Our friends from Billings gaze lovingly on Sioux Falls and conclude that the Minnesota-esque policies of adding a tax and building infrastructure are good for economic development. But even if you think South Dakota's low-taxes philosophy still gives us an advantage over Minnesota, we still can't compete with Ireland. Rather than uproot, Medtronic is staying in the beautiful Twin Cities, paying $42.9 billion to acquire Irish surgical-device maker Covidien, and simply moving its headquarters on paper to Dublin to get a lower corporate income tax rate.
But wait: the boss says taxes aren't the prime mover here:
While the deal will allow Medtronic to reduce its overall global tax burden, the Minneapolis-based company said it was driven by a complementary strategy with Covidien on medical technology rather than tax considerations
"The real purpose of this, in the end, is strategic, both in the intermediate term and the long term," Medtronic Chief Executive Omar Ishrak said in an interview after the deal was announced. "It is good for the U.S. in that we will make more investment in U.S. technologies, which previously we could not."
Medtronic's corporate tax rate, now at around 18 percent, won't change much, Ishrak said [Susan Kelly and Greg Roumeliotis, "Medtronic to Buy Covidien for $42.9 Billion, Rebase in Ireland," Reuters, 2014.06.16].
Maybe Medtronic's CEO is just trying to downplay the the unpatriotic business of trying to dodge taxes. But he and his 8,000 employees will stay in Minnesota and keep paying Minnesota state income taxes, as will the 1,000 new workers Ishrak says Medtronic will add in the next five years.
http://www.forbes.com/sites/taxanalysts/2013/11/06/if-ireland-is-not-a-tax-haven-what-is-it/
Korporate tax rate in Ireland is 12 or 12.5%.
The Minneapolis Strib led the business section with this news. The article is here:
http://www.startribune.com/business/263226181.html
They think taxes DO play a role in this deal. The story leads with this:
"Medtronic Inc. will pay $42.9 billion to acquire the Irish surgical-device maker Covidien, leading it to relocate its official headquarters to Ireland from Minnesota to take advantage of substantial tax benefits.
The Minneapolis Strib led the business section with this news. The article is here:
http://www.startribune.com/business/263226181.html
They think taxes DO play a role in this deal. The story leads with this:
"Medtronic Inc. will pay $42.9 billion to acquire the Irish surgical-device maker Covidien, leading it to relocate its official headquarters to Ireland from Minnesota to take advantage of substantial tax benefits."
Later:
"Sen. Al Franken issued a statement Monday saying that, while Ishrak told him more jobs would result in Minnesota, moving abroad could result in a loss to taxpayers. "This needs careful scrutiny, and I plan to take a very close look at the specifics in the coming days," Franken said."
"Both Medtronic and Covidien already pay well below the U.S. corporate tax rate of 35 percent. Covidien’s tax expense in the latest three full fiscal years ranged from 14.7 percent to 21.1 percent. And Medtronic’s tax rate ranged from 17.3 percent to 18.4 percent in its last three fiscal years."
If it's not about taxes, it's curious that there is so much talk about taxes.
Time for US businesses to boycott Medtronic because they shift tax costs to others. Same for Apple.
MinnPost is a local online news source. It's staffed by first rate reporters who were downsized from the two big dailies. They are veterans of the genre. "The Glean" is a daily section that summarizes other MN news sources.
The point of all that explaining is to introduce the quote. It's the way Brian Lambert describes the Medtronic/Covidien deal. I'm sure you'll enjoy it. Daugaard and his pals may not. Take a look for yourselves.
http://www.minnpost.com/glean/2014/06/medtronic-buys-irish-company-gets-much-lower-tax-bill
Here is the latest about Medtronic's tax evasion scheme:
http://www.startribune.com/business/263385221.html
No one is buying the It's Not About Taxes tall tale.
The good ol USA has one of the highest corporate tax rates, you can't blame companies when they get gouged by their own government. Ahh liberal socialists at their best. Why no article regarding the "poor" Clinton's and their use of blind trusts to avoid higher taxes. Kettle meet pot.
0% tax rate is high only to divorced from reality wingnuts. Blind trusts are legal-skipping korporate tax liabilities isn't. But then your side is all for law abiding until you are against it.
Medtronic has been paying federal taxes at the rate of 16-17%. Not too bad. Their profits are measured in the $billions. I'm not crying too many tears for their stockholders. Any sobbing I do is for child whose family can't afford Medtronic's latest stent. In my mind that is more worthy of tears than the aborted blastocyst.