Medtronic renounces US tax citizenship

Back in 2007-2008 when I was 20, I did a lot of work on the new Medtronic headquarters that was being built in Mounds View, Minnesota. I was part of a team that was in charge of basically installing the entire IT infrastructure in the building. Definitely a huge task, but was very fun and interesting to see the whole building in and out during the contract.

I remember being in awe of the building in general, and also wondering why they needed many of the luxurious marble floors, waterfall type fountains, etc..that were inside. I also remember reading an article at that time that stated how the city of Mounds View provided 23 million dollars in tax payer money for the project. I thought to myself, why does such a well off company with billions of dollars need tax payer money to build their own building?

Now I just came across this article and it really bothered me.

www.bloomberg.com... edtronic-is-biggest-firm-yet-to-renounce-u-s-tax-status.html

This company with billions of dollars that received help from US tax payers many times to build their own buildings, now is going to renounce their US tax citizenship? How morally bankrupt are these corporate b@$+@rd$ these days? They owe the US, and Minnesota a lot of their success. The US gave them the chance to thrive in a safe and advanced environment for 60 years, but now they want more $$.

I am disgusted by this trend. Having personally worked on the HQ, and being a longtime resident of MN where Medtronic was created, I am saddened at the amount of greed being shown here.

a reply to: Euphem

This is happening and has been happening all over in every industry. What Americans really need to understand is our government as it stands nowadays is run by sellouts. Our politicians will cater to whoever lines their greedy pockets and most of the time it's big business, big corporations. But what are we going to do about it? I work in healthcare. I take care of people that depend a lot on Medtronic products? I have a friend that is a sales rep for that pathetic company. America is done. I don't see how we will ever recover from the crony capitalism corporate welfare state that is plaguing our nation and our society. I just don't. My job unfortunately relies on Medicare in a huge way. I work in an acute care hospital. I hate that fact every day I go to work. I hate how government and private scamming insurance companies control one of the most important aspects of our lives. But I also hate how everyone just goes along with it. Including the vile, scum that are most doctors.

What's funny is I work for a "not for profit" catholic hospital and you should see their corporate offices. Exactly what you described. Marble tile, fountains, brand new high end fixtures. Meanwhile the system is cutting staff and taking away perks and benefits. So as someone who believes in REAL capitalism and the free market do I capitulate and join the union???????? My livelihood comes first. These corporations don't give a crap about us. Why should I care about them? Why should I care about the taxpayer? I AM ONE!

I don't know the details of this, and you aren't really providing them, either. When you say the company was subsidized by taxpayer dollars in Minnesota, the question is: Did Minnesota get its money's worth or not? There had to have been some sort of cost-benefit analysis done by the State as well as the company. In theory, at least, the company provided benefits for the tax breaks in excess of the money they got. How many Minnesotans got jobs and paid their own taxes as a result of this? How many OTHER jobs were created in the infrastructure to "host" the company? Indeed, where did those marble floors come from? Who was paid to quarry the stone, transport it, and install it? Sure the corporate shoes are walking on it, but who made the money putting it in? The company? I don't think so.

Further, we're talking US taxes vs state taxes. How does that all play out? The company can't just say, "We're not paying US taxes any more any more than a foreign citizen working in the US can opt out of US taxes. It doesn't work that way.

So if the company "paid its dues" for the tax breaks it got, then the "loan," as it were, is fully repaid. That they are in a dispute with the IRS does not mean they screwed over Minnesota. There are way too many gaps in your story to pass judgment here. My guess is you didn't research it beyond reading a couple of stories in the MSM. But, as is usual on ATS, corporations are guilty until proven innocent.

a reply to: schuyler

No need to attack me. I didn't know I needed to provide all those details for you. You sound like my wife when I can't read her mind and she gets mad at me for it.

Are you not capable of doing a Google search on your own? There was no increase in jobs as it just consolidated 6 facilities around the twin cities into one location.

Sure there were jobs created temporarily like mine for example, but I don't see what your point is. This building allowed them to be more efficient, and save money over time

TIF which stands for Tax Increment Financing was used, which you can try to justify any way you want, but isn't a loan. It basically just increases property taxes on city residents and uses that to fund certain projects. No matter whether you agree with it or not, it is still an increase in taxes on the tax payer.

Thanks for contributing so kindly to the thread!

a reply to: Euphem

makes as much sense as using public money to build a sports stadium when the team wanting the facility pays their players in excess of a 100 million dollars in a contract.

If they renounce their tax citizenship and their buildings are built with public money then the public should have the right to seize assets to compensate for the loss.

This is one of those areas where I think a standard corporate global tax could help.

a reply to: Xcathdra

Very true...although new sports stadiums will attract people from around the country who wouldn't normally travel for a game to actually go. As well as increased overall economic activity for the city...but I doubt it is significant enough to offset the tax payer dollars.

I think with the amount they are charging for tickets/parking/merchandise/food etc...they could lower the prices for the people who subsidized the stadium for them. Or just pay for it themselves for goodness sakes....Poor billionaires/millionaires not making enough money playing a game they love!

It must be so hard to go to work everyday loved by millions of fans, playing the game you loved growing up. Poor guys!!

A global tax is a decent idea, but I think it is too complicated given the vastly different economies around the world. I just wish people would quit being so fuc*#@g greedy for once and just pay their fair share.

a reply to: GreenMtnBoys

Well I wouldn't include doctors in your argument. Sure there are plenty of douche bag doctors, don't get me wrong. Especially specialists! They have been exponentially increasing their costs over the years, and are purposely using specific tests/procedures that make the most money, regardless of whether it is appropriate for the patient.

Family doctors on the other hand are overworked, under-payed, and overall abused in the medical industry. Same thing with most nurses...they are made to work crazy schedules, forced to work overtime, and under-payed in general given the # they have to put up with.

So it comes back to the people who do the most work getting payed the least. Very similar to every other industry around the world.

originally posted by: GreenMtnBoys
a reply to: Euphem

I don't see how we will ever recover from the crony capitalism corporate welfare state that is plaguing our nation and our society.

I'm from Australia but in about 1972 thereabouts, I read a Time Magazine article on corporate welfare in the US. It was an eye opener which I did not realise it at that time but these days I realise the significance of it. Even Time Magazine admitted that they themselves were recipients of corporate welfare. This is how long its being going on but it has taken a few decades for corporate welfare to finds its way into the media to the minimal extent it does today. This causes me to wonder just how endemic it has become and what will it take to put a stop to it.

During this time the corporate tax rate in Australia has fallen from 60% in 1969 to 30% and falling today. Like you I ask where is all this headed.

Taxing share trades is the only way to make corporations and the rich pay tax.

I haven't read the article, but I was wondering if they can renounce US tax citizenship, without actually leaving the US?

Also, I would like to know how an actual citizen might do the same considering a corporation has the same rights as a citizen, and a citizen is also considered a corporate entity as a "straw man" for tax purposes.

Let us do as the corporations do, as they are the ones that benefit from our government, not the lowly and powerless "nobody" citizens. I want to be a corporate entity, where do I sign up for the operation? I hear it is like getting a sex change. Will Obama Care pay for it?

a reply to: MichiganSwampBuck

I'm wondering the same thing? My assumption is that they are moving their HQ to another country, thus they wouldn't be subject to income tax here in the US. Obviously the products they sell here would collect sales tax, and employees here would pay income tax still. If there is a way to simply say "I'm not paying income tax anymore, so there!" I'm all for spreading that knowledge, lol. But like I said, I assume they are moving their HQ to another country...

a reply to: XTexan

You can do what these companies are doing, and not pay taxes, but unlike them you will get arrested and thrown in prison for a longggg time

a reply to: Euphem

My issue with the sports teams goes beyond fans / economic bump though.. As an example -
2012 - Why Does the National Football League Deserve Tax-Exempt Status?

If they are not paying taxes and are considered non profits why are we using tax payer money to further enlarge their profit margin? This is another example of why businesses / corporations should not be allowed to lobby lawmakers, not to mention the little people cant compete with donations. money as free speech is an argument for another thread though...

As for the tax for the most part its straight forward. Canada recently changed their corporate tax rate to somewhere in the 20% area, where as the US is around the 30% mark.

If locations want to offer enticements to attract the business that's fine (with the exception of tax breaks). However, the flat corporate tax at the global level should remain and should not be worded in a manner as to allow loopholes. Use the tax funds to assist in building / maintenance of the needed infrastructure to further drive economic development.

If a business is going to receive public assistance then there should be language included that prohibits the company from bolting the moment they turn a profit.

I agree about the greedy comment however since we allow our government to wheel and deal with business by remaining silent we are creating the greedy environment.

originally posted by: Euphem
a reply to: XTexan

You can do what these companies are doing, and not pay taxes, but unlike them you will get arrested and thrown in prison for a longggg time

originally posted by: learnatic

Taxing share trades is the only way to make corporations and the rich pay tax.

For those companies that are publically traded sure. what about the ones that are not?

It goes beyond taxes and a lot of people don't consider the following -

In addition to tax breaks given by the city / county / state / province / etc -
* - breaks on water use / electrical use
* - Cost to upgrade surrounding infrastructure (roads / electrical / sewer / water)
* - Creation of a TIF Districts
* - Anti competitive behavior

Just a few areas that come along with the corporate welfare programs. For the most part all of the above are passed on to the citizens via tax increases to offset to lack of tax from the business.

Bait and switch at its finest...

originally posted by: Euphem

How morally bankrupt are these corporate b@$+@rd$ these days? They owe the US, and Minnesota

Folks like you tend to disregard what these companies have already given to society as a whole - even before paying their taxes - through their products. I always hear how companies supposedly "owe" something to us and need to give their "fair share". As far as I`m concerned, they have given their share by adding to modern society as we know it. They don't owe me anything.

a reply to: Skyfloating

Their contribution to society does not elevate a company to god like status though. The US and USSR can make that same argument when it comes to space exploration however it does not mean that the initial contribution should exempt the US / USSR / Russia from responsibility towards the tax payers who funded those initial projects.

When a business asks for and receives / agrees to accept an offer in order to build a business in a certain area the business should be held accountable in terms of return on investment.

The success of a business could very well be because of the incentives. A business that is successful because of those "breaks" should not just pack up and leave for somewhere else to avoid paying taxes. A decent number of companies who have received tax deferments for a decade have at times packed up and left prior to the end of the tax break to avoid paying taxes.

If a business operates in the US, they should pay taxes just like everyone else. Just because you move your corporate headquarters to China or Ireland should not exempt you from paying taxes on your assets in the US or Germany.

I am currently employed by Medtronic. Your link to the Bloomberg news article does not go anywhere, but I have a suspicion what you referring to is Medtronic making Ireland their financial reporting center. This was part of the structured deal for Medtronic to purchase Covidien as they are based out of Ireland. The Medtronic buildings and employees in Minneapolis are not moving to Ireland. This would not have occurred if it wasn't in the structured deal. Covidien was not willing to move their financial reporting to the U.S. Why should they? They have been based in Ireland and have a lower tax rate there.

Medtronic Aquires Covidien for $43 Billion

Medtronic announced on Sunday that it has agreed to acquire Irish medtech firm Covidien for $42.9 billion in cash and stock. The purchase is the largest acquisition of a foreign firm by a U.S. company, based on Standard & Poor’s Capital IQ data.

On the upside, the deal will leave roughly $10 billion for Medtronic to invest on R&D in the United States over the next decade.

The acquisition has been termed as a “tax inversion" deal, which will help Medtronic lower its tax burden. Medtronic will be the biggest company in the United States to reduce its tax liabilities by moving its headquarters offshore.

a reply to: Skyfloating

Who made the products? Who came up with the ideas? A company requires a team of people to be successful. Unfortunately, only a few people benefit from the success of a company.

Rather than reward the employees that helped make the company successful, they tend to only reward themselves instead. This is true in almost every company these days.

So again, what do we owe them?