St. Paul Pioneer Press: Medtronic’s Covidien Deal Spurs Debate about Corporate Taxes

By Christopher Snowbeck, June 17, 2014

Is Medtronic’s massive international corporate merger a billion-dollar tax dodge, an indictment of the U.S. tax code or a business-savvy work-around that could spur investment and growth in the Twin Cities?

The answer depends on whom you ask.

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As of last year, Medtronic had about $20.5 billion in undistributed earnings from non-U.S. subsidiaries. It’s unclear whether U.S. taxes are owed on the sums, but if so, the merger might provide a chance to get out from under the burden, said Matt Gardner of the Institute on Taxation and Economic Policy in Washington, D.C.

The deal could lighten the company’s future tax burden, Gardner said. “In the long run, we’ll all have to pay higher taxes to pay for what Medtronic is doing,” he said.

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