WEST PALM BEACH -- In case you haven't heard, corporations are people.
It's all the rage these days. Free speech. Religious freedom. Rights once reserved for people are now being extended to corporations.
Well, if we're going to treat corporations like people, let's look at the essence of what it means to be an American: citizenship.
This month, the U.S. Foreign Account Tax Compliance Act, (FACTA) goes into effect. It's a way to recoup would-be tax collections from Americans who have been hiding money in foreign banks. The United States taxes its citizens on the money they earn anywhere in the world.
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FACTA requires foreign banks to disclose American-citizen-owned accounts over $50,000 to the Internal Revenue Service or face a 30 percent withholding tax.
So far, this effort has unearthed about $10 billion concealed by Americans in Switzerland's two largest banks, UBS and Credit Suisse.
It also has led to record numbers of dual-citizenship Americans living abroad to give up their U.S. citizenship as a way to reduce their tax exposure.
The downside to renouncing your American citizenship is that it might keep you from visiting America, according to a largely unenforced provision in federal law.
An amendment to the U.S. Immigration and Nationality Act allows the government to deny re-entry to any former American who renounced his or her citizenship to avoid paying taxes. The so-called Reed Amendment was advocated by former-U.S. Rep. Jack Reed of Rhode Island, who explained it to Congress this way:
"I would hope in the future if those very slick and smart tax lawyers advising their clients about how to avoid their taxes suggest expatriation, they should also indicate very clearly that the consequences are you cannot return at will to the United States."
If corporations are people, shouldn't they also be subject to the Reed Amendment?
Consider Walgreens, the American drugstore chain that operates in 50 states with $72 billion in annual sales and $2.5 billion in profit.
Walgreens is taking steps to renounce its U.S. citizenship. Currently, the chain is headquartered in Illinois, a state that has given the company about $46 million in tax breaks.
But recently, Walgreens has merged with Alliance Boots, a pharmaceutical wholesaler that moved from Great Britain to Switzerland to lessen its tax bill. Merging with the company allows Walgreens to claim it is a Swiss company while actually making most of its money in America.
The maneuver, known as "inversion", allows American companies to reincorporate to tax-haven countries if 20 percent of its stock is owned outside the United States. It's called an inversion because the American company becomes a subsidiary of the smaller foreign company, even though the merged company is actually controlled by the shareholders of the original U.S. corporation.
Walgreens is expected to decide by the end of the summer if it will move its headquarters to Switzerland.
"We've never been a proponent to pay more taxes than we have to," Walgreens Vice President of Investor Relations Rick Hans told investors this spring.
If Walgreens goes through with the inversion, the expatriation would reduce its effective tax rate from 31 percent to about 20 percent, according to estimates by equities research firms. Walgreens would still pay U.S. taxes on its American sales, but with a combination of lower tax rates and cost and earnings shifting made possible through the merger, the company would pay about $4.6 billion less in U.S. taxes over the next five years.
All for a company that derives about 23 percent of its business from U.S. government-paid Medicaid sales, according to Americans for Tax Fairness.
"It's only right that a company depending so heavily on taxpayer-funded programs should pay its fair share of taxes on that income," the group wrote.
But I would go beyond that: It's only fair that if corporations have the same rights under the law as people, then corporate citizenship should be treated the same way as individual citizenship.
If people who renounce their American citizenship are subject to losing their right to step foot again in this country, why aren't businesses renouncing their American corporate citizenship treated in a similar way?
After all, if corporations are people, it ought to be about more than buying elections and keeping women from getting birth-control medication.
Frank Cerabino, writes for The Palm Beach Post. E-mail: email@example.com.