Senator Durbin is the second most powerful Democrat in the Senate. Illinois has the highest taxes in America so companies are leaving in droves. Time to whip out the thug card….
Score another victory this week for the Senate’s lead political thug, Dick Durbin. The second-highest-ranking Senate Democrat and lead political henchman coerced retail giant Walgreens to stay in Illinois and not move as planned to Switzerland.
The government’s intimidation campaign against Walgreens was so heavy-handed that it would make Richard Nixon blush. Walgreens was set to move in order to reduce its tax liability and avoid the 40 percent income tax rate it pays as an Illinois-based corporation. This would have saved the company and its mostly American shareholders an estimated $4 billion over five years.
But back in July Mr. Durbin sent an astounding letter to Walgreens CEO Gregory Wasson warning the company, and demanding that it abandon its plans to relocate.
He lambasted the company’s move as a “clever tax dodge,” and threatened that “deeply patriotic” customers would not “support Walgreen’s decision to turn its back on the United States.” He added, subtly, that “nearly all of your $2.5 billion in profits earned last year were from sales to U.S. taxpaying customers.”
That was followed by other threats of political retaliation. “Much of Walgreens financial success was built on programs and infrastructure provided by the U.S. government” and “the future success of Walgreens will continue to depend on U.S. taxpayers and government-funded programs.” Just in case Mr. Wasson didn’t get the point, he reminded him that “nearly 25% of Walgreens profits were from U.S-funded Medicare and Medicaid programs.”
Unfortunately, our elected officials in Congress now feel they have the political power to carry out these threats with impunity.
Now Mr. Durbin is celebrating the Walgreens shakedown. The big losers here were the shareholders — including thousands and thousands of middle class Americans — whose retirement funds include Walgreens stock. The stock fell in the 24 hours after the announcement by more than 10 percent and so shareholders lost at least $6 billion on the announcement. That’s a lot of financial wreckage from one single senator.
In case there is any doubt that Mr. Durbin’s threats were heard, the statement by Walgreens about why it was not moving after all was revealing. The firm cited big risks of “consumer backlash and political ramifications, including the risk to our government book of business.” In other words: We got your message, Mr. Durbin.