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Medtronic buys Irish company, gets much lower tax bill

Taxes in the ‘Kingdom of Heaven’; $13.5 million for ACT testing; All-Star Game fans balk at prices; and more.

Apparently, fleeing to South Dakota was not an option. Michael J. De La Merced of the New York Times reports, “Medtronic agreed on Sunday to buy Covidien for $42.9 billion, combining two of the world’s biggest medical device makers and helping it gain access to cash held overseas. The deal, which is being structured as a so-called inversion, will relocate Medtronic from its headquarters in Minneapolis to Covidien’s corporate home in Ireland, where the tax rate is significantly lower than in the United States.”

The Reuters story says, “The Minneapolis-based company said the move was not driven by tax considerations, pointing instead to medical technology synergies with Covidien. … Medtronic said it would keep its operational headquarters in Minneapolis and pledged $10 billion in U.S. technology investments over the next 10 years. … Democrats in Congress have called for new restrictions on these deals. …”

In the Strib, Mark Brunswick and Joy Powell write, “Medtronic told the governor it intends to create more than 1,000 new medical technology-related jobs in Minnesota during the next five years … .” and that “the Medtronic-Covidien deal will make the combined company a ‘cash machine,’ with an estimated $7 billion in free cash flow annually … .”

Speaking of dodging taxes … . Stribber Paul Walsh tells of an Anoka woman invoking her proximity to a higher authority. “A Twin Cities woman has pleaded guilty to dodging income taxes for many years in connection with her family excavation and sewage-treatment business, when she claimed she and her husband were not U.S. citizens but permanent residents of the ‘Kingdom of Heaven’. … The plea agreement noted that the tax revenue lost for years 2003 through 2007 topped $530,000.”  

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Looking at primary fights in both of the main parties, Baird Helgeson of the Strib says, “Political parties are under increasing urgency to maintain their relevance in an era where money is moving to outside interest groups and candidates can find paths to victory that don’t always go through the establishment. … An August defeat of the GOP’s endorsed gubernatorial candidate would be another setback for a party still digging out from a mountain of debt and attempting to reimpose a measure of party discipline.”

The State will pick up the $13.5 million tab for ACT testing of all middle- and high-school kids. Says Christopher Magan of the PiPress: “The ACT-developed tests come after the 2013 Legislature approved a measure requiring districts to make sure students are prepared for higher education or the workforce before leaving high school. The new test will replace exams students had to pass before graduation that were eliminated. The exams are in addition to the Minnesota Comprehensive Assessments, or MCAs, that students in third through 10th grade take each year to measure proficiency in English, math and science as required by federal law.”

The GleanBut I keep hearing that stimulus thing was a complete waste … . Shannon Prather of the Strib says, “Minneapolis, St. Paul and Brooklyn Park have spent nearly $70 million in federal stimulus money to remodel, sell or demolish more than 1,000 distressed homes and rental properties in the wake of the housing bust and foreclosure crisis that gripped many neighborhoods during the Great Recession. The once-in-a-generation pot of money has yielded some dramatic results.”

Why would anyone think it’d be cheap? At MPR, Peter Cox files a story about fans upset at the prices of All-Star Game activities. “On her way into a Twins game earlier this month, Tammy Sly of Minneapolis said she’s not ready to shell out hundreds of dollars. ‘It’s not fair, it should be for the fans,’ she said. ‘We paid for this stadium as taxpayers and we should get to go to the game.’ According to a letter sent to Twins season ticket holders, the package of the game plus events started at around $400 and went as high as $1,400.”

Maybe it’s a question of what the meaning of the word “take” is … ? Catharine Richert at MPR’s fact-checking desk writes, “Marty Seifert has issued a challenge to Gov. Mark Dayton: refuse campaign contributions from lobbyists. Seifert says he’s never taken lobbyist contributions and wants Dayton, whom Seifert hopes to unseat this fall, to do the same. … Seifert has taken contributions from at least two lawyers who work for the well known lobbying and legal firm Lockridge Grindal Nauen: Charlie Nauen and Joseph Bruckner each gave Seifert $200 in 2004. Additionally, Seifert has taken large sums of money from interest group, corporate and lobbying firm political action committees.” But then he probably doesn’t want to challenge Dayton to a self-funded campaign.