Letter: Walgreen met with official intimidation

A Walgreen Co. store in Chicago, Ill. on

A Walgreen Co. store in Chicago, Ill. on March 23, 2012. The company reported third quarter profits were up on June 24, 2014, but economists were disappointed. Photo Credit: Bloomberg News / Daniel Acker

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Unlike other industrialized nations, the United States taxes domestic corporations on profits made overseas, even though they are already taxed by the foreign country ["Keep the companies in this country," Opinion, Aug. 14]. In addition, U.S. companies are taxed at the highest rate among developed nations: 35 percent.

Columnist Anne Michaud wrote that the average effective corporate tax rate is 12 percent, but this figure is misleading, as it doesn't account for all taxes paid. President Barack Obama, and other members of the political class, have labeled corporations as unpatriotic when they merge with foreign firms to lower their tax liability. Michaud was also critical of corporate inversions.

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A company fulfilling a fiduciary duty to shareholders by maximizing profits -- which in turn benefits employees and consumers and strengthens the economy -- is far from unpatriotic. However, what is un-American is a U.S. senator threatening the future success of an American company. When Walgreen was considering an inversion, by relocating its headquarters to Switzerland, one of the most powerful U.S. senators, Dick Durbin (D-Ill.), wrote to Walgreen that nearly 25 percent of its profits were from government-funded Medicare and Medicaid programs.

The implication was clear: If you act in the best interest of your company, you'll risk losing 25 percent of your business. Durbin's campaign of intimidation was successful. As a consequence, Walgreen lowered its expected earnings, costing shareholders, employees and customers.

Margaret Read Federico, Massapequa
 

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