I’m Not Mark Cuban… But

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Mark Cuban, outspoken owner of the Dallas Mavericks, TV shark and luckiest Internet bubble buyout recipient ever made news with a tweet early this morning.

Cuban is talking about corporate inversions. That’s where a large company buys a smaller company then adopts its favorable headquarters location for tax purposes.

It doesn’t move. It just declares this new place its HQ. By virtue of this paper shuffling they stop paying most federal taxes!

Cuban will sell their stock.

I can’t do that. I own no common stock. However, I pledge to stop supporting businesses that do this.

I’m talking to you Walgreens!

From the Wall Street Journal:

Walgreen is currently thinking about leaving American shores, as part a plan to buy the rest of Alliance Boots GmbH, which operates a U.K. drugstore chain and is based in Switzerland. The move could help Walgreen lower its U.S. tax bill saving the company hundreds of millions of dollars a year—money that wouldn’t flow into the U.S. Treasury.

That’s my prescription bottle at the top of this entry. Walgreens–it will be my last and I’ll absolutely join the boycott of your stores which will surely follow.

I’m not concerned whether your move is legal. I just know it’s wrong.

8 Responses to “I’m Not Mark Cuban… But”

  1. I agree with you Geoff.

    That said – considering we have the highest corporate tax of any industrialized nation, maybe we should take a look at that as well.

    Our high U.S. tax rate is also responsible for the difficulty American companies encounter when they try to re-patriot their overseas profits. When they’ve already paid taxes in whatever country where they made the profits, charging them again amounts to double to double taxation which in turn encourages the firms to leave the funds in place elsewhere.

    • Geoff Fox says:

      Doug – I’m not going to debate this here. It costs more money to do business in the United States because it’s worth it. We live in a society where the successful benefit greatly, while the unfortunate live hidden away. I feel we have a significant obligation to the needy. No one’s choosing ‘the dole’ because it’s a cushy life.

      If, instead of $220 million Mitt Romney’s fortune was $175 million (with that $45 million going to help the needy) clocks would still tick.

  2. Amy Etkind says:

    Amen, Geoff! I’m with you and Mr. Cuban.

    Doug, NO corporation pays its full tax bill. Neither do most people in the top income brackets. Some of the largest don’t pay any taxes at all on income and profits. They use a variety of stunts to get that zero balance, and sometimes a fat refund. GE, for example, files ONE tax return among ALL its businesses. And they intentionally own some that are less than profitable, because they can claim that loss against the gain in their more profitable businesses. That’s not their only stunt, but it’s one way of avoiding taxes. And governments don’t help matters, offering tax free zones for a decade or two at a time. NY has a program where a “new start up” (whatever that can be twisted into meaning) pays no income, property or sales taxes for a decade. And guess who picks up the slack? We do. We pay for the roads, rails, bridges, schools, water, police and fire service these companies can access as needed. So, either your own property tax goes up or your services fall into disrepair. Allow me to also point out that the top marginal tax bracket for businesses and individuals was around 90% under Eisenhower, hardly a leftist, commie, whatever, President, and we were the envy of the world with our schools and healthcare and infrastructure. AND we had a balanced budget! (He was the last Republican to pull that off, by the way) Heck Ike even built the Interstate Highway System. And guess what? The rich were STILL rich and GOT RICHER! The middle class was booming and people were genuinely better off. Now, the top MARGINAL rate on individuals and families is 35-38% and our roads and bridges are on the verge of collapse. Our schools are crumbling. Literally crumbling. In some communities, police and fire service are but a fond memory. Wages for the bottom 80% are stagnant and have been for a long time. A college degree is no longer a guarantee of a middle class life, even in fields that used to be high paying. Between the student loan debt you have to take on and jobs still being outsourced, it’s barely worth it in most fields. If two lawyers in their early 50′s only just finished paying off student debt about a decade or so ago, how long for the new lawyers and doctors to pay off theirs? That’s why there are so few primary care doctors, except in residency programs, because it pays much less than a specialty and paying off a million dollars in school debt would take two or three times as long as a PCP than, say, an endocrinologist or cardiologist. What’s wrong with this picture?

  3. Al Bruhn says:

    Thanks Geoff for presenting this issue to us as I’m a big user of Walgreens in Ridgefield and love its 24/7 operation in nearby Danbury. But, I’m too baffled about off shore investments in US by citizens or businesses as you stated with Walgreens. First, it’s been my understanding that it’s illegal ever since someone at Comcast suggested I do it. When presented to me then, I automatically rejected it thinking that anyone who engages in off shore investments is in violation of US IRS laws. It appears that it’s legal from your posting and that SHOCKS me. The twist of irony with me is that I had all my prescriptions transferred from CVS in Ridgefield to Walgreens in Ridgefield just a short time ago and I was only member of my family to do it. I was STRONGLY dissatisfied with CVS prescription distribution center. And, I was pleasantly surprised with Walgrees MORE than hospitable ways with me concerning doctors who prescribe drugs that are not needed or cause questionable side effects and staff at Walgreens who alerted me to this situation. That plus staff clipping out a feature News Times article on me and giving it to me last fall. So, I’m in a peculiar/paradoxical situation regarding this matter. I wish it was as easy as it’s illegal for Walgreens to do what it intends to do off shore.

  4. Reuben says:

    Geoff,
    I find it hard to believe that you do not own any stock. The Dow and S&P having been hitting record highs and you are missing the party! You are too young a man to not have a portion of your money in the market. I urge you to reconsider your financial plans.

  5. Mari Bonomi says:

    I’m with you on this one, Geoff.

    And your blog post reminds me that I need to check on other companies with which I do business in order to take the same action.

    I also think we need to let companies know why we’re no longer doing business with them.

  6. 793tango says:

    The irony is that while CORPORATIONS can relocate overseas and save tax dollars, U.S. citizens living abroad STILL have to file a tax return and pay U.S. taxes on their income as well as being taxed in the country they’re living/working in. That’s why so many ex-pats are giving up their U.S. citizenship.
    But it’s perfectly OK for corporations to do it. What’s wrong with this picture?

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