Senate]
[Page 12806]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               INVERSION

  Mr. REID. Mr. President, more than a century ago, a small drugstore 
opened for business in Barrett's Hotel in Chicago, IL. The pharmacist, 
not yet 30 years old, and a veteran of the Spanish-American War, 
borrowed $6,000 to open this drugstore. His name was Charles Walgreen. 
This was his first store but certainly not his last. As his chain grew, 
the pharmacies became a fixture in American culture--you know, the 
vintage image of a soda fountain, milk shakes, a drugstore counter. 
They would mix their own drugs to give pain medication and other 
products to people who came in that drugstore. This is how Walgreen's 
started.
  Now, 113 years later, the Walgreen family no longer heads the 
company. But there are over 8,200 Walgreen's drugstores around the 
country. They still bear the Walgreen name. That company Charles 
Walgreen started is reportedly strongly considering a renunciation of 
its American citizenship and a move to Switzerland. Why? To avoid 
paying their fair share of taxes.
  Reestablished as a foreign corporation, Walgreen's would pay a 
smaller share of taxes. This practice is called ``inversion.'' It is a 
tax trick, a loophole. Of course, Walgreen's will not actually move to 
Switzerland. Instead, they plan to acquire a European company and 
officially make Switzerland home to their new headquarters, but in 
reality they will stay in Chicago right where they are now. That is 
because Walgreen's does not want to actually leave America. Why would 
they? Why would they want to leave America? We have the most 
sophisticated workforce in the world. Why would they give that up? 
America has the infrastructure that, although in need of updates, is 
still the most extensive in the world. It provides Walgreen's with the 
roads and transportation it needs to supply its stores. Why would 
Walgreen's give that up?
  Why would they give up the fact that we have a legal system we can 
trust, that enforces business contracts and upholds intellectual 
property protections they need? They would not turn their heads and 
walk away from that. America has a Medicare system that pays for 
seniors to buy pharmaceuticals at Walgreen's. I am sure Walgreen's will 
not be turning away that cash; that is what it is, cash.
  Let's not forget that Americans enjoy a law enforcement apparatus 
that protects the company's assets. Why would Walgreen's want to give 
that up? Our military, which is second to none, will continue to 
protect the country where all of those Walgreen's stores are located. I 
am sure Walgreen's would not want to give that up. Not to mention the 
fact that America is a pretty good place to live.
  So why would Walgreen's executives ever want to move their families 
across the world? That would be foolish, would it not? Walgreen's 
leadership will probably stay right where they are now in their fancy 
homes in America. While they remain here, Walgreen's will still expect 
American tax credits, even as it dodges as much as $4 billion over the 
next 5 years in taxes. That is what inversion is all about.
  Essentially what Walgreen's is saying is we love America. We love 
being in America. But we are not going to pay for it. The dictionary 
defines the word ``exploitation'' as ``the fact of making use of a 
situation to gain unfair advantage.'' What a perfect explanation of 
what Walgreen's is going to do. What the Walgreen's company is doing 
sure seems like exploitation to me. After all, this is a corporation 
that made $16.7 billion from Medicare and Medicaid last year--$16.7 
billion--and they are going to move overseas.
  But, sadly, Walgreen's is not the only corporation jumping ship. 
Major American companies such as Medtronic and others have already 
announced plans to give up their corporate citizenship. Who will be 
next? A decade ago, the senior Senator from Iowa warned of 
``unpatriotic companies that dash stash their cash.'' Now we are seeing 
this dash-and-stash scheme become common practice for corporations that 
do not want to pay their fair share of taxes.
  In fact, the two largest transactions to move American companies 
overseas in history have taken place within the last month. When these 
companies reincorporate overseas, it is, simply put, unfair. It is 
unfair to the American taxpayer, to the American Government, and to 
many companies that refuse to engage in this deceptive practice.
  Why should other American pharmacy chains such as CVS Caremark and 
Rite Aid be disadvantaged because Walgreen's balks at paying its fair 
share of taxes? To uphold our free enterprise system and ensure that 
American businesses are competing on a level playing field, Congress 
must close this loophole.
  We have a new chairman of the Finance Committee. The senior Senator 
from Oregon is known to be a man who is fair and will make sure that 
people do not take advantage of others. He has made a commitment to me 
and anyone who will listen to him that this must change. It is going to 
start with the Finance Committee and start very soon. I have been 
encouraged by his statements. He has indicated he will work to close 
this loophole for these runaway companies.
  The chairman of the Permanent Subcommittee on Investigations, the 
senior Senator from Michigan, has also been leading on this issue. He 
has been talking about it for a long time. Two strong leaders--the 
senior Senator from Michigan, the senior Senator from Oregon--have 
locked arms and are going to do something about this.
  Senator Levin's legislation, the Stop Corporate Inversion Act, puts a 
2-year moratorium on inversions by U.S. companies. This moratorium will 
give Congress time to thoroughly and thoughtfully consider the issue. I 
do not need a lot more thought on it. I am ready to roll on this one. 
We need to get this done, and quickly. I will settle for the 2 years. I 
am frankly, though, open to all ideas. What I am not open to is the 
idea that this corporate exploitation of the American taxpayer is 
somehow acceptable, because it is not.
  Today we are considering legislation that would amend the U.S. Tax 
Code to fight outsourcing, protect American jobs, and create job 
creation within our borders. The Bring Jobs Home Act, which ends 
senseless tax breaks for outsourcers, will offer companies a 20-percent 
tax credit to help with the cost of moving jobs back to America. Much 
like the Bring Jobs Home Act, ending this corporate citizenship scam 
will encourage American companies to pay their fair share. It will also 
let corporations know that cheating the American people with their tax 
trick is not a viable business plan.
  Benjamin Franklin said this: ``Tricks and treachery are the practice 
of fools, who have not wits enough to be honest.'' If corporations want 
to leave America, it is their right. But American taxpayers should not 
be forced to foot the bill when U.S. companies want all the benefits of 
commerce in this country without having to pay their fair share.

                          ____________________