The first thing we need to do is outlaw corporations......think about it......
3
All these big companies, they write off everything...
5
Oh, this is a good thing! When they move overseas and don't have to pay those terrible US taxes, they'll lower their prices on their drugs. Right? Right?
10
It is about time to publish the names of Belt Way politicians who have received donations from Corporate Gordon Gekkos and their voting records.
9
1. Boycott Pfizer/Allergan
2. Email them and explain why you will never buy their products again.
2. Email them and explain why you will never buy their products again.
7
The solution is simple.. Lower our corporate tax rate down to reasons levels, and you won't have companies running for Ireland.
Didn't the federal govt collect more tax revenue in 2014 than any other year? And what'd we get for it?
Didn't the federal govt collect more tax revenue in 2014 than any other year? And what'd we get for it?
10
Why is this happening under Obama's administration? Is he allowing and/or promoting this merger?
From what I read in all media, it's the conservatives, Tea Party and many Republicans who are against this deal, reasoning that is bad for the middle class. Trump pointed out this problem many times. Why aren't the democrats putting pressure on Obama to find some legal tricks to stop this? Many people would like to know.
From what I read in all media, it's the conservatives, Tea Party and many Republicans who are against this deal, reasoning that is bad for the middle class. Trump pointed out this problem many times. Why aren't the democrats putting pressure on Obama to find some legal tricks to stop this? Many people would like to know.
2
I wonder judging by the number of anti-progressive insults, complete with tags like "whiny lib'rals" such that I am accustomed to seeing on unmoderated comment boards... did someone put the word out that New York Times will now be unmoderated and therefore open to trolls?
I hope not but looking down the comment board at the replies to your times picks... a man has to wonder.
It would be devastating to me to see this intelligent comment board turned into what we now see even at the Washington Post: the participants aren't civil, and the civil aren't participating.
Please don't let that happen.
I hope not but looking down the comment board at the replies to your times picks... a man has to wonder.
It would be devastating to me to see this intelligent comment board turned into what we now see even at the Washington Post: the participants aren't civil, and the civil aren't participating.
Please don't let that happen.
7
"What is lacking is political will to tell powerful corporate interests to stop." Gee, could that anything to do with the contributions Pfizer and other corporate giants make to politicians?
6
This is exactly why we need to reinstitute/raise taxes on imports. As long as there's no cost to offshoring, then companies will do it.
11
The simple solution to all this is tax reform.
Unfortunately, too many conservatives view not paying taxes as their highest form of patriotism.
Until this view changes, our tax laws will make lawyers, lobbyists and congresspeople wealthy.
Unfortunately, too many conservatives view not paying taxes as their highest form of patriotism.
Until this view changes, our tax laws will make lawyers, lobbyists and congresspeople wealthy.
12
Greed is at the heart of this maneuver. I worked for a company that had serious discussions about inversion as a way to dodge taxes - the discussions were quite specific about what the plan was and why. Sure, "shareholder value" goes up but in the long term if you can't sell your products no matter of inversions, tax dodging efforts and other accounting gimmicks will make a company profitable. Pfizer is led by a greedy, unethical, immoral bunch and may they reap the misery they will sow by doing this.
14
I am responding to a message below about "Liberals." I am not doing it as a "Reply" because I want others to read it.
Your analysis and your epithets are seriously flawed. Ranting about "Liberals" is childish and pointless.
This is about piracy, about the captains of industry treating their industries like pirate ships, roving the seas to find safe havens. They are unwilling to pay their fair share of the cost of sustaining a culture – rule of law, protection of patents, prosperous and well-educated citizenry, strong infrastructure to support their enterprise – that allows them to operate their businesses. These people are free riders, 21st century Ragnar Daneskjolds.
Externalities?! We don't need no stinkin' externalities. Why should we? We have ways of making others pay for them.
Your analysis and your epithets are seriously flawed. Ranting about "Liberals" is childish and pointless.
This is about piracy, about the captains of industry treating their industries like pirate ships, roving the seas to find safe havens. They are unwilling to pay their fair share of the cost of sustaining a culture – rule of law, protection of patents, prosperous and well-educated citizenry, strong infrastructure to support their enterprise – that allows them to operate their businesses. These people are free riders, 21st century Ragnar Daneskjolds.
Externalities?! We don't need no stinkin' externalities. Why should we? We have ways of making others pay for them.
14
Reducing a corporation's tax burden is not an unpatriotic or immoral act, but the act of an management team that is fulfilling its fiduciary obligations to its stockholders. Indeed a side benefit of inversions is that it reduces the flow of money to a corrupt incompetent bloated federal government that works against much of what I believe in: things like self reliance, individual freedom, and the right to succeed or fail on my own.
If the NY Times feels otherwise, I invite you and your fellow travelers to spend your own money building your Utopian Society and let working citizens spend their money however they see best.
If the NY Times feels otherwise, I invite you and your fellow travelers to spend your own money building your Utopian Society and let working citizens spend their money however they see best.
6
The NIH funds a great deal of important basic biomedical research. However, the notion that it funds a significant amount of drug development for new molecular entities is completely false. This type of high risk investment is made almost exclusively by biotech and pharmaceutical companies. The vast majority of Pfizer's $9 Billion R&D budget is spent on drug development and shareholders should expect a fair return on this investment.
3
"robbing the treasury", that says it all. Leave it to the NY Times to portray all money as belonging to the Federal Government, and if not given to the Feds, it is stolen. My guess is that Pfizer and most other corporate tax payers are more truthful in reporting their income and expenses then are the editorial writers of the Times. If more investors really understood how the earnings of corporations are double taxed, once at the corporate level and then again at the individual shareholder lever, they would be insisting that these companies relocate to places such as Ireland.
7
"Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands.:
Judge Learned Hand
This country will lose many of its companies to foreign owners if it doesn't wake up. The economics of being headquartered in a country with a more rational tax policy than ours is just too compelling. Our rates are too high, and trying to tax all earnings overseas is structurally uncompetitive.
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands.:
Judge Learned Hand
This country will lose many of its companies to foreign owners if it doesn't wake up. The economics of being headquartered in a country with a more rational tax policy than ours is just too compelling. Our rates are too high, and trying to tax all earnings overseas is structurally uncompetitive.
7
Many multi national companies now generate much more of their revenue and income outside the US. They would have no issue paying US tax rates, whatever they might be on US earnings. But, no, the US insists that they get to levy a totally uncompetitive 35% rate on any earnings, anyplace. Our code, though, only makes the actual tax payable to the Treasury if and when the foreign earnings are brought back to the US. Surprise. No sane company, no responsible company will ever do this. Bring back a dollar to turn it into $.65 when it can be left overseas to earn nothing and stay a dollar! Right.
We can't seem to get a rational set of reforms because "Progressives" insist on keeping the current rates and structure, apparently in the belief that 35% of nothing is better than 15% of something.
We can't seem to get a rational set of reforms because "Progressives" insist on keeping the current rates and structure, apparently in the belief that 35% of nothing is better than 15% of something.
7
$20 billion over ten years is chump change for a national budget that exceeds $4 trillion.
1
Pfizer and companies like it that do these cynical, treasury-robbing deals should, at the very least, be disallowed from lobbying activity, making campaign contributions, employee "bundling", and any other activity that affects our American political process. Also, they should be precluded from seeking redress in US courts should they find their patents infringed upon or other IP violated.
If we can't outlaw these inversions outright we should endeavor to make them as unpalatable as possible. If businesses can employ "poison pills" to avoid being taken over than the government should make use of them too!
If we can't outlaw these inversions outright we should endeavor to make them as unpalatable as possible. If businesses can employ "poison pills" to avoid being taken over than the government should make use of them too!
6
There is a grand divergence between what is legally permissible and what is morally responsible, and in this country that gap has only broadened over the last several decades. Americans, held captive to the rhetoric that wealthy people are the ones who create jobs, have deferred to this cohort to the point where the wealthy face fewer constraints on getting richer than at any time in our nation's history. Indeed, kings of yore would drool jealously over the lifestyles now lived by the super rich. Yet vast accumulation of wealth does not correlate with growth in the job market. The biggest problem is that we have today the best government that money can buy, so don't look to Congress for changes anytime soon.
9
Is there no such thing as love of country and patriotism when it comes to CEO's and corporations? General Electric is reported to have a 400 man tax avoidance department and to pay no tax, and many other corporations follow the same patterns of patriotic payment for the opportunities they are given in our free enterprise economy. This sort of not paying their share by these CEO's and their corporations merely means shifting the tax burdens of the country from those getting the most from the system to those getting the least. Sounds as if patriotism gets trumped by the fast buck.
3
This should show very clearly a corporation (business) is not an economy, and the prime interest of a business is their profit margin, not the wellbeing of the community or country within which it is located or does business.
An economy cannot shed debt by declaring bankruptcy, lay off workers to increase profit margin, or change the location of "registration" to reduce cost. An economy is for the common good, while a corporation, like Pfizer. is for the good of a very small number of stock holders and CEOs.
It is rather ridiculous that FICA would make individual goes through very complex global taxation while leaving a big gapping hole such as inversion for corporations.
An economy cannot shed debt by declaring bankruptcy, lay off workers to increase profit margin, or change the location of "registration" to reduce cost. An economy is for the common good, while a corporation, like Pfizer. is for the good of a very small number of stock holders and CEOs.
It is rather ridiculous that FICA would make individual goes through very complex global taxation while leaving a big gapping hole such as inversion for corporations.
3
First the American aristocracy robs its own country blind while dragging the entire planet to the edge of financial catastrophe. Who else could honour trillions of dollars in publicly funded bailouts by plotting to do worse the next time?
Then they grind the US political system down to an international laughing stock by laundering grotesque profits through the richly farcical Citizens Now: greed at its most sinful. Backing quack public policy while paying off the morally bereft dunces who do their bidding in Congress has rarely been so cost-effective.
Who needs toxic paper when you can leverage have-not Red State kleptocracies to snuff Democracy's Beacon?
And now inversions. "Nothing to be done."
It's no longer in doubt that the American Project is in trouble; rather it's the depth and breadth of the trouble that remains to be measured. And if recent past actions are an indicator of future behaviour, America doesn't do exit strategies very well anymore.
Just what exactly are you people waiting for?
Godot?
Then they grind the US political system down to an international laughing stock by laundering grotesque profits through the richly farcical Citizens Now: greed at its most sinful. Backing quack public policy while paying off the morally bereft dunces who do their bidding in Congress has rarely been so cost-effective.
Who needs toxic paper when you can leverage have-not Red State kleptocracies to snuff Democracy's Beacon?
And now inversions. "Nothing to be done."
It's no longer in doubt that the American Project is in trouble; rather it's the depth and breadth of the trouble that remains to be measured. And if recent past actions are an indicator of future behaviour, America doesn't do exit strategies very well anymore.
Just what exactly are you people waiting for?
Godot?
8
I am not an accountant and I am not a legislation. But I think that companies may be incorporated anywhere, but they need to setup a base in US if they need to conduct business here. Any foreign company based in USA should be required to by US law to report their business dealing in USA and taxed on their US earnings. Wouldn't this simple legislation solve the problem of inversion once and for all?
Alternatively shareholders of foreign companies should be made to pay taxes on dividends at US rates without getting credit for foreign taxes. This would put shareholder pressure on companies considering inversion and stop them from doing so
Alternatively shareholders of foreign companies should be made to pay taxes on dividends at US rates without getting credit for foreign taxes. This would put shareholder pressure on companies considering inversion and stop them from doing so
1
The US should really consider imposing a "tribute" on Ireland and other countries that allow this type of tax avoidance. Our nation needs these tax revenues if the US is to continue to serve as a global police force and provide international stability. Right now, the middle class is being clobbered (via social security cuts, unaffordable health care and skyrocketing tuition to name a few items) to pay for the US's involvement in foreign affairs. If we continue to allow corporations and the wealthy to skirt taxes, our nation will rot from the inside out.
3
I find myself oddly in agreement with many conservative commenters here: no company is obliged to pay any more taxes than they have to.
It's not the proper role of corporations to willing pay more taxes than they have to. It's the job of the electorate to press their representatives to enact laws and tax codes that benefit our country as a whole. These's no constructive purpose in vilifying corporations; they won't be shamed into the behavior many of us would like. A corporation is not a person (Citizens United notwithstanding) and they feel no guilt.
It's not the proper role of corporations to willing pay more taxes than they have to. It's the job of the electorate to press their representatives to enact laws and tax codes that benefit our country as a whole. These's no constructive purpose in vilifying corporations; they won't be shamed into the behavior many of us would like. A corporation is not a person (Citizens United notwithstanding) and they feel no guilt.
4
It's a stroke of genius to describe taxes as "penalizing" and "punishing".
My parents generation were fond of quoting Oliver Wendell Holmes... taxes are the price we pay for living in a civilized society.
No more! Roads police protection education some kind of safety net for our seniors, is now described as theft. Inheritance taxes are suddenly "unfair death tax."
Where will the income that sustains us as a culture come from if not from shared tax burdens? Do we want to have dilapidated infrastructure, declining education, citizens working for peanuts so that these corporations can thrive and live free off everyone else? Now -- that's what I call "punishment" and "theft."
Interesting inversion isn't it? Sort of like the inversions these companies are taking at all of our expense.
My parents generation were fond of quoting Oliver Wendell Holmes... taxes are the price we pay for living in a civilized society.
No more! Roads police protection education some kind of safety net for our seniors, is now described as theft. Inheritance taxes are suddenly "unfair death tax."
Where will the income that sustains us as a culture come from if not from shared tax burdens? Do we want to have dilapidated infrastructure, declining education, citizens working for peanuts so that these corporations can thrive and live free off everyone else? Now -- that's what I call "punishment" and "theft."
Interesting inversion isn't it? Sort of like the inversions these companies are taking at all of our expense.
6
Pfizer has been a very destructive force in the drug industry over the past 20 years. Due to their lack of R&D productivity, they used profits from blockbusters like Lipitor (acquired through Warner Lambert acquisition) to buy more and more companies to fuel revenue growth. The result was a massive loss of employment in the acquired companies as they were "right sized" but more importantly none of these defunct companies is engaged in R&D for drugs that while important wouldn't meet Pfizer's threshold for investment. This loss may be more serious than the loss of tax revenue in the long run.
2
The obsession of the US with taxing income, which was unconstitutional until 1913, will be the undoing of this nation.
All other advanced nations have shifted to much lower taxes on (corporate) income, to taxes on consumption (VAT and the like) to fund government functions.
Taxing income is taxing wealth creation. And corporations will always seek togo where taxation is lower.
Taxing consumption by sales, use, VAT taxes, captures the revenue for every purchase in the US, regardless of where goods or services are produced.
The US needs to completely eliminate income taxes (go back to the pre-1913 regime), and shift to a consumption tax base. If we don't do that, we will slowly lose all our corporations to saner advanced economies with better tax policies.
All other advanced nations have shifted to much lower taxes on (corporate) income, to taxes on consumption (VAT and the like) to fund government functions.
Taxing income is taxing wealth creation. And corporations will always seek togo where taxation is lower.
Taxing consumption by sales, use, VAT taxes, captures the revenue for every purchase in the US, regardless of where goods or services are produced.
The US needs to completely eliminate income taxes (go back to the pre-1913 regime), and shift to a consumption tax base. If we don't do that, we will slowly lose all our corporations to saner advanced economies with better tax policies.
3
1) The substitute for an income tax holiday, during which domestic corporations' overseas profits can be repatriated to the US at tax rate much below 35%, is the inverted merger. Since Congress has not passed legislation reinstating a tax holiday recently, then the inverted merger could allow these earnings to remain overseas without repatriation. Ireland recently enacted lower taxes on patent and other IT property revenue streams that are sited in Ireland of only 6.25%. Thus, Pfizer can gain tax holiday rates by its inverted merger; instead of via an actual tax holiday.
2) Since money is ever more fungible in today's electronic trading currency markets, to ensure that profits from overseas revenue sources are never repatriated to the US untaxed is, if not impossible, at least very costly to trace their disposals.
3) If Pfizer is worth about $200 billion as stated, it simply means that the total market value of Pfizer's assets minus the market value of its liabilities is equal to its market net worth of about $200 billion. With a history of unregulated pharmaceutical prices and the inability of Medicare to bargain with pharmaceutical companies to maximize its purchasing power, the US has been a very profitable market for Pfizer. This profitability shows up in high valuations for Pfizer's past earnings in its retained earnings and also in its stock price as market expectations for high future income streams, many of which will originate in the US. [11/24/15 Tu 2:26p]
2) Since money is ever more fungible in today's electronic trading currency markets, to ensure that profits from overseas revenue sources are never repatriated to the US untaxed is, if not impossible, at least very costly to trace their disposals.
3) If Pfizer is worth about $200 billion as stated, it simply means that the total market value of Pfizer's assets minus the market value of its liabilities is equal to its market net worth of about $200 billion. With a history of unregulated pharmaceutical prices and the inability of Medicare to bargain with pharmaceutical companies to maximize its purchasing power, the US has been a very profitable market for Pfizer. This profitability shows up in high valuations for Pfizer's past earnings in its retained earnings and also in its stock price as market expectations for high future income streams, many of which will originate in the US. [11/24/15 Tu 2:26p]
This editorial warrants a sanity check. Stipulating, for discussion purposes, that corporate inversions will reduce the tax take over ten years by around $20 billion implies a reduction in total federal government revenue of about 0.057%. While the number, $2 billion a year, is large, the total tax revenue of about $3.5 trillion is larger by a factor of 1,750. Put into more easily comprehensible terms, that is similar to $30 for a family with the median annual income of about $52,000.
The tax code certainly merits revision to simplify it and eliminate special interest loopholes and subsidies, and could be done in a way that would reduce or eliminate the incentive for inversions. But the claim that inversions cause ruinous tax revenue losses is, on the figures used in the editorial, pretty much rubbish.
The tax code certainly merits revision to simplify it and eliminate special interest loopholes and subsidies, and could be done in a way that would reduce or eliminate the incentive for inversions. But the claim that inversions cause ruinous tax revenue losses is, on the figures used in the editorial, pretty much rubbish.
5
A few of the points in the op ed don't make sense to me. For instance, if corporations take advantage of NIH innovations as suggested, why isn't NIH fully recovering their costs with license fees that provide the government with return of principal and a return?
In your op ed piece you acknowledge that foreign rates are lower, even though corporations' effective rate might be lower than the posted rates. Obviously, if they are casting about for foreign partners, they think they can lower their effective rates even further.
Also, the President has stated that they should pay tax since they use our infrastructure here, but foreign earnings are being taxed abroad and then here when repatriated. Those foreign earnings do not utilize domestic infrastructure, so why are they taxed twice? Instead, they sit overseas in bank accounts, but after inversion can be repatriated without a double-tax penalty. After an inversion, as I understand it, these foreign earnings can be invested in the United States without penalty. Does it not make sense to use the inversion game?
Obviously some form of tax harmonization is necessary, and that is one more job that government chooses to avoid discussing or actually doing? No surprise - dysfunction reigns in Washington.
In your op ed piece you acknowledge that foreign rates are lower, even though corporations' effective rate might be lower than the posted rates. Obviously, if they are casting about for foreign partners, they think they can lower their effective rates even further.
Also, the President has stated that they should pay tax since they use our infrastructure here, but foreign earnings are being taxed abroad and then here when repatriated. Those foreign earnings do not utilize domestic infrastructure, so why are they taxed twice? Instead, they sit overseas in bank accounts, but after inversion can be repatriated without a double-tax penalty. After an inversion, as I understand it, these foreign earnings can be invested in the United States without penalty. Does it not make sense to use the inversion game?
Obviously some form of tax harmonization is necessary, and that is one more job that government chooses to avoid discussing or actually doing? No surprise - dysfunction reigns in Washington.
2
Enlightened self interest this is not but corporate management considered the future beyond the next quarter as irrelevant so they would not consider enlightened self interest any different from old fashioned base selfishness. This move by Pfizer makes perfect sense if they know that there are no consequences which Pfizer nor any huge corporations will experience by avoiding taxes, that they can function adequately without governments that provide the stable conditions which enables them to make money and to enjoy it. Is Ireland going to build a navy that assures free passage of trading ships across the planet. It is going to support an infrastructure that enables Pfizer to manufacture and trade across the planet with high confidence and consistent reliability while governments cease to be funded adequately to provide those benefits? No, but Pfizer's goal is to become a free rider in the world, maximizing profits and depending upon luck to keep it all functioning, while disingenuously arguing that customers and employees will pay for all the institutions and services required for businesses to operate well.
This is why the so-called "personhood" of corporations is a LEGAL FICTION. It was created by Roman law to enable commercial associations between individuals for specific purposes. US law allows corporations to be created by legislative act only. Today the US and its states have general corporation acts which permit corporations to create themselves by filing forms with a government office. These are not "persons" and certainly are not entitled to constitutional and civil rights like individual citizens. The Supreme Coury decision to the contrary has no basis in law, fact or logic.
5
Dear Editorial Board,
I have no doubt that every one of your members has the services of an attorney and an accountant to assist you with your taxes. I also have no doubt that said lawyers and accountants take advantage of every conceivable deduction allowed by law. The reason is both simple and obvious - you wish to keep more of your money.
Pfizer and other corporate entities are doing the exact same thing, yet you are assailing them for doing it. Where I come from we call that hypocrisy. If they are not breaking any laws, leave them alone. Otherwise, tell your lawyers and accountants that you aren't paying enough taxes and write the government a check.
I have no doubt that every one of your members has the services of an attorney and an accountant to assist you with your taxes. I also have no doubt that said lawyers and accountants take advantage of every conceivable deduction allowed by law. The reason is both simple and obvious - you wish to keep more of your money.
Pfizer and other corporate entities are doing the exact same thing, yet you are assailing them for doing it. Where I come from we call that hypocrisy. If they are not breaking any laws, leave them alone. Otherwise, tell your lawyers and accountants that you aren't paying enough taxes and write the government a check.
5
My small business generates very small profits but the income that it generates is added to my employment income and taxed at the same rate-- far higher than any corporation. The benefits that accrue to my little business are dwarfed in magnitude by the benefits that accrue to US (multinational) corporations. And yet they do not wish to pay taxes? Your logic is so far off as to be laughable, except it is a tragedy of the commons.
1
You are assuming that everyone is going to the questionable criminal lengths of Pfizer to reduce their tax obligation...
That is simply not true.
No one I know pretends to live in Ireland to avoid taxes. That's extreme. And that's the rather easy to grasp point that you are avoiding.
That is simply not true.
No one I know pretends to live in Ireland to avoid taxes. That's extreme. And that's the rather easy to grasp point that you are avoiding.
4
Do they also pay millions In bribes to keep these tax avoidance deals legal ?
1
Corporations are at war with nation-states and many of the US ultra-rich who most benefit from their actions are criminal at best, psychopathic at worst. They are enemies of the United States of America and Humanity.
10
GRW,
La plus ca change.
Back in 1773 the tea belonging to the East India Company was dumped into Boston Harbour. I wish Americans knew that the world's largest corporation way back when imposed the tax on tea and the governments of the nation states and Empires in 1773 had little power to do anything but comply with corporations that were richer and more powerful than Empires.
How ironic that the corporations should set up today's Tea Party Patriots to stand against the people and a demand for "responsible government."
It is more than a travesty it is downright perverted.
La plus ca change.
Back in 1773 the tea belonging to the East India Company was dumped into Boston Harbour. I wish Americans knew that the world's largest corporation way back when imposed the tax on tea and the governments of the nation states and Empires in 1773 had little power to do anything but comply with corporations that were richer and more powerful than Empires.
How ironic that the corporations should set up today's Tea Party Patriots to stand against the people and a demand for "responsible government."
It is more than a travesty it is downright perverted.
1
GRW: These corporations are not the enemies of US or humanity: they are giving them miracle drugs which no other entities on earth can invent and produce. But at an exorbidant cost. Who is to blame? The politicians who have the power to protect the middle class, but don't do it. Their campaigns need these donations.
1
Here's a thought: when the NYT or the WSJ report on these kinds of tax avoidance deals, perhaps the papers could also include the lists of the Boards of each company or at least links to the corporate website where such information is available. It is no longer complate reporting unless the news and financial press begins penetrating the Board of Directors myth by naming names. It is the Board, ultimately, that must sign off on any such business decisions, and its members must be held more accountable.
6
Close the loopholes. Why should US companies be taxed on overseas sales? Apple produces phones in China and sells them in Europe. Why should Apple pay taxes to the US on those sales?
We have trillions of corporate earnings that are not being invested in the US because our insane tax codes. We have US citizens and corporations becoming citizens of other countries.
Our focus is backwards. We are spending our efforts to make sure our citizens and corporations cannot relocate to other countries. Why don't we make our country more attractive and competitive for citizens and corporations of other countries?
Many other countries offer a attractive legal and tax framework in which to operate. The US is blessed by geography and originally by a free and competitive framework. The geography remains but the free and competitive framework is declining.
We have trillions of corporate earnings that are not being invested in the US because our insane tax codes. We have US citizens and corporations becoming citizens of other countries.
Our focus is backwards. We are spending our efforts to make sure our citizens and corporations cannot relocate to other countries. Why don't we make our country more attractive and competitive for citizens and corporations of other countries?
Many other countries offer a attractive legal and tax framework in which to operate. The US is blessed by geography and originally by a free and competitive framework. The geography remains but the free and competitive framework is declining.
6
As a small business owner for thirty five years, that produces an actual product and employs real people that earn a living wage, it is plain to me that the equity between big and small business is as unbalanced as it is in income. Big companies can invert, extort and bully local, state and in this case, national politicians into one self inflicted revenue wound after another. That leaves the rest of us to pay for nation building, global defense, environmental repair, education, infrastructure repair and replacement and everything else we can, should or want to do as the world's leading nation. From my perspective it is increasingly cleaar we can afford little of what it takes to remain a world leader. That's bad news for us, bad news for the world and ultimately bad news for the nearsighted corporate manipulators looking for yet another short cut to quick returns. We, in the small business community, understand real investment; its long term, requires patience and an underlying set of beliefs that include belief in our customers and the community we share with them. Pfizery has made its bed and hopefully it will some day prove a thorny one. In the meantime those of us left here to pick up the tab are running low on patience with big business. Something to keep in mind Pfizer, we are still your biggest customers.
9
Kelly, as a small business owner, I wish I could "like" your comment more than once. You are 100% correct that the rules are different--and harder--for us.
Here's the real problem, though: you write "Something to keep in mind Pfizer, we are still your biggest customers."
Unfortunately, we are not. Pfizer's biggest customers are other large businesses, namely insurance companies and corporate hospitals.
And therein lies the problem...
Here's the real problem, though: you write "Something to keep in mind Pfizer, we are still your biggest customers."
Unfortunately, we are not. Pfizer's biggest customers are other large businesses, namely insurance companies and corporate hospitals.
And therein lies the problem...
Here's a thought... Maybe the US should try to put forth a more competitive global tax rate that is attractive to big businesses?
The same thing happens within the States as well. Take Rhode Island, for example, where there are more favorable corporate laws and taxes than most other States. Are corporations "Tax Dodgers" when they move their domicile from NY to Rhode Island? Maybe to the NY Tax Collectors they are, but business is business. If a company can pay less, it will pay less because it has an obligation to its shareholders to do so.
Grow up people.
The same thing happens within the States as well. Take Rhode Island, for example, where there are more favorable corporate laws and taxes than most other States. Are corporations "Tax Dodgers" when they move their domicile from NY to Rhode Island? Maybe to the NY Tax Collectors they are, but business is business. If a company can pay less, it will pay less because it has an obligation to its shareholders to do so.
Grow up people.
7
Mike, we are a nation and so the comparison of what one state or another gives to corporations is not germane to the discussion. What benefits Rhode Island in at least some respects, accrues to our nation as a whole. Last I heard Ireland was not our 51st state.
2
Why, I do believe the NYTimes is outraged, dare I say angry? Creating these sham corporate locations overseas to offload profits where tax rates will be low? The tone of the article is derisive and the implication that Congress will do nothing stops just short of moral indictment.
Good to know the Times shares citizen concerns and frustration that this "free stuff" for corporations is out of hand. Enjoying the infrastructures, patent protection and capital protection provided by the American people and their government, only to cheat the US out of 20 billion in tax revenues? Hardly seems American at all. Which is what we lonely plebes have been shouting about!
Will no one rise up to stop this marriage between corporations and our government?
When even such 'beloved' companies as APPLE, whose inversions depend on phony Ireland 'mailboxes' to dodge taxes, are doing this with impugnity? We have a problem. Correction: We've had a problem, for quite sometime, evinced by Citizens United and the fact that some 150 families have contributed HALF of the political contributions so far in this election cycle.
This kind of seamlessness between government and business is seen as a fascist structure, in that only business, minus most of the population, will have access to such 'rights' and privileges. With Trump acting as belligerent-in-chief, we're getting uncomfortably close to Mr. Britt's formulation of the 14 characteristics of a fascist ideology.
Now...that outrages me, too.
Good to know the Times shares citizen concerns and frustration that this "free stuff" for corporations is out of hand. Enjoying the infrastructures, patent protection and capital protection provided by the American people and their government, only to cheat the US out of 20 billion in tax revenues? Hardly seems American at all. Which is what we lonely plebes have been shouting about!
Will no one rise up to stop this marriage between corporations and our government?
When even such 'beloved' companies as APPLE, whose inversions depend on phony Ireland 'mailboxes' to dodge taxes, are doing this with impugnity? We have a problem. Correction: We've had a problem, for quite sometime, evinced by Citizens United and the fact that some 150 families have contributed HALF of the political contributions so far in this election cycle.
This kind of seamlessness between government and business is seen as a fascist structure, in that only business, minus most of the population, will have access to such 'rights' and privileges. With Trump acting as belligerent-in-chief, we're getting uncomfortably close to Mr. Britt's formulation of the 14 characteristics of a fascist ideology.
Now...that outrages me, too.
7
"Will no one rise up to stop this marriage between.....?"
This is exactly what Senator Sanders is doing.
Watch his speech from Georgetown U last week.
Thank you for the forum NYT.
This is exactly what Senator Sanders is doing.
Watch his speech from Georgetown U last week.
Thank you for the forum NYT.
1
If Pfizer wants to make their headquarters overseas, then all the workers here in the States should get the same benefits those abroad would get. According to the Irish Times, " For many workers in Ireland, the idea of benefits is probably limited to health insurance, some paid maternity leave and above-average holiday time. However, more and more companies are going to great lengths to recruit talented employees - and keep them from jumping ship to competitors." The paper lists such perks as onsite massages, three course lunches and onsite massages to dry cleaning services. If there is a union in Ireland, which the workers belong to, they must belong to a union here. They should also have to pay the same rate of taxes that are levied on any foreign company and also be subject to tariffs.
If they are going to be a foreign company, let them be. But don't let them pick and choose which aspects of foreign and which aspects of domestic they prefer to keep.
If they are going to be a foreign company, let them be. But don't let them pick and choose which aspects of foreign and which aspects of domestic they prefer to keep.
9
Seems less of a "Breakthrough" than business as usual, just on a larger scale?
2
Just another liberal success story, When the government views corporations and individuals as nothing more than revenue streams to the ever increasing federal government leviathan then corporations will do what is in their best interests.
Lower the corporate tax rates, simplify the code and make every American Citizen pay taxes even those on public assistance...tax them...then they will see the result of the insane policies they advocate.
We keep hearing how we are global citizens when the Democrats want to open the borders for votes...well this is a consequence of that thinking because unlike most Americans ..Corporations can and will move to more hospitable climates.
Lower the corporate tax rates, simplify the code and make every American Citizen pay taxes even those on public assistance...tax them...then they will see the result of the insane policies they advocate.
We keep hearing how we are global citizens when the Democrats want to open the borders for votes...well this is a consequence of that thinking because unlike most Americans ..Corporations can and will move to more hospitable climates.
5
Sorry folks. It's Pfizer's money, not yours, not the government's. Pfizer is entitled to do whatever is legal to reduce its tax bill, just as it reduces its other expenses. That's what businesses do. I assume that those of you who are outraged by this, finding it to be somehow morally offensive, similarly choose not to avail yourselves of permitted deductions when filing your own income tax returns: your home mortgage interest; those purely altruistic contributions to 401(k)s; your property taxes. Unlikely.
5
Indeed we have reached a new low. We are seeing unprecedented flouting of this country's higher values and an anti-competitive race to oligopoly. I am somewhat terrified inside to know that if I should ever be one gravely ill I may not be able to afford a medication that they have decided to price st $10,000 per pill.
4
My wife had a really good idea this morning. Let's require that drug companies sell drugs in America at the same price they charge in the country where they are legally based.
6
All NIH funded medication research should include a guarantee that American prices never exceed those of any other nation on the planet. The real theft of this Pfizer deal is not just it's tax scam, but it's extortionate US pricing. Report ALL the news, not just what's hot today.
2
Let's be clear. First,the statement that "much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health",is nonsense.While it is true that target identification is often a product of academic,including NIH funded,research,the role of public funds in the vast majority of drug Development (where the costs and risks predominantly lie)is funded privately.
Second,Corporations have a fiduciary duty to maximize profits.Inversions can become history by removing the incentive to engage in them.An effective tax rate similar or lower than currently the case would do it.And with much more support than any attempt to make Tax avoidance (rather than evasion ) illegal.
Second,Corporations have a fiduciary duty to maximize profits.Inversions can become history by removing the incentive to engage in them.An effective tax rate similar or lower than currently the case would do it.And with much more support than any attempt to make Tax avoidance (rather than evasion ) illegal.
6
One detail escapes the writer
While mentioning the U S tax rate, the writer "forgot" about the ACA imposed tax on gross sales that applies to varied parts of the medical supply sector.
Our government, in it's eagerness to profit off of sickness by taxing medication and medical devices, has increased the incentive for companies to do inversions.
Perhaps if the writer could remove the selective blinders, the writer could expose the major incentive for manufacturers to move off shore - government's expanding collective greed, in all of it's combined forms.
While mentioning the U S tax rate, the writer "forgot" about the ACA imposed tax on gross sales that applies to varied parts of the medical supply sector.
Our government, in it's eagerness to profit off of sickness by taxing medication and medical devices, has increased the incentive for companies to do inversions.
Perhaps if the writer could remove the selective blinders, the writer could expose the major incentive for manufacturers to move off shore - government's expanding collective greed, in all of it's combined forms.
7
We, the people, used to love our country for what it stood for. We set the standard for freedom and liberty and for that reason, a patriotism like no other country in the world. In short, we loved our country and were ready to sacrifice to keep it strong. The Pfizer tax avoidance scheme points to the real picture today: American patriotism is dead. It has been replaced by corportism, where the profit imperative supplants all other considerations. What could be sadder?
3
Why can't Medicare and Medicaid stop listing Pfizer drugs on their formularies? If there are generic equivalents, the federal government should list those and ignore Pfizer products.
3
Corporate taxes just get passed onto consumers anyway. As a strong supporter of free trade, I believe that corporations should locate all of their functions where it makes the most economic sense. If politicians don't want corporations to relocate their headquarters or their manufacturing they need to keep taxes and other costs low.
4
The greater villain is the massively complex tax code and all the corrupt lobbyists and legislators who created it, selling tax concessions for donations and votes. And the ultimate responsibility rests with the feckless public who could put a stop to the rot if only they weren't so apathetic and ignorant.
As a wise man once said the public should get what they deserve - and they should get it good and hard.
As a wise man once said the public should get what they deserve - and they should get it good and hard.
4
First we need to clear up the myth that corporations pay taxes. Only people pay taxes. Any corporate tax that is levied is paid by a person somewhere in the chain in the form of less stock value, higher product prices, lower wages, etc. And as a very liberal econ teacher taught me many years ago, buildings do not write checks. Only people pay taxes. Corporations are people.
4
There is great gnashing of teeth. Ask yourself this, why in the world do you want to have a system that has the highest corporate rate in the world? Why do you want a system that is then filled with all sorts of offsets to this high rate? Why do you want a system that is different than the rest of the world when it comes to foreign earnings that puts US companies at disadvantage? The system stinks. The effect is that U.S. companies do what they can to minimize the effect of this mess. Low taxes for companies equals more jobs. That is why just about every country in the world (except the U.S. ) has reduced rates. So, either we can clean up the system, or we can see more of these transactions.
10
Sounds like a threat. Give us the gold...or else.
Come to think of it, a sports team in our hometown has told the city that because we won't build a billionaire a stadium to quadruple the value of HIS team, he's leaving to where they will empty their treasuries to have a football team.
Now, is this the level playing field you imagine we are all on? Is this playing fair or is this demanding that the treasuries empty themselves for their benefit while Walmart workers need food stamps to feed themselves and their families?
Something seems slightly amiss, wouldn't you say? And yes, that question is rhetorical.
Come to think of it, a sports team in our hometown has told the city that because we won't build a billionaire a stadium to quadruple the value of HIS team, he's leaving to where they will empty their treasuries to have a football team.
Now, is this the level playing field you imagine we are all on? Is this playing fair or is this demanding that the treasuries empty themselves for their benefit while Walmart workers need food stamps to feed themselves and their families?
Something seems slightly amiss, wouldn't you say? And yes, that question is rhetorical.
1
Low taxes DO NOT create more jobs.
2
Keep in mind that the majority of shares of these companies are held by public and private pension funds; they will vote in favor of the merger because it will make more money for them and will aid them in meeting their pension obligations to employees and retirees. The tax rules as they exist today were written and approved by Democrat and Republican legislators and Presidents for decades, they did not appear out of the blue in the recent past. As is the case with each of us as individual taxpayers, no company has the obligation to pay more in taxes than it is legally responsible for under the relevant law. Companies are intended to be profit-making if practicable, and through that goal they attract capital. As with many other aspects of modern life, the Information Age makes it easier for enterprises to utilize offshore locations for business purposes. Take a look at Apple, which has a really low effective tax rate and an even lower actual tax payment rate, because it takes the position that all of its intellectual property is held overseas. If you would rather contribute to a national budget by directly investing in companies with a high tax rate, then go right ahead. keep in mind that the dollar made by a company is taxed to the company and then is taxed again to you when you get a dividend and then is taxed again (if anything is left) when you drop dead; governments worldwide get their share quite easily and often.
5
Your example of Apple is horrible. Their headquarters is in Cupertino. They rely on employees mostly educated in publicly funded schools and universities. Their employees use public transportation or city streets to get to and from work. They have access to excellent water and safe wastewater, all funded by tax payers in addition to fees for service. Their staff plays tennis on public courts, swims in public pools, goes jogging on public trails. If a fire breaks out on Apple property, it is the local FD that puts out the fire. The local PD is there to solve crimes minor and major. I could go on. but you get the point-- all this costs money and it should NOT be paid for by individuals alone-- corporations must pay their fair share for the benefit of our business and cultural climate. But Apple does not want to do so. How is that OK?
2
It is hard to speak about this process with our reverting to terms associated with criminal actions and behaviors. It is nice for the "Royals", to call the Corporate Owners who and what they are, that they have engineered the legal system to rename outright stealing or tax avoidance to something they can do "legally".
Well, this gimmick which they are using to hold us up is really no different than a 9MM Glock, and they are no different than any thug ina ny alley.
Interesting, the difference between Law and legal.
Well, this gimmick which they are using to hold us up is really no different than a 9MM Glock, and they are no different than any thug ina ny alley.
Interesting, the difference between Law and legal.
1
"Well, this gimmick which they are using to hold us up is really no different than a 9MM Glock, and they are no different than any thug in any alley."
That analogy rightly belongs to what government does. They can compel you through force - corporations can't.
That analogy rightly belongs to what government does. They can compel you through force - corporations can't.
Of course it should be illegal, but it is absurd to blame companies who take advantage of existing laws. Let the Congress act and the playing field can be made level. Then gone is the pressure for corporations to act in their shareholders' best interests by making decisions in their nation's worst interests.
4
We have all the POWER. The mass consumer market is here. We are choosing to be weak. These taxes will be paid in the long run, primarily from individual income.
1
"We have all the POWER. The mass consumer market is here. We are choosing to be weak."
Oh, yes. A cancer patient who need a drug only sold by this combined company (of which there are dozens if not hundreds) is just being weak of will.
Oh, yes. A cancer patient who need a drug only sold by this combined company (of which there are dozens if not hundreds) is just being weak of will.
2
How many jobs will be lost this time? It was 30,000 when Pfizer bought Wyeth a few years back.
3
Since as the article stated most breakthrough research is carried out by the government and then used by Big Pharma to make outrageous profits why not just nationalize these parasitical companies and solve two problems at the same time: tax dodging and price gauging.
3
This is just another predictable act in a country whose government is run by and for the corporate world and the extremely wealthy. To date just 158 families have provided nearly half of the early money for efforts to capture the White House. Only 28 of these families contributed to Democrats. The Koch’s alone pledge to spend nearly a billion dollar to put their right wing candidates into office. We must abandon the notion that this is a democracy by the people and for the people and acknowledge that we live in an oligarchy controlled by a wealthy few drifting rapidly toward a nation of haves and have-nots
2
The government's inability to reform the tax code is the real problem here. I cannot blame Pfizer. How many of us take every deduction that's allowed on our tax filings? Companies are doing the same thing. We need to turn our scorn on our elected officials. Do not vote for any politician who does not make reforming and simplifying the tax code their first priority. Let's get the petitions going!
5
With this political flack in mind, make sure lawmakers agree to start negotiating prizes for Medicare Part D. The problem with Pharma isn't that they don't pay taxes (corporate taxes are less than 13% of all federal taxes paid), it's that they are too expensive here. Anyway, we have to change our way of taxing corporations. Haven't heard a good strategy yet, though.
The first step is to pull the Pfizer's grants. And go from there.
3
If Pfizer is not interested in being a US company, then:
1) It should be denied access to research from our taxpayer-funded universities and the taxpayer-funded National Institute of Health.
2) US trade representatives should immediately cease to negotiate on behalf of Pfizer in international trade negotiations.
3) The government should immediately begin bargaining with Pfizer for the lowest possible prices for its products for recipients of Medicare and Medicaid (which it is currently unable to do with US companies).
4) Pfizer should be prohibited from acting as a US "person" by contributing money to candidates or electoral issues.
There need to be consequences for traitors.
1) It should be denied access to research from our taxpayer-funded universities and the taxpayer-funded National Institute of Health.
2) US trade representatives should immediately cease to negotiate on behalf of Pfizer in international trade negotiations.
3) The government should immediately begin bargaining with Pfizer for the lowest possible prices for its products for recipients of Medicare and Medicaid (which it is currently unable to do with US companies).
4) Pfizer should be prohibited from acting as a US "person" by contributing money to candidates or electoral issues.
There need to be consequences for traitors.
5
This is just capitalism at work in America. Officers of a publicly traded company have a fiduciary responsibility to maximize profits and minimize fixed costs and they can be sued by shareholders for shirking these responsibilities. If you want different behavior then change the law.
2
Once upon a time, corporations were chartered by the government. The supposed reasons for governments freeing shareholders from liability was in return for the corporations providing value in taxes and employment.
Corporations no longer provide any return for their limited liability clause. The bargain needs to be renegotiated.
Corporations no longer provide any return for their limited liability clause. The bargain needs to be renegotiated.
Does this mean they can no longer make donations to people running for political office in this country since they are now a foreign corporation? How about their executives and employees?
2
As a result of this big tax break we should then expect cheaper drugs... when pigs fly !!
Yet another example of devious attempts to expand corporate welfare. This time to enjoy the protections afforded by US governance and to exercise their corporate personhood rights without having to bear any financial responsibility for the maintenance of those protections. As the NYT notes, these “inverted” companies “remain listed on United States-based stock exchanges, where they raise capital under the protection of American securities’ laws [and] continue to enjoy the protection of [US] patent laws, as well as their connections, official and unofficial, with federal research agencies.” At a minimum, those connections ought to be severed. It should be as easy as barring affordable pharmaceuticals from Canada and Europe, as our Congress does now as a favor to so-called US-based drug manufacturers.
The excuse of Pfizer and other inverted company executives that “They say they cannot remain competitive if they have to pay tax on profits at the relatively high United States top rate of 35 percent” is self-serving. Perhaps these companies cannot remain competitive because their executives are compensated so exorbitantly. Nowhere else in the world are executives compensated at the obscenely high executive-to-employee ratios we have here. How likely are these newly inverted corporations to alter their compensation ratios to resemble the international ones?
Competitiveness would also improve if they spent less lobbying Congress for benefits and exemptions.
The excuse of Pfizer and other inverted company executives that “They say they cannot remain competitive if they have to pay tax on profits at the relatively high United States top rate of 35 percent” is self-serving. Perhaps these companies cannot remain competitive because their executives are compensated so exorbitantly. Nowhere else in the world are executives compensated at the obscenely high executive-to-employee ratios we have here. How likely are these newly inverted corporations to alter their compensation ratios to resemble the international ones?
Competitiveness would also improve if they spent less lobbying Congress for benefits and exemptions.
4
competitiveness would improve if government would quit giving subsidies, carve-outs and tax exemptions to business and regulate them a little less.
8 years under Obama and this still goes on-and the difference between Democrats and Republicans is?
Considerable, as you should've found out after voting for Nader handed the Presidency to Bush in 2000, low voter turnout handed the Republicans the Congress in 2012, and as you most assuredly will find out--with a vengeance--if fashionable disdain for voting sticks us with President Cruz in 2016.
4
The comments are here clearly show the sad state of our Nation.
Proclaiming that Pfizer is "stealing from the government", as if the government is entitled to keep every dollar of profit, and anything allowed to be kept by the corporation (or wealthy individual) is money taken away from the government is absurd!
Wake up people!
Its your income (or the corporation's income) - there is a tax code that defines what MUST be paid on that income. You don't need to pay the government a dollar more than is required by the tax code - so why would you!? Or why would any corporation?!
Proclaiming that Pfizer is "stealing from the government", as if the government is entitled to keep every dollar of profit, and anything allowed to be kept by the corporation (or wealthy individual) is money taken away from the government is absurd!
Wake up people!
Its your income (or the corporation's income) - there is a tax code that defines what MUST be paid on that income. You don't need to pay the government a dollar more than is required by the tax code - so why would you!? Or why would any corporation?!
4
I really don't have a problem with them moving, as long as the board emigrates as well, and takes their entitled children with them. No one should be forced to participate in a nation where they don't feel an affinity for or responsibility to the society and culture.
Here's a crazy idea. Why don't we structure out tax codes that it is to Allergan's benefit to move here?
4
Complain all you want but we allowed these laws to protect off-shore companies and we allow companies to defect. How can we complain?
If you want to make things change, you must make changes where they will have an effect. We keep electing the same people who look after the interests of mega-corporations, what should we expect?
Stop reelecting these people to representative positions. Hold those in power accountable. Bring the business back home or make them pay.
If you want to make things change, you must make changes where they will have an effect. We keep electing the same people who look after the interests of mega-corporations, what should we expect?
Stop reelecting these people to representative positions. Hold those in power accountable. Bring the business back home or make them pay.
2
Earlier this week it was brought to my attention that the phrase "responsible government" was not part of the American vocabulary. This more than anything else made clear to me why talking about government and politics and even the essence of what America was all about was so frustrating.
Boston's famed tea party was celebrated far and wide throughout the Empire. In 1773 terms like democracy were not even concepts but today in Canada, Australia, New Zealand and India "responsible government" is what people who study political science understand as the reason for the American revolution and what we citizens of the Commonwealth understand as the purpose of government.
In 1773 the tax on tea which was imposed by the Crown was not tyrannical it was a capitulation to the board of directors of the East India Company. Faced with its angry shareholders the Board of Directors demanded the Crown impose burdensome taxes on tea to recoup monies lost because East India's board had made serious mistakes in financial decisions. The tax on tea did not apply to the East India Company it was designed to squeeze out the small main street Tea Merchants in Boston, Montreal, New York and other cities throughout the Empire. The American Revolution was not a revolt against tyranny it was a revolt against a corporation that owned and controlled governments in an area covering more than half the globe.
The merger reminds me of what the phrase no taxation without representation meant back in 1773.
Boston's famed tea party was celebrated far and wide throughout the Empire. In 1773 terms like democracy were not even concepts but today in Canada, Australia, New Zealand and India "responsible government" is what people who study political science understand as the reason for the American revolution and what we citizens of the Commonwealth understand as the purpose of government.
In 1773 the tax on tea which was imposed by the Crown was not tyrannical it was a capitulation to the board of directors of the East India Company. Faced with its angry shareholders the Board of Directors demanded the Crown impose burdensome taxes on tea to recoup monies lost because East India's board had made serious mistakes in financial decisions. The tax on tea did not apply to the East India Company it was designed to squeeze out the small main street Tea Merchants in Boston, Montreal, New York and other cities throughout the Empire. The American Revolution was not a revolt against tyranny it was a revolt against a corporation that owned and controlled governments in an area covering more than half the globe.
The merger reminds me of what the phrase no taxation without representation meant back in 1773.
2
Wonder why nobody is asking why our corporate tax rates are so high compared to other countries that this is worthwhile?
3
"It is not hard to write legislation and draw up rules outlawing inversions, and bills currently in Congress could put a stop to them quickly." Actually - it is very hard; and would violate international agreements. It is not possible to enact a law that prevents a foreign company from acquiring a domestic - which is exactly what the Allergen - Pfizer deal is - unless national security is threatened. And the US cannot block foreign products from US shores - which some comments suggest - just because inversions avoid US taxes.
However, as a Pfizer shareholder I wonder if this really is such a good deal. The "stock-market" doesn't appear to agree as Pfizer stock was knocked; and most analysts seen to think Pfizer is grossly overpaying for Allergen. I'd much rather Pfizer invested the $74 billion doing currently doing nothing in overseas accounts was instead invested in the US for R&D purposes and gainfully employing Americans in high paying jobs. Unfortunately Pfizer would have to fork over up to one third - $25 billion in tax - to repatriate that $74 billion; from a corporate view and obligatory duty to the shareholders by the executives that money needs to be invested most wisely for the biggest return - and that means investing in almost any advanced country in the world - other than the US.
However, as a Pfizer shareholder I wonder if this really is such a good deal. The "stock-market" doesn't appear to agree as Pfizer stock was knocked; and most analysts seen to think Pfizer is grossly overpaying for Allergen. I'd much rather Pfizer invested the $74 billion doing currently doing nothing in overseas accounts was instead invested in the US for R&D purposes and gainfully employing Americans in high paying jobs. Unfortunately Pfizer would have to fork over up to one third - $25 billion in tax - to repatriate that $74 billion; from a corporate view and obligatory duty to the shareholders by the executives that money needs to be invested most wisely for the biggest return - and that means investing in almost any advanced country in the world - other than the US.
2
I love the part where you think that because you've got a few shares, Pfizer's bosses give a hoot about you. i enjoyed even more your solution to this: even lower taxes, and more deregulation.
Even Christians don't actvely cheer on the lions.
Even Christians don't actvely cheer on the lions.
3
Let us renegotiate the terms of our Medicare drug purchases from Pfizer/ Allergan. No more paying the list price with no volume discount. It's time to start bargaining.
3
The fallback position for the corporate leadership in these cases always seems to rest on a fulfillment of its responsibility to its shareholders.
The assumption is that shareholders want nothing else but to maximize profit at any cost. Couched this way, a company can relieve themselves of some of the fallout from deals like this. They become a morally neutral party, subservient to their shareholders and market forces.
The assumption is flawed for many who would draw the line somewhere. Maybe here.
The assumption is that shareholders want nothing else but to maximize profit at any cost. Couched this way, a company can relieve themselves of some of the fallout from deals like this. They become a morally neutral party, subservient to their shareholders and market forces.
The assumption is flawed for many who would draw the line somewhere. Maybe here.
Perhaps the NIH should institute either fees or royalties from these crooks. One disease Pfizer cannot find a pill for is greed - there is no cure.
2
Immediately, Medicare should be allowed to negotiate prices for Part D reimbursements. And the maximum price a foreign domiciled pharmaceutical company can charge Medicare should not be more than what they can get in their new home country. e.g.: Let Pfizer sell drugs in the U.S. at Ireland prices.
3
Isn't it the American way to cheat the government of as much money as possible while complaining about the generally dismal state of the country?
4
As Pfizer and Allergan dodge US taxes, anybody think that they'll take the opportunity to pass along some of their lower costs in the form of reduced prices for their drugs?
Or maybe Congress and Pres. Obama will retaliate by allowing Americans to buy drugs online from other countries, where they cost so much less!
More likely: After some hand waving and shows of indignation, Congress and Obama will do what they've been doing all along -- providing de facto federal guarantees of ever higher drug costs and ever higher corporate profits, while moving to curtail Medicare and other programs that benefit average Americans.
Or maybe Congress and Pres. Obama will retaliate by allowing Americans to buy drugs online from other countries, where they cost so much less!
More likely: After some hand waving and shows of indignation, Congress and Obama will do what they've been doing all along -- providing de facto federal guarantees of ever higher drug costs and ever higher corporate profits, while moving to curtail Medicare and other programs that benefit average Americans.
4
Let me make sure I understand. Pfizer, along with its Big Pharma buddies, has successfully lobbied to prevent consumers from receiving more affordable generics. It has successfully lobbied to prevent consumers from obtaining more affordable prescription drugs from completely reliable pharmacies in Canada. And now it has exploited a loop-hole to move its profits abroad to avoid paying its fare share of corporate taxes?
Oh. Right.
Oh. Right.
9
In circumstances where there are multiple drugs effective against maladies, I hope Medicare and Medicaid starts using the medications of US-based pharma companies in lieu of Pfizer's.
And isn't it rich--US law forbids the government from negotiating lower prices from drug companies, including Pfizer, so PFE gets far higher prices for its products in the US than elsewhere in the world (including Ireland). So it gets inflated prices and now avoids the taxes needed to help pay those inflated prices.
Congress, get to work.
And isn't it rich--US law forbids the government from negotiating lower prices from drug companies, including Pfizer, so PFE gets far higher prices for its products in the US than elsewhere in the world (including Ireland). So it gets inflated prices and now avoids the taxes needed to help pay those inflated prices.
Congress, get to work.
7
Fiorini was right when saying that the reason we are seeing all these mergers is because companies have to be super-sized in order to deal with the out of control federal bureaucracy. And if Pfizer's move was not illegal, I applaud them for finding legal ways around the burdensome tax code that has the corporate tax in the world.
3
Many -- including the NYT -- are overlooking important details. First, our tax system is not compatible with that of our trading partners. The EU and many APAC countries have adopted a tax system with a low rate -- in the low to lid 20% -- and broadened the base by eliminating many of the targeted tax benefits (which benefit some companies but not others). Our trading partners also do not further tax profit tax in other non-tax haven countries. The US has chosen not to adopt a similar system, making us an outlier ripe for these transactions.
Second, teh NYT sites the average rate by all corporations not the Pfizer's effective rate, so Pfizer may not be benefiting from the US corporate welfare provisions enough to offset the high rate (if they did they wouldn't do the inversion). But they must continue to compete with companies paying a lower rate on a broader base that are allowed to compete with Pfizer in US and abroad.
The solution is to conform our tax system to that of our trading partners in a revenue neutral way -- lower the rate but broaden the base to generate the same amount of revenue. The developed countries have put a mechanism in place to police large corporations so that their profits earned in each of those countries are taxed there.
Second, teh NYT sites the average rate by all corporations not the Pfizer's effective rate, so Pfizer may not be benefiting from the US corporate welfare provisions enough to offset the high rate (if they did they wouldn't do the inversion). But they must continue to compete with companies paying a lower rate on a broader base that are allowed to compete with Pfizer in US and abroad.
The solution is to conform our tax system to that of our trading partners in a revenue neutral way -- lower the rate but broaden the base to generate the same amount of revenue. The developed countries have put a mechanism in place to police large corporations so that their profits earned in each of those countries are taxed there.
5
Bill Clinton said this sort of corporate behavior is okay at his Sept 2014 Clinton Global Initiative gathering. He said "this is their money", then a good slice of it become his money when they donated to his doing-better-by-doing-good fund afterwards. This is not a quid pro quo?
http://www.nytimes.com/politics/first-draft/2014/09/23/bill-clinton-on-i...
1
It is shameful that giant Pfizer is allowed to rob the American people by a slick tax dodging "inversion". It's beyond disgraceful that there is no legislation in place to prevent this kind of unsavory and unethical behavior to continue. Clearly, it's Republicans in Congress digging in their heels about putting into law legislation that is already in the hopper.
5
It is easy to blame the greedy corporations. And it makes you feel good and righteous. But does not solve the problem. If the inversions are made illegal, corporations will find other ways. The pressure to cut expenses (including tax expenses) and increase profits is relentless. We need a tax reform and maybe a reform in the governance structure of corporations. Ultimately, it is all about incentives. If we want corporations to stay and expand in the US instead of fleeing abroad, we need to create the proper incentive structure.
4
No, its legal and its wise business. Stop these deals and companies won't even open here...they WILL go elsewhere.
3
Paying taxes is patriotic. If you make it, you have an obligation to pay your fair share. But this only applies to the 99% - not the corporations. Allowing corporations to evade their tax obligations is the result of unfettered capitalism driven by rampant greed. They justify their actions and drive them home with 24/7 propaganda. Amerika, what a country.
3
Do you tax any deductions on your income taxes? Unpatriotic!
1
So what's a "fair share", Paul? Personally, I think a 39.6% federal rate is way, way, beyond anyone's "fair share." The fact that the federal government, together with the states and cities can take half of someone's income or more, is utterly outrageous and immoral. And way beyond anyone's fair share.
1
@drs
"Fair share" is certainly open to interpretation. But we KNOW "corporate titans" or "hedge fund masters of the universe" don't pay anything close to the top rate. Unlike you and I they have armies of lawyers and proclivity to willfully disregard the tax laws.
"Fair share" is certainly open to interpretation. But we KNOW "corporate titans" or "hedge fund masters of the universe" don't pay anything close to the top rate. Unlike you and I they have armies of lawyers and proclivity to willfully disregard the tax laws.
1
As well as a transaction tax on so called gambling "hedges", there could also be a transaction tax in trading of shares of American companies based overseas. The 35% corporate tax rate could be reduced 1% for every 2% before tax profit sharing with the minimum tax at 25%--profit sharing spread equally according to pay for all employees. (at 25%, profit sharing would be 20%) This would tie pay to performance across the board.
Don't count on any of this, as our current Congressmen/women, are corporate employees, thanks to our current campaign finance laws. Roberts and Alito on the SCOTUS, former corporate lawyers, were appointed for this reason, as well. Most loopholes were also written into law by corporate interests.
Recall that the phony insurance (AIG) on CDOs was also written overseas. Legalized quid pro quo corruption on a massive scale.
Don't count on any of this, as our current Congressmen/women, are corporate employees, thanks to our current campaign finance laws. Roberts and Alito on the SCOTUS, former corporate lawyers, were appointed for this reason, as well. Most loopholes were also written into law by corporate interests.
Recall that the phony insurance (AIG) on CDOs was also written overseas. Legalized quid pro quo corruption on a massive scale.
4
Tax evasion is a crime, however, tax avoidance is not. Indeed, tax avoidance is ADVOCATED by the IRS. The tax code is about 75,000 pages. I blame no person or corporation for doing what is most advantageous to them. If you don't like the consequences of the tax code, blame Congress, not the taxpayer.
6
But the taxpayers voted for Congress so in the end they are responsible.
The answer to the problem is simple, just not easy. The corporate tax code needs to be rewritten for a 21st century world. Earnings should not be taxed twice, capital investments should be expensed, and tax oriented deductions eliminated. This would allow a lower rate and incent capital investment….
4
The US has some of the highest corporate tax rates in the world at 35%, even higher than France (33%), Belgium (33%) and Italy (27.5%), and as an added bonus, taxes global income. A German (15%), Swiss (8.5%), UK (20%), or Dutch (25%) company has both a lower tax rate and is often allowed exemptions on their international incomes. US companies, if they bring back their profits to the US, pay the full wack of tax on this money, plus are also hit by local taxes. I find it fascinating that this editorial says that Pfizer's income going forward, "will be taxed at global tax rates that are generally lower than American tax rates" without any hint of causality or irony that the US is now a more expensive tax jurisdiction than global norms, and a full 22.5% higher than corporate tax rates in Ireland. Rather than excoriating Pfizer, perhaps the editors should be asking why our politicians are keeping in place absurd tax disincentives to hold profits abroad and not repatriate them to America due to the lack of political will to institute a more competitive corporate tax rate? The current tax situation puts US business at an enormous disadvantage, particularly when compared to that of Germany and the UK. The US tax code is a mess and needs to be fixed, for both corporations and individuals. THAT is why Pfizer is making this deal.
5
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.
Gregory v. Helvering, 69 F.2d 809, 810 (2d Cir. 1934)
Gregory v. Helvering, 69 F.2d 809, 810 (2d Cir. 1934)
8
Many point out that the US corporate tax rate is effectively lower that 35% after deductions and is in fact one of the lowest rates. If this were the case there would be no need for these inversions. If the US rate was near the bottom you would expect to see Irish and British companies incorporating in the US but you do not. The tax code should be simplified and the rate lowered to eliminate the need and incentive for complex tax strategies and to encourage all businesses, not only those with extensive accounting and lobbying resources, to thrive.
6
Corporate corruption at its best. Pharma ready and willing to cash in for its products in the market...but not so fast when contributing to society its due in taxes. Romney's 'law' that it is our obligation to pay as little tax as possible seems to be at work here, corporate welfare at its best if the market could remain unregulated, allow greed free reign. No shame? Apparently not, if they can get away with it. Some day, once the U.S. is willing to recognize the International Court of Justice, among other common sense world measures to achieve progress and justice, we could ask countries like Ireland to modify their low-tax attraction luring a 'Pfizer' to cheat on us, retain its status of beneficence instead. Solidarity is a tall order, essential as well.
Pfizer has always been the biggest and the slimiest of the big drug companies, so much so that doctors, or at least I myself, take any claim they make for their products with a grain of salt. I still don't understand why their patent on Lipitor was extended beyond the usual time limit, why they get away with two different shaped pills for the branded version of this same product, one in Canada and a more expensive one in the US. Everything they say and even government endorsements of their products I assume is the result of manipulative corporate action and undue corporate influence of the federal government. This latest tax gimmick does not surprise me.
4
That tax code is a mess, and impossible to revise, so it needs to be scrapped. Interesting side note is the ballyhoo over Woodrow Wilson and racism. One of the humorous statements about Wilson's good deeds was he was the father of the income tax. That's hilarious. For that reason alone, his name should be forever purged from our history!
We must dump the tax code and the IRS, and institute the Fair Tax on consumption, with a flat tax rate for corporations (no loopholes) that is competitive in the global economy. Comments in this editorial about the NIH and other social programs is really irrelevant to this issue. I do agree with NYT editorial board about Citizen's United and our bought and paid for political hacks....on both sides of the aisle. Time for big changes, and the Fair Tax is one way to solve a lot of issues.
We must dump the tax code and the IRS, and institute the Fair Tax on consumption, with a flat tax rate for corporations (no loopholes) that is competitive in the global economy. Comments in this editorial about the NIH and other social programs is really irrelevant to this issue. I do agree with NYT editorial board about Citizen's United and our bought and paid for political hacks....on both sides of the aisle. Time for big changes, and the Fair Tax is one way to solve a lot of issues.
3
Pfizer makes a deal to cut its taxes,making more money for its executives and shareholders. The editorial doesn't mention keeping people employed. Its called capitalism. The definition, "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." That is what we have here. It isn't surprising that the editorial condemns this action. What is irking though is the response of those who berate high taxes and government interference. Those two elements are the brakes to a vibrant and growing economy they say But now they want to condemn Pfizer and guess what? Pass a governmental law that prevents them from merging and even punishes them. Political hypocrisy is what that is. Maybe we could look at modifying the reason companies are leaving here if it is bad for the country. According the news agencies, there are a lot of individuals, especially retirees, who are leaving our country and even renouncing their citizenship because of taxes. Do the politicians plan to write a law to stop that or punish those who leave? You don't write a law against polio. Your develop a vaccine.
1
$1 billion a year is a powerful incentive for any entity – which exists only as a piece of paper in some secretary of state’s office – to file a piece of paper somewhere else. You call Pfizer “American”; why? Because that paper is on file here? Because it’s HQ is here? THAT can be attended to as well. Is that really where your envy leads; force the company to relocate a lot of jobs, too? Is that a dare you really want to make?
One of the myths perpetrated by greedy, graspy leftists is that because corporate taxes are a small percentage of GDP, or writeoffs exist, the marginal rate doesn’t matter. Corporate taxes as a % of collections are down because there are fewer taxpaying corporations; most companies are now sub (s) entities, LLCs, or the like. And write offs are great, IF you’ve managed to game the “green energy” system.
Put simply, if YOUR rate is 35% (plus state levies) you don’t care what someone else’s rate is, or that it’s a low percentage of GDP.
In short, to believe the left, you have to believe that Pfizer and other entities don’t understand basic math, and that they’re fools to relocate to Canada and Ireland. The headlines demonstrate who understands economics better.
The answer is simple: eliminate corporate taxes altogether. Become the world’s biggest tax haven.
And reap the resulting prosperity.
Or, let leftist envy prevail, and see opportunity continue to flow overseas.
One of the myths perpetrated by greedy, graspy leftists is that because corporate taxes are a small percentage of GDP, or writeoffs exist, the marginal rate doesn’t matter. Corporate taxes as a % of collections are down because there are fewer taxpaying corporations; most companies are now sub (s) entities, LLCs, or the like. And write offs are great, IF you’ve managed to game the “green energy” system.
Put simply, if YOUR rate is 35% (plus state levies) you don’t care what someone else’s rate is, or that it’s a low percentage of GDP.
In short, to believe the left, you have to believe that Pfizer and other entities don’t understand basic math, and that they’re fools to relocate to Canada and Ireland. The headlines demonstrate who understands economics better.
The answer is simple: eliminate corporate taxes altogether. Become the world’s biggest tax haven.
And reap the resulting prosperity.
Or, let leftist envy prevail, and see opportunity continue to flow overseas.
4
In the Times' lead article on the subject, Pfizer says it wants to make this merger so it can increase it's profits and thus be able to hire more people in the US. Wow, what a lie. Donald Trump's cheering Muslims comment is a model of veracity by comparison. In fact, mergers almost always result in layoffs. Sometimes, massive layoffs.
Then there's the off-shore aspect. Right now, this shouldn't result in layoffs, but if the federal government decides to put pressure on the company, it could simply move jobs overseas to make it look more like an foreign company.
Either by merger or off-shoring, American workers will lose. And those that buy Pfizer's PR statement, well, I'll see you at the next Trump rally.
Then there's the off-shore aspect. Right now, this shouldn't result in layoffs, but if the federal government decides to put pressure on the company, it could simply move jobs overseas to make it look more like an foreign company.
Either by merger or off-shoring, American workers will lose. And those that buy Pfizer's PR statement, well, I'll see you at the next Trump rally.
4
As a healthcare consumer advocate and daughter of a long since retired (40 years+ ago) Pfizer executive, I am disgusted by this move. It's certainly not the move that would have been made by the Pfizer my father was proud to be part of.
Pfizer executives who decided on this move and all other pharmaceutical leaders who think profit justifies all else, please know this: Pharmaceutical profiteering causes very real financial and physical harm to millions of living, breathing human beings. Maybe you can discuss the gravity of that responsibility at your next shareholder off-site at a 5-star hotel in Maui.
Pfizer executives who decided on this move and all other pharmaceutical leaders who think profit justifies all else, please know this: Pharmaceutical profiteering causes very real financial and physical harm to millions of living, breathing human beings. Maybe you can discuss the gravity of that responsibility at your next shareholder off-site at a 5-star hotel in Maui.
6
The government is too greedy. No wonder US companies are moving out.
3
J'accuse!
Has the New York Times lost its sense of smell?
Let the record show that the Times embraces our current system of crony capitalism. Congress has set a top corporate tax rate of 35% but then offers corporations bribes in the form of tax loopholes if they help Members of Congress take care of their favorite special interests.
And then the Times tells corporations they have to stay put and submit to this extortion! You are part of the problem.
Has the New York Times lost its sense of smell?
Let the record show that the Times embraces our current system of crony capitalism. Congress has set a top corporate tax rate of 35% but then offers corporations bribes in the form of tax loopholes if they help Members of Congress take care of their favorite special interests.
And then the Times tells corporations they have to stay put and submit to this extortion! You are part of the problem.
4
If you want to stop inversion become competitive. Some of your readers site the good old days of the 50's when corporate tax rates were higher and public universities were well funded. As progressives love to point out the world has changed over the past 60 years and we need to change with it. In the 50's we had segregation, illegal abortion and zero homosexual and transgender rights. Funny how the liberals pine back for the good old days when it comes to taking someone's money. Every country is competing for American companies and yes they have loopholes in their tax codes as well. The bottom line is corporations wouldn't be doing it if it wasn't allowed. Reduce the rate and let's see how many don't invert. In the meantime stop griping about a smart business strategy and call for change to make us more competitive.
5
I think you might also note that that "golden age" was in and of itself an anomaly. Unions flourishing, wages rising, growing middle class, and high marginal rates only worked because most of the rest of the world economy was still in tatters following World War 2. It took decades for worldwide industrial production and productivity to return to pre-war levels. The assumption that the 1950s proves anything is a myth.
8
Companies that engage in such tax avoidance by shifting their nominal headquarters abroad should lose all the protections and services provided by the US government and taxpayers. They should be required pay for the research that American taxpayers fund, and make taxpayers shareholders in the product, to obtain royalties on commercial development. They should be charged fees for services, just as out-of-district school children pay tuition to a district. They should lose the protection of the American government. Let Ireland provide security to their factories and shipping. And they should lose all tax credits available to American companies which brings down the 35% rate to near zero for some of the biggest, most profitable companies in the country - will Pfizer say they make no sales from Americans?
1
"Companies that engage in such tax avoidance by shifting their nominal headquarters abroad should lose all the protections and services provided by the US government and taxpayers."
Do you realize that we in the U.S. provide "protection and services" even to the completely foreign companies, the ones that have no headquarters of any kind in the U.S.? The protection of the law (and police and firefighter protections for factories etc) protects everyone who is operating in the U.S., irrespective of their citizenship status. Or would you like to change this, so that police first asks about your citizenship status before deciding whether you deserve a protection from a mugger on the street?
Do you realize that we in the U.S. provide "protection and services" even to the completely foreign companies, the ones that have no headquarters of any kind in the U.S.? The protection of the law (and police and firefighter protections for factories etc) protects everyone who is operating in the U.S., irrespective of their citizenship status. Or would you like to change this, so that police first asks about your citizenship status before deciding whether you deserve a protection from a mugger on the street?
1
Greed unclothed. Selfishness exposed. Lack of civic responsibility or ethical commitment to community or any sense of responsibility to country becomes obvious in the Pfizer/Allergan board rooms. I don't know how the individuals who made this decision sleep at night. Perhaps they are too busy slapping themselves on the backs and counting their gold in their vaults, but what they are doing is disgusting.
If our Congress lets this pass then each of them is culpable to degrading the very backbone of our national budget.
You cannot enjoy the fruits of freedom without paying your fair share.
Pfizer/Allergan has just exposed themselves as a leech on American good-will, a company who is irresponsible. They have become "takers" and expect the rest of us to pay for the benefits of America they wish to enjoy while they exploit our market. DISGUSTING corporation = Disgusting values in the board room.
If our Congress lets this pass then each of them is culpable to degrading the very backbone of our national budget.
You cannot enjoy the fruits of freedom without paying your fair share.
Pfizer/Allergan has just exposed themselves as a leech on American good-will, a company who is irresponsible. They have become "takers" and expect the rest of us to pay for the benefits of America they wish to enjoy while they exploit our market. DISGUSTING corporation = Disgusting values in the board room.
7
How is what Pfizer did any different from an individual finding a tax deduction through a home-office or other tax-motivated practice ? The government is supposed to govern with the consent of the governed. But liberals forget that this freedom applies both to those who pay taxes as well as for a large part of the public that no longer pays taxes.
In France (which is far more tolerant of high taxes than we are), they had to rescind a tax on millionaires because the affluent simply decided to leave the country rather than pay the exorbitant 75% tax. Are you listening Hillary ?
We've got the highest corporate tax rates in the developed world. And yes, some companies use writeoffs to reduce their tax bill. But that increases the need for tax reform - not decreases it. But liberals continue to obscure the problem as this article does saying that such taxes would "pay for a host of government programs — including education, scientific research and other services that also benefit corporations." The amount of money that government spends on education and research is rounding error. Over 62% of our $3.5 tn budget is spent on redistribution - moving money from one pocket to another. And that's about as productive as Pfizer moving money from one locale to another.
Sure, we need to take care of the most vulnerable (elderly, children). But for the rest of us, shouldn't the focus be on how we can better take care of ourselves through education and family ?
In France (which is far more tolerant of high taxes than we are), they had to rescind a tax on millionaires because the affluent simply decided to leave the country rather than pay the exorbitant 75% tax. Are you listening Hillary ?
We've got the highest corporate tax rates in the developed world. And yes, some companies use writeoffs to reduce their tax bill. But that increases the need for tax reform - not decreases it. But liberals continue to obscure the problem as this article does saying that such taxes would "pay for a host of government programs — including education, scientific research and other services that also benefit corporations." The amount of money that government spends on education and research is rounding error. Over 62% of our $3.5 tn budget is spent on redistribution - moving money from one pocket to another. And that's about as productive as Pfizer moving money from one locale to another.
Sure, we need to take care of the most vulnerable (elderly, children). But for the rest of us, shouldn't the focus be on how we can better take care of ourselves through education and family ?
9
I think the accountants at the New York Times are hard at work at tax avoidance as well.
The New York Times Company New York
IHT LLC Delaware
International Herald Tribune S.A.S. France
IHT Kathimerini S.A. (50%) Greece
International Business Development (IBD) France
International Herald Tribune (Hong Kong) LTD. Hong Kong
Beijing Shixun Zhihua Consulting Co. LTD. People’s Republic of China
International Herald Tribune (Singapore) Pte LTD. Singapore
International Herald Tribune (Thailand) LTD. Thailand
IHT (Malaysia) Sdn Bhd Malaysia
International Herald Tribune B.V. Netherlands
International Herald Tribune GMBH Germany
International Herald Tribune (Zurich) GmbH Switzerland
International Herald Tribune Japan GK Japan
International Herald Tribune Ltd. (U.K.) United Kingdom
International Herald Tribune U.S. Inc. New York
The Herald Tribune - Ha’aretz Partnership (50%) Israel
London Bureau Limited United Kingdom
New York Times Digital LLC Delaware
Northern SC Paper Corporation (80%) Delaware
NYT Administradora de Bens e Servicos Ltda. Brazil
NYT Group Services, LLC Delaware
NYT News Bureau (India) Private Limited India
Rome Bureau S.r.l. Italy
NYT Capital, LLC Delaware
Donohue Malbaie Inc. (49%) Canada
Midtown Insurance Company New York
NYT Shared Service Center, Inc. Delaware
International Media Concepts, Inc. Delaware
The New York Times Distribution Corporation Delaware
The New York Times Syndication Sales Corporation Delaware
The New York Times Company New York
IHT LLC Delaware
International Herald Tribune S.A.S. France
IHT Kathimerini S.A. (50%) Greece
International Business Development (IBD) France
International Herald Tribune (Hong Kong) LTD. Hong Kong
Beijing Shixun Zhihua Consulting Co. LTD. People’s Republic of China
International Herald Tribune (Singapore) Pte LTD. Singapore
International Herald Tribune (Thailand) LTD. Thailand
IHT (Malaysia) Sdn Bhd Malaysia
International Herald Tribune B.V. Netherlands
International Herald Tribune GMBH Germany
International Herald Tribune (Zurich) GmbH Switzerland
International Herald Tribune Japan GK Japan
International Herald Tribune Ltd. (U.K.) United Kingdom
International Herald Tribune U.S. Inc. New York
The Herald Tribune - Ha’aretz Partnership (50%) Israel
London Bureau Limited United Kingdom
New York Times Digital LLC Delaware
Northern SC Paper Corporation (80%) Delaware
NYT Administradora de Bens e Servicos Ltda. Brazil
NYT Group Services, LLC Delaware
NYT News Bureau (India) Private Limited India
Rome Bureau S.r.l. Italy
NYT Capital, LLC Delaware
Donohue Malbaie Inc. (49%) Canada
Midtown Insurance Company New York
NYT Shared Service Center, Inc. Delaware
International Media Concepts, Inc. Delaware
The New York Times Distribution Corporation Delaware
The New York Times Syndication Sales Corporation Delaware
10
This is yet another example of corporate power run amok, of corporations whose only allegiance is to the interests (sometimes real, sometimes wrongly perceived) of their stockholders, with nothing left over for the nations and communities that they once called home.
In 21st-century America, the idea that the government has no role in regulating business is taken to extremes. Government is supposed to be the people's voice that establishes the rules of the corporate game. At another time when the corporate sector rode roughshod over the people's interests, we had a President who responded by breaking up monopolies; yet, in our era, corporate power has been allowed to accumulate at ever increasing speed. To paraphrase Bernie Sanders' comment about Wall Street, the government doesn't regulate corporations, corporations regulate the government.
What could be more tailor-made for Bernie's campaign than the Pfizer case? It combines issues of corporate power, taxes and drug prices. This isn't just an issue on the left; I've known many conservatives over the years who don't like excessive corporate power. No Republican candidate is making an issue of it but Bernie could sweep up many otherwise Republican votes, as is his history in Vermont. If this issue caught fire, it might sweep aside his competitors - including Hillary.
But a little cold water - the media will keep this on the business pages and will make sure Bernie won't be reported if he talks about it.
In 21st-century America, the idea that the government has no role in regulating business is taken to extremes. Government is supposed to be the people's voice that establishes the rules of the corporate game. At another time when the corporate sector rode roughshod over the people's interests, we had a President who responded by breaking up monopolies; yet, in our era, corporate power has been allowed to accumulate at ever increasing speed. To paraphrase Bernie Sanders' comment about Wall Street, the government doesn't regulate corporations, corporations regulate the government.
What could be more tailor-made for Bernie's campaign than the Pfizer case? It combines issues of corporate power, taxes and drug prices. This isn't just an issue on the left; I've known many conservatives over the years who don't like excessive corporate power. No Republican candidate is making an issue of it but Bernie could sweep up many otherwise Republican votes, as is his history in Vermont. If this issue caught fire, it might sweep aside his competitors - including Hillary.
But a little cold water - the media will keep this on the business pages and will make sure Bernie won't be reported if he talks about it.
2
We must Demand that this merger be stopped! Call today and tell the Federal Trade Commission and the U.S. Justice Department Antitrust Division to say NO to this merger.
Contact Ms. Edith Ramirez, Chair, FTC at (202) 326-2222
Contact the Justice Department, William J. Baer, Assistant AG for the Antitrust Division
(202) 514-2000
https://www.ftc.gov/about-ftc/commissioners
http://www.justice.gov/atr/meet-assistant-attorney-general
Contact Ms. Edith Ramirez, Chair, FTC at (202) 326-2222
Contact the Justice Department, William J. Baer, Assistant AG for the Antitrust Division
(202) 514-2000
https://www.ftc.gov/about-ftc/commissioners
http://www.justice.gov/atr/meet-assistant-attorney-general
My advice to Americans is to avoid drugs made by this company and do not elect politicians who take money from them. Make sure those who represent you know how upset you are.
2
These tax gambits are examples of nature taking its course. All the convoluted, punitive and self-defeating suggestions I've read here are the equivalent of trying to beat back the tides.
I think we should take a Confucian approach, bend with the breeze, and lower corporate income-tax rates. We live in a globalized economy, where decisions made in Dublin affect people in Des Moine. Millions of good, American jobs have gone overseas because of our failure to acknowledge this reality.
Lowering corporate tax rates is not much different than any other measure to improve the business climate, like job training and improving transportation and utility infrastructure. And it has the added benefit of being simple. It will bring back jobs and capital, and almost certainly lead to an increase in tax revenue. And did I mention that it's simple?
I think we should take a Confucian approach, bend with the breeze, and lower corporate income-tax rates. We live in a globalized economy, where decisions made in Dublin affect people in Des Moine. Millions of good, American jobs have gone overseas because of our failure to acknowledge this reality.
Lowering corporate tax rates is not much different than any other measure to improve the business climate, like job training and improving transportation and utility infrastructure. And it has the added benefit of being simple. It will bring back jobs and capital, and almost certainly lead to an increase in tax revenue. And did I mention that it's simple?
5
Inversions are wrong on so many levels, it makes my stomach spin.
How much is enough? How much money do these greedy officers need?
These companies benefit from all that America has to offer and yet they don't want to pay for privilege of doing business here. It's akin to people that I've met that have moved to NV from CA to avoid personal income taxes. They are willing to give up living in the most vibrant and beautiful places on earth to retreat to the sands of NV because they don't want to pay taxes. Some people are forced by economics to need the move. But many don't. Perhaps the Pfizer officers should be required to move to Ireland.
Congress. Do something. Oh, that's right. Doesn't big pharma own the Congress? You betcha.
How much is enough? How much money do these greedy officers need?
These companies benefit from all that America has to offer and yet they don't want to pay for privilege of doing business here. It's akin to people that I've met that have moved to NV from CA to avoid personal income taxes. They are willing to give up living in the most vibrant and beautiful places on earth to retreat to the sands of NV because they don't want to pay taxes. Some people are forced by economics to need the move. But many don't. Perhaps the Pfizer officers should be required to move to Ireland.
Congress. Do something. Oh, that's right. Doesn't big pharma own the Congress? You betcha.
2
And I am sure this mega-merger of 2 pharmaceutical giants will go far to reduce the cost of prescription drugs in the US.
"They say they cannot remain competitive if they have to pay tax on profits at the relatively high United States top rate of 35 percent.
That claim does not stand up. American multinationals routinely take advantage of write-offs that reduce the top rate to a much lower level. Moreover, even an inverted company is supposed to pay tax on earnings generated in the United States at American rates."
Corporations already do not pay the top tax rate on most earnings. Yet, instead of a competitive corporate tax rate, the Editorial Board thinks what we need is an expensive, expansive, and complicated set of new rules to prevent these inversions, that even it says they will find a way around: "The Treasury Department under President Obama has issued rules to curb the practice. But the Pfizer and Allergan hookup is expected to get around these constraints."
The solution is clear and it has nothing to do with additional layers of law and regulations that lawyers, bankers, and corporate chieftains will be paid even more to skirt around; if the tax rate and tax code is not competitive, which this deal clearly shows us as the case, then the tax code needs to be modified or rewritten to become competitive.
What Congress does not have the will to do, which the New York Times Editorial Board clearly stands behind, is improve or rewrite our tax code to nullify the incentives for this sort of behavior.
That claim does not stand up. American multinationals routinely take advantage of write-offs that reduce the top rate to a much lower level. Moreover, even an inverted company is supposed to pay tax on earnings generated in the United States at American rates."
Corporations already do not pay the top tax rate on most earnings. Yet, instead of a competitive corporate tax rate, the Editorial Board thinks what we need is an expensive, expansive, and complicated set of new rules to prevent these inversions, that even it says they will find a way around: "The Treasury Department under President Obama has issued rules to curb the practice. But the Pfizer and Allergan hookup is expected to get around these constraints."
The solution is clear and it has nothing to do with additional layers of law and regulations that lawyers, bankers, and corporate chieftains will be paid even more to skirt around; if the tax rate and tax code is not competitive, which this deal clearly shows us as the case, then the tax code needs to be modified or rewritten to become competitive.
What Congress does not have the will to do, which the New York Times Editorial Board clearly stands behind, is improve or rewrite our tax code to nullify the incentives for this sort of behavior.
2
We wouldn't have inversions if the US, like most other countries, limited taxable corporate income to income earned in the US. Instead, we penalize US corporations by taxing their global income, incentivizing them to organize outside the US.
5
Why is OUR government allowing this merger? Say NO.
The government is "allowing" this merger because we still have some vestiges of a capitalistic system in this country. The government doesn't get to just stop a merger because you want it to. We are a nation of laws and other than possible anti-trust considerations, the government can't stand in the way (nor should it).
6
Much of what occurs in the health care and financial industry fields is not illegal but should be. For example, an old drug recently found to be useful in treating penicillin resistant staph, doxycycline, went from about $10 per course to $1800, as a result of a kind of legalized extortion racket facilitated by congressional action (or inaction), that is simply business as usual in the pharmaceutical industry. The NY Times recently wrote about that particular enterprise. These are examples of the kind of special interest bribery of legislative bodies that we call democracy.
1
Big drug companies are moving headquarters to other countries to avoid our taxes and they are taking their patent protection with them. Those patents allow them to charge much more than they could in a competitive market. The drug companies charge 30%-50% more in the U.S. than they do in other countries.
It's time to make some changes in our drug industry.
First, drug companies must be headquartered in and pay U.S. taxes to hold U.S. patents or to receive federal research monies. If they want to headquarter in Ireland, let them re-patent their drugs in Ireland and either pony up their own research money or get it from Ireland.
Second, their rationale for 20 years of patent protection is their high cost of developing drugs. In fact, an analysis of drug company costs showed that 43% of Pfizer's high drug prices go to profits. At Pfizer profits and sales and marketing expenses are 5 times bigger than what Pfizer spends on research and development of drugs. http://www.bbc.com/news/business-28212223
So, we should fund all drug research and testing through universities and shorten patents for U.S. based drug companies to 8 years - like other countries.
Third, drug companies spend billions on ads to persuade Americans to pressure their doctors to prescribe drugs. We should impose a 50% tax surcharge on this direct to consumer advertising.
Last, Medicare and the Exchanges should negotiate drug prices with drug manufacturers as does virtually every other major country.
It's time to make some changes in our drug industry.
First, drug companies must be headquartered in and pay U.S. taxes to hold U.S. patents or to receive federal research monies. If they want to headquarter in Ireland, let them re-patent their drugs in Ireland and either pony up their own research money or get it from Ireland.
Second, their rationale for 20 years of patent protection is their high cost of developing drugs. In fact, an analysis of drug company costs showed that 43% of Pfizer's high drug prices go to profits. At Pfizer profits and sales and marketing expenses are 5 times bigger than what Pfizer spends on research and development of drugs. http://www.bbc.com/news/business-28212223
So, we should fund all drug research and testing through universities and shorten patents for U.S. based drug companies to 8 years - like other countries.
Third, drug companies spend billions on ads to persuade Americans to pressure their doctors to prescribe drugs. We should impose a 50% tax surcharge on this direct to consumer advertising.
Last, Medicare and the Exchanges should negotiate drug prices with drug manufacturers as does virtually every other major country.
1
I consider myself to be a progressive; however, I cannot understand how trying to lower your tax bill is unpatriotic. What if the rate were 50% or 60% or even higher and inversion posed a legal means of paying less? It would be negligent not to consider inversion. All of us all of the time try to reduce our taxes. Are we thus unpatriotic? The answer here is to amend the Code and stop taxing overseas profits. (This change would also be fair to individual taxpayers.)
7
Reducing your tax burden is not unpatriotic. Renouncing your citizenship, by definition, is.
3
No, you're not unpatriotic. You're complying with IRS guidance to engage in tax avoidance which it considers advisable.
3
Meanwhile, Americans fund the research in our universities, while continuing to be the only country to pay full retail for the products.
4
So, when the members of the NTY editorial board fill our their personal income tax returns, do they take advantage of every possible deduction that they are allowed? One does not have to deduct mortgage interest or real estate taxes or donations, for example, if one chooses not to. But I imagine the members of the board do, and they do so in order to reduce their tax liabilities to the least possible. Yes, they want to maximize their net income. How are they different from Pfizer???
7
NYT's call for new laws to stop inversions is especially ironic given its stated position on illegal immigration. The connection? If you think building walls to prevent people from crossing borders is futile, just try building walls to prevent capital from doing the same.
6
And the rich get richer, the wealthy get wealthier, and the rest of us pay the bills.
4
A rather simple solution that could also solve an election finance joke that makes the US look like a fascist banana republic would be to stop taxing the profits of corporations entirely.The amount of federal tax that corporations is in single digits as a percentage of government revenue and the loss of that revenue could be made up by fixing the personal tax code.Think about it folks, who really pays Pfizer's corporate tax? The consumers and patients that buy and use Pfizer's products.The price of Pfizer products includes a few percentage points to pay whatever taxes they may eventually pay after all the screwing around they do to reduce them. I think I read that GE has paid NO federal corporate tax for the past 5 years.
After telling corporations that they no longer are required to pay Federal taxes we can then tell them that they can no longer make financial contributions to Federal elections, "No taxation, no representation"After 3-4 years of this policy corps will eventually lower prices as they no longer need to set aside part of the price to pay corporate taxes.The shareholders and executives will get an increase in salary and bonus that should be taxed at the ordinary wages tax rate and the shortfall will be made up.And we won't even need to repeal Citizens United.
After telling corporations that they no longer are required to pay Federal taxes we can then tell them that they can no longer make financial contributions to Federal elections, "No taxation, no representation"After 3-4 years of this policy corps will eventually lower prices as they no longer need to set aside part of the price to pay corporate taxes.The shareholders and executives will get an increase in salary and bonus that should be taxed at the ordinary wages tax rate and the shortfall will be made up.And we won't even need to repeal Citizens United.
4
If the Times Editorial Board really feels this kind of behavior should be illegal, I would respectfully suggest that they put their editorial voice behind their convictions----and strongly endorse the only candidate for President who has been speaking honestly and passionately about these issues for 30+ years: Bernie Sanders.
2
If you think this is bad, wait for Congress to approve the Trans-Pacific Partnership. Tax laws will be government by a multi-nation tribunal, not by the United States.
2
If you are angry about the practice of inversion - and you should be - think about this.
Electing someone like Bernie Sanders, who has been merely a gadfly with zero influence in Congress, is not going to fix this problem.
How you fix this problem is realize that your vote counts in every type of election, not just that for president.
This means our lazy progressives and moderates who think voting for a "hope and change" president once every four years is enough have to get it into their stubborn heads that GOP supporters see all elections as important - such as state and gubernatorial races that map out our congressional districts and congressional races both for the house and senate.
Because, in the end, protest votes for a gadfly candidate for president doesn't anything until you get it into your head that our federal government has more than one branch of government.
Electing someone like Bernie Sanders, who has been merely a gadfly with zero influence in Congress, is not going to fix this problem.
How you fix this problem is realize that your vote counts in every type of election, not just that for president.
This means our lazy progressives and moderates who think voting for a "hope and change" president once every four years is enough have to get it into their stubborn heads that GOP supporters see all elections as important - such as state and gubernatorial races that map out our congressional districts and congressional races both for the house and senate.
Because, in the end, protest votes for a gadfly candidate for president doesn't anything until you get it into your head that our federal government has more than one branch of government.
2
As on observer of, and a retiree from "Big Pharma," I have noticed that the principle product of the modern biotech and pharmaceutical industry is "deals." Pfizer, unfortunately, is a leading dealmaker. Innovator in drug research? How passe. They gave that up in the mid-90s.
3
I have an idea.
Since maintaining a corporate tax rate set very high relative to almost everyone else garners so little from large multinationals anyway, let’s double-down on it. I mean, lawyers who invent such things as inversions and the whole toolbox employed by giant multinational businesses to avoid U.S. taxes assessed against ALL global income without allowing deductibility of taxes paid to other jurisdictions, are clearly SO much cleverer than Congress or tax-rule-writing apparatchiks in the I.R.S. They should be incentivized to even MORE cleverness, just to keep alive such creativity in the event that we need to figure out how to respond to a violent alien incursion from space.
What Pfizer is doing is not illegal because this is America, and it’s not unlawful for a company to conduct its operations in a manner consistent with minimizing its legitimate tax burden, so long as the means used aren’t illegal. “Avoiding tax burden” isn’t a crime unless you’re hiding income or lying about deductions. Pfizer hasn’t been accused of either.
But the fact that we, almost alone, drive our multinationals to this is hugely damaging. A large part of the non-U.S.-generated Pfizer income declared to be Irish instead of American will be invested OUTSIDE the U.S., and the jobs generated by such investment will benefit OTHER societies.
So, let’s consider HIKING the corporate tax rate and outlawing multinational companies merging, because this all has worked out so well so far.
Since maintaining a corporate tax rate set very high relative to almost everyone else garners so little from large multinationals anyway, let’s double-down on it. I mean, lawyers who invent such things as inversions and the whole toolbox employed by giant multinational businesses to avoid U.S. taxes assessed against ALL global income without allowing deductibility of taxes paid to other jurisdictions, are clearly SO much cleverer than Congress or tax-rule-writing apparatchiks in the I.R.S. They should be incentivized to even MORE cleverness, just to keep alive such creativity in the event that we need to figure out how to respond to a violent alien incursion from space.
What Pfizer is doing is not illegal because this is America, and it’s not unlawful for a company to conduct its operations in a manner consistent with minimizing its legitimate tax burden, so long as the means used aren’t illegal. “Avoiding tax burden” isn’t a crime unless you’re hiding income or lying about deductions. Pfizer hasn’t been accused of either.
But the fact that we, almost alone, drive our multinationals to this is hugely damaging. A large part of the non-U.S.-generated Pfizer income declared to be Irish instead of American will be invested OUTSIDE the U.S., and the jobs generated by such investment will benefit OTHER societies.
So, let’s consider HIKING the corporate tax rate and outlawing multinational companies merging, because this all has worked out so well so far.
4
The best and perhaps only thing we can all do is to not purchase products marketed by Pfizer/Allergan. The editorial missed an opportunity to tell us what products this combined company sells, at least the ones that bring in the most revenue.
1
Viagra, is a big seller of Pfizer's and they also advertise all those tasteless Viagra commercials on television.
The Pfizer inversion and the failure of Congress to end this type of corporate sham is one more example of the laziness or timidity of Democrats.
As we enter the election season, the Pfizer-Allergan deal presents a golden opportunity for Democratic candidates to show how un-American the Republicans on Capitol Hill are in their slavish obedience to the demands of corporate lobbyists.
As we enter the election season, the Pfizer-Allergan deal presents a golden opportunity for Democratic candidates to show how un-American the Republicans on Capitol Hill are in their slavish obedience to the demands of corporate lobbyists.
2
The most horrifying story in yesterday's news pages was not the ongoing terror threat in Europe, but this offensive merger. Maybe the U.S. does need to rethink its corporate tax model, I don't know, but what I do know is that the message to the average person is clear: companies started here and built by American labor don't give a damn about this country, its workers, or making the world a better place. The tax evaders who will get rich off this merger are already rich. But they need more! more! more! so their children and children's children can continue to hold on to the reigns of power.
3
ummm, no. The most horrifying story in yesterday's news pages was the ongoing terror threat in Europe and by extension, western civilization. Studies show that it's very hard to pay taxes with your head cut off.
3
Rather than looking at the downside of potential lost corporate tax revenues, the Times editorial board should consider what the impact would be if the acquisition were done as a traditional merger. Pfizer's headquarters in NYC would be shut down, all the employees moved to Ireland, and the U.S. operation reduced to a division of a larger entity. The taxable income from those Pfizer employees would move over to Ireland. Or perhaps that is the outcome the Times would like.
A lower corporate tax rate, without taxing foreign earnings that have already been taxed in the nation where they are generated, is needed. It is how all our states already tax individual and corporate income when income is earned in another state and the principle should apply to corporate taxes at a global level as well.
A lower corporate tax rate, without taxing foreign earnings that have already been taxed in the nation where they are generated, is needed. It is how all our states already tax individual and corporate income when income is earned in another state and the principle should apply to corporate taxes at a global level as well.
4
the purpose of the federal tax was to raise revenue for the government NOT as this editorial states "a way to repay the public for benefits companies received from federal support".
This editorial does not address tax policy. It is just an almost irresponsible polemic that really misses the economic reality of doing business in a global age.
This editorial does not address tax policy. It is just an almost irresponsible polemic that really misses the economic reality of doing business in a global age.
4
The solution to such shenanigans is to change the tax code so that avoidance is impossible. It can be done to everyone's benefit: revenue should come from tax bases with an inelastic supply as Joseph Stiglitz has argued in several articles.
This means not only *land* as Henry George once advocated, but any other source of wealth not made by human hands or minds. Centrally important here is the DNA and cell lines that are elements of nature, even though our courts have mistakenly made them *patentable.*
When Jonas Salk identified the polio vaccine in 1955, he was interviewed shortly thereafter by Edward R. Murrow. “Who owns the patent on this vaccine?” he asked. “Well,” Salk answered, no doubt taken aback by the question. “The people, I would say. There is no patent. Could you patent the sun?” Were such tax regimes in force companies like Pfizer would pay both taxes on the use of nature but royalties for using government funded research that leads to much of their innovation.
This means not only *land* as Henry George once advocated, but any other source of wealth not made by human hands or minds. Centrally important here is the DNA and cell lines that are elements of nature, even though our courts have mistakenly made them *patentable.*
When Jonas Salk identified the polio vaccine in 1955, he was interviewed shortly thereafter by Edward R. Murrow. “Who owns the patent on this vaccine?” he asked. “Well,” Salk answered, no doubt taken aback by the question. “The people, I would say. There is no patent. Could you patent the sun?” Were such tax regimes in force companies like Pfizer would pay both taxes on the use of nature but royalties for using government funded research that leads to much of their innovation.
3
My peers at Hospira could not understand why I would leave the company after the acquisition was announced, but before the promised early bonuses were paid when the acquisition was finalized. I guess it was because for me, I needed to be able to sleep at night. I don't find it at all comforting to know just how right I wasn't that decision. I had a great job, working with great people at what I thought was a great company. All of that ruined for the sake of money, of which apparently this company's does not have enough.
3
“at a cost to the Treasury conservatively estimated at $20 billion over 10 years.”
As Dr. Evil would say, that’s “2 BILLion dollars a year”. Corporations seeking to legally minimize taxes are no more evil than millions of higher income tax payers benefiting from the mortgage tax deduction costing the US Treasury real money, $70 billion a year. And the mortgage interest deduction is terrible social policy because it incentivizes the construction of big houses and incurring big debts and benefits only relatively wealthy people. If corporate inversions are depriving useful social programs so is President Obama with his $50,000 mortgage interest deduction on his 6200 square foot Chicago house.
As Dr. Evil would say, that’s “2 BILLion dollars a year”. Corporations seeking to legally minimize taxes are no more evil than millions of higher income tax payers benefiting from the mortgage tax deduction costing the US Treasury real money, $70 billion a year. And the mortgage interest deduction is terrible social policy because it incentivizes the construction of big houses and incurring big debts and benefits only relatively wealthy people. If corporate inversions are depriving useful social programs so is President Obama with his $50,000 mortgage interest deduction on his 6200 square foot Chicago house.
5
I had the same reaction. If the $2B number is just Pfizer then I guess it is a lot of money. If it is s total across companies (which I assume is the case) then it is peanuts in the big scheme of things. Surely there are more important problems to worry about.
1
What about the Sherman Anti Trust Laws that Reagan stopped enforcing? Did they just go away or are they still on the books and not being enforced? We have the laws to stop these monopolies from being created. At some point all competition is going to be wiped out and innovation will stop, small business will not be able to compete. Small business has been back bone of hiring people, is that still the case or did technology wipe that out too?
2
Julie, I would be very interested in your sources regarding the non-enforcement of the Sherman Anti-Trust Act by the Reagan administration. Please provide links to the academic journals. Thank you.
1
While I don't support these types of deals I would like to challenge at least one claim in the article when you write that the deal "enriches shareholders and executives while shortchanging the public". Many "shareholders" are members of the "public". I hold several ETF's and mutual funds in my 401-K and investment portfolio that includes Pfizer. I imagine quite a few of your readers do the same. I think the NYTimes Editorial Borad could communicate a more nuanced and sophisticated message here.
3
Rob:
Quite right.
You might have mentioned that as an "enriched" shareholder you pay taxes TWICE on the same profits. First you (through your shares in Pfizer) pay corporate income taxes. Second you pay personal income tax on the same profit when it is distributed.
Quite right.
You might have mentioned that as an "enriched" shareholder you pay taxes TWICE on the same profits. First you (through your shares in Pfizer) pay corporate income taxes. Second you pay personal income tax on the same profit when it is distributed.
3
Time to rethink that no-negotiate drug price thingy of Medicare. Foreign corporations should not benefit from US government largesse.
4
Tax rules are a game. The US government writes them and the companies play by the rules and find ways around them. Damn good will... the government doesn't have any so why should the companies? Revamp the code so it is not the encyclopedia Britannica and you need a PhD in something to read the foreign language. . You cannot cover every contingency in writing. Look the government caused this situation with their greed, their avarice and ther detestation of the workplace. They use fines and fees as a form of back door taxation and reek havoc. Who are we kidding. Both the Republicans and the Democrats are responsible for this situation. Fix the damn tax code and maybe just maybe some of the problems will self alleviate.
5
The NIH expects its grantees to not engage in practices that encourage improper financial gain. And since the NIH already has several ways in which one can be disqualified to receive funding, engaging in this type of behavior--and simply to remain competitive, no less--should be very high up on the list. These companies should be stripped of their funding and not receive one tax dollar as long as they refuse to help refill a pot that has fed them quite well.
50
Please cite the funding the NIH provides to members of PhRMA and BIO. I am under the impression that the vast majority of NIH grants are provided to academic institutions.
2
How is it improper if they're not breaking any laws? This is the corporate equivalent of taking a deduction for the junk you leave at Goodwill.
1
Corporations reap the benefits of the United States- they use our infrastructure for their profits, rely upon our legal system, military and police for their protection, and they capitalize upon our labor and the education of our populace for innovation.
But they have no patriotism whatsoever. Corporations, like this one, are more than happy to profit off of our society, but use every loophole, dodge, and cheat available to keep from re-investing back into the system that made them what they are. They are parasites.
Please don't give me the right-wing sob story about high corporate taxes. Yes, the rates are high on paper, but what corporation actually pays those rates? I - as an individual- paid more taxes last year than some corporations. That is unacceptable and it is an outrage.
What we need is a major re-structuring in our Congress. We need to elect Senators and Representatives who are serious about re-balancing the insane inequities in our economy, and to stop the corporate shell game that bleeds our system and refuses to pay its share.
In short, no more Republicans. Period.
Don't forget to vote.
But they have no patriotism whatsoever. Corporations, like this one, are more than happy to profit off of our society, but use every loophole, dodge, and cheat available to keep from re-investing back into the system that made them what they are. They are parasites.
Please don't give me the right-wing sob story about high corporate taxes. Yes, the rates are high on paper, but what corporation actually pays those rates? I - as an individual- paid more taxes last year than some corporations. That is unacceptable and it is an outrage.
What we need is a major re-structuring in our Congress. We need to elect Senators and Representatives who are serious about re-balancing the insane inequities in our economy, and to stop the corporate shell game that bleeds our system and refuses to pay its share.
In short, no more Republicans. Period.
Don't forget to vote.
62
This piece makes the tired claim that corporations generally pay much less than the 35% top rate (highest in the OECD) through the use of various deductions/tax dodges. That is a gross over-simplification. The fact is that the federal tax code has wildly uneven effects. Companies whose businesses are based on intellectual property (tech and pharma companies, for example) generally can do lots of manipulation to lower their tax rate. Domestic manufacturers, on the other hand, generally pay at or near the maximum rate. In fact, the current tax code could be legitimately seen an imposing on a large penalty on companies that want to make things and employ people in the United States.
1
So, Pfizer, legally a person, is no longer a citizen of the US. It has expatriated. If an individual were to do this, there is a rather harsh regime that causes taxes to be due on a mark to market basis. Surely a similar regime should exist for corporations.
In addition, I propose that these non-citizen's not be permitted to vote in or influence any elections in the US.
Surely, it should be illegal for a non-citizen like Pfizer to contribute to any political campaign in the US. and is should be illegal for any candidate to accept a contribution from an expatriated foreign corporation.
Surely, neither the Republicans nor the Democrats favor permitting foreigners to have any influence over our politicians, laws and courts.
Surely.
In addition, I propose that these non-citizen's not be permitted to vote in or influence any elections in the US.
Surely, it should be illegal for a non-citizen like Pfizer to contribute to any political campaign in the US. and is should be illegal for any candidate to accept a contribution from an expatriated foreign corporation.
Surely, neither the Republicans nor the Democrats favor permitting foreigners to have any influence over our politicians, laws and courts.
Surely.
4
The United States Supreme Court stated decades ago that a taxpayer has not even a patriotic duty to pay one cent more in taxes than required by the law. The problem with the Pfizer deal is not Pfizer; it is merely acting as a rational actor applying basic cost benefits analysis. The problems are two fold. First, the Internal Revenue Code was written for a 1940s economy, and the 2015 world economy is dramatically different. Walter Wrisston wrote about the rise of the information economy in "The Twilight of Sovereignity". In fuedal times land was wealth, and sovereigns could maintain strongarm control over populations and wealth by controlling access to land and agricultur. Today information is wealth, and governments cannot capture or oppress it. Ever wonder why real estate taxes are so high and intangible taxes so low or nonexistent...you cannot move the land to another jurisdiction, so greedy governments can tax it. Which brings us to the second problem. The progressives in this country want to run the country like a fuedal manor...they control the wealth and resources, they collect taxes and duties on all of it, then they divie it up among the serfs, reserving to themselves the best. It is defended by their narrative of self righteousness, but it is Hayek's Road to Serfdom. They try to control flows of land labor and capital to tax it, but today those are available around the world. Information is king, and it moves unimpeded at the speed of light.
1
Boycott Pfizer products. Tell your physician not to prescribe its meds; ask for alternatives including generics. It's all about Pfizer's greed but American consumers have ultimately have the power of the purse.
2
What is the difference between what Pfizer is doing and Warren Buffett's moves to structure his income such that it's treated as capital gains rather than ordinary income? Both are taking advantage of the tax laws as they exist, rather than as what some might wish them to be.
And how many liberals pay higher taxes than they have to because they think certain deductions or credits are unethical?
And how many liberals pay higher taxes than they have to because they think certain deductions or credits are unethical?
13
No more protection for their intellectual properties .... They are foreign corporations and make their drugs overseas ! Government agencies should be able to negotiate drug prices as well as investigate them for price gouging. As soon as they become an Irish company where does the CEO base himself and does he pay Irish taxes. The C-level people should be paid out of that country and should have to pay their personal income tax from Ireland.
This is wrong and just proves Congress is bought !
This is wrong and just proves Congress is bought !
1
"No more protection for their intellectual properties .... They are foreign corporations and make their drugs overseas !"
U.S. provides protection for the intellectual property of foreign corporations as well, just so you know. Intellectual property rights are global and U.S. abides by them, irrespective of whether the right belong to am American entity or a foreign one.
U.S. provides protection for the intellectual property of foreign corporations as well, just so you know. Intellectual property rights are global and U.S. abides by them, irrespective of whether the right belong to am American entity or a foreign one.
1
We, the People, need to create a very personal set of disincentives for people like the Board and Executive Committee of Pfizer to do stuff like this. People at that end of the income pyramid use many more public resources than any other group. Their money needs to be safe and therefore all the financial regulatory apparatus is relied up to do so. They and their children need to be safe, so therefore they rely more upon police departments, border control and even DOD resources than less endowed people. They use air travel much more and go abroad much more. There is a whole network of public resources involved with that. And yet, despite the fact they rely on the government much more than we do, they refuse to pay for the resources they use. How about creating a set of surcharges that kick in at all those pressure points that are selectively applied at those clever boots who indulge in corporate inversions and offshoring? It is all about incentives.
2
Good for Pfizer. Demonizing corporations is easy for Democrats and liberals until you force them to look at the facts. Corporate taxes in the United States are the highest in the developed world. It's time for our leaders to face reality and stop forcing U.S. corporations to relocate to tax friendlier nations in order to make a decent profit.
3
EFFECTIVE US corporate tax rates are below the OECD average -- and effective rates are the only thing that matters in this discussion. And I am sure you know it.
The major reason why corporate income taxes have declined is that more businesses today are structured as LLC's, Sub-chapter S corporations and the like, where income is taxed at the shareholder level rather than at the corporate level. That makes it look like corporate taxes are down while individual taxes are up, but it's the same income.
So the real answer is to treat all corporations the same and tax the income at the shareholder level. That would make inversions pointless, and would have the side benefit of putting lots of corporate lobbyists out of work. After all, if business isn't paying any income tax, then lobbying for tax benefits is pointless.
So the real answer is to treat all corporations the same and tax the income at the shareholder level. That would make inversions pointless, and would have the side benefit of putting lots of corporate lobbyists out of work. After all, if business isn't paying any income tax, then lobbying for tax benefits is pointless.
Legislative action is appropriate. however, until that occurs, American consumers can take action by not using Pfizer or Allergan products. A quick google search reveals Advil, Centrum vitamins, Dimetapp, Robitusin, and Chapstick among dozens of over-the-counter products. Allergan has a large footprint in the contact lens supplies business. Also, consumers can ALWAYS ask a doctor if a prescribed medicine is made by Pfizer. If so, ask for an alternative.
Mitt Romney famously said "corporations are people too". Well, this "person" is renouncing its American citizenship. If that matters to you, do something about it!
Mitt Romney famously said "corporations are people too". Well, this "person" is renouncing its American citizenship. If that matters to you, do something about it!
63
The last merger Pfizer had, they were able to lay off thirty thousand U.S. employees, (NPR).
They just raised the price of Viagra, (30% again), to almost sixty dollars per pill, in Europe it's $5.00.
U.S.A., truly the greatest country on earth! If you are huge corporation.
They just raised the price of Viagra, (30% again), to almost sixty dollars per pill, in Europe it's $5.00.
U.S.A., truly the greatest country on earth! If you are huge corporation.
61
One answer would be to void the patents of any corporation that engages in inversion.
Let someone else make the drug for less, perhaps the laid-off workers would find a way to put together a cooperative generic company, and manufacture here in the US.
We certainly can't afford to be the world's policeman, educate our children, maintain our infrastructure, and care for our elderly, as well as support research, if corporations aren't willing to pay their fair share.
Let someone else make the drug for less, perhaps the laid-off workers would find a way to put together a cooperative generic company, and manufacture here in the US.
We certainly can't afford to be the world's policeman, educate our children, maintain our infrastructure, and care for our elderly, as well as support research, if corporations aren't willing to pay their fair share.
Peter, not $60 a pill, where??
I get a generic for $2.50.
I get a generic for $2.50.
1
"This merger is a tax-dodging maneuver that enriches shareholders and executives while shortchanging the public and robbing the Treasury of money that would pay for a host of government programs..."
Has it occurred to the Editorial Board that neither "the public" nor the Treasury own Pfizer and therefore they (should) have no say in what Pfizer decides to do -- merge with someone, do an "inversion", move out of the country, or close its doors altogether?
The larger point here is -- there is no way to keep companies in the U.S. by force. If they want to become foreign companies, they will do it, even if you somehow make the inversions illegal. The only way to prevent U.S. companies from becoming foreign ones is to make the U.S. an attractive place for them -- and yes, that includes the tax regime.
Has it occurred to the Editorial Board that neither "the public" nor the Treasury own Pfizer and therefore they (should) have no say in what Pfizer decides to do -- merge with someone, do an "inversion", move out of the country, or close its doors altogether?
The larger point here is -- there is no way to keep companies in the U.S. by force. If they want to become foreign companies, they will do it, even if you somehow make the inversions illegal. The only way to prevent U.S. companies from becoming foreign ones is to make the U.S. an attractive place for them -- and yes, that includes the tax regime.
1
Perhaps the solution lies in placing a tax on ownership of stock in foreign companies. Base the tax rate - say 10% per year - on the price of the stock, not the earnings. See how attractive that makes their stock to investors.
Completely ignored so far in the Times' coverage of the Pfizer-Allergan merger is the potential for the loss of tens of thousands of good jobs.
At the end of 2008 --just before Pfizer merged with Wyeth pharmaceuticals-- the company had 81,800 employees. Wyeth had 47,426, for a total between the two of 129,226 workers.
By the end of 2013, the new conglomerate employed only 77,7001 individuals, having shed some 51,000 employees.
Think of it: 51,000 persons or families suddenly have no income. They are thrust out into a job market that is frightening to the most of us. If their jobs pay good wages, they may never find others at the same level of compensation.
This dire situation has become the American way, and millions of our fellow citizens are living lives of desperation as a result.
Does the Times simply consider this devastating impact of mergers unimportant or not newsworthy?
Apparently not!
I find neglecting to mention job loss potential shameful. It reflects journalistic standards that I, as a former investigative newspaper reporter, simply do not comprehend.
At the end of 2008 --just before Pfizer merged with Wyeth pharmaceuticals-- the company had 81,800 employees. Wyeth had 47,426, for a total between the two of 129,226 workers.
By the end of 2013, the new conglomerate employed only 77,7001 individuals, having shed some 51,000 employees.
Think of it: 51,000 persons or families suddenly have no income. They are thrust out into a job market that is frightening to the most of us. If their jobs pay good wages, they may never find others at the same level of compensation.
This dire situation has become the American way, and millions of our fellow citizens are living lives of desperation as a result.
Does the Times simply consider this devastating impact of mergers unimportant or not newsworthy?
Apparently not!
I find neglecting to mention job loss potential shameful. It reflects journalistic standards that I, as a former investigative newspaper reporter, simply do not comprehend.
61
Medtronic, Pfizer-Allergan, etc. Disgraceful examples of corporate tax avoidance. Their corporate leadership and Board members should be exposed for the tax deadbeats and economic sociopaths they are.
A Nobel prize in Economics (or Medicine) should be awarded to the Senators and Congressmen who change our corporate tax laws to create a poison pill for "inversions".
A Nobel prize in Economics (or Medicine) should be awarded to the Senators and Congressmen who change our corporate tax laws to create a poison pill for "inversions".
4
Strip Pfizer's patent protection, legal protections etc as they are no longer good US corporate citizens. They are playing the Heads I Win, Tails You Lose game to their advantage. I hope the state of NY finds a way to tax the hell out of them for their misdeeds. I am certain our GOTP congress does not have the will.
58
So should we do this by Executive Order or by passing a law through Congress? Presumably, this would be after we amended the constitution to remove the restrictions on Ex Post Facto laws. With respect to NY, are you suggesting a punative taxation scheme to tax only those you disagree with? And, finally, what are the misdeeds? Improving shareholder returns, which likely will flow through to the millions of Americans of all stripes who have investments in these companies through their 401(k)'s?
1
Pfizer is playing the game of global corporate business according to the rules as they exist. If they are to be expected to play otherwise (and survive) then the umpires (meaning major world governments) have to unite to change the rules of the game. The US cannot rewrite those rules alone. Angry diatribes accusing the management of Pfizer (or other global competitors) of being dastardly villains will not accomplish much either. Like the flying tackle in football, if the game is to be made more gentlemanly, then the umpires have to change it.
2
What I am suggesting for companies that feel their bread should be buttered on both side: Inversion tactics, soon to be adopted by Pfizer, should result in the stripping of the protections afforded to good corporate citizens. Since I have no illusion that our elected congress would ever do that... NY state should find a way to tax Pfizer as punishment.
1
President Obama has come out against this practice of inversion but of course, Congress in it current make up of GOP control will do nothing to correct this. Meanwhile, the drug prices here in the US are much higher than oversees- so the American public is getting hammered twice- by the highest drug prices in the world and then not being able to tax the revenue. Of course, Medicare is not able to negotiate drug prices due to Bush Jr.- so until Congress acts on both the ability to negotiate drug prices and the overall inversion issue- the American public will continue to subsidize the cost of drugs across the globe. Shame on Congress- but what else is new?
56
Amazing how the article fails to mention that the reason for inversions is because the US has one of the highest corporate tax rates in the world. You make it sound like these corporations have some 'moral' obligation to you. They do not. It is the constant tax hikes by the spend-spend-spend Democrats that have created this issue over the decades. Now its time to pay the piper and this is the response. Blame everyone else other than who caused the problem.
4
This is a pretty silly debate. A country (the US in this case) has a tax code. Corporations (or people) pay their taxes following the 70+ thousand pages of tax code. If the entity finds a better deal elsewhere in the world, then they are free to move and pay their taxes to a different regime.
The problem really is that the US now wants to prevent that free movement of capital (and jobs and the tax revenue).
Sounds like the Feds will next build a US version of the Berlin Wall.
Most amazing though is how that approach (forcing a society to be captive to that government) has NEVER, EVER worked in the history of mankind.
The problem really is that the US now wants to prevent that free movement of capital (and jobs and the tax revenue).
Sounds like the Feds will next build a US version of the Berlin Wall.
Most amazing though is how that approach (forcing a society to be captive to that government) has NEVER, EVER worked in the history of mankind.
5
It's time we recognized Corporations aren't people but profit-making legal entities that are expected to obey the Law but have no other responsibility. They have no conscience, no moral obligations, no duty to do the right thing. That's strictly the domaine of "real" people. When Corporations do take the high road and do something "nice" that no Law forces them to do, it is because the goodwill it will generate is good for the bottom line.
And that's fine, as long as our Laws and regulations are written and enforced with all that in mind, which isn't the case. Our legislators are on the take, and as long as we keep voting for that kind of candidates instead of the Bernie Sanders of this world, nothing will change.
And that's fine, as long as our Laws and regulations are written and enforced with all that in mind, which isn't the case. Our legislators are on the take, and as long as we keep voting for that kind of candidates instead of the Bernie Sanders of this world, nothing will change.
6
This practice, apparently approved by the US Congress [read here "lobbyists for Big Pharma] is as much a threat to national security as is any attack from ISIS. Yet it does its evil work apparently out of the eyes of the American public, who are asked to bear the [unbearable] tax load that shifts to them when these scofflaw corporations find ways to not pay taxes at all, or so minimal that it is meaningless.
I don't know if anyone remembers the ancient fable of the man who killed the golden goose anymore, but this is one such manifestation of that principle right in front of our eyes. This massive avoidance of taxes will result in something like that described in Revelation 18.
I don't know if anyone remembers the ancient fable of the man who killed the golden goose anymore, but this is one such manifestation of that principle right in front of our eyes. This massive avoidance of taxes will result in something like that described in Revelation 18.
42
"What's 'Free Enterprise' daddy?" In the old days it was believed that competition kept prices low and improved products. Capitalism realized this was wasteful and duplicitous, and, worst of all, kept profits down. Once there were laws and regulations to prevent monopolies and insure free enterprise and competition but in the name of efficiency and greed these regulations were whittled away. In the new world there will be one car company, one television network, one hospital corporation, one bank and a single drug company. Simple.
5
I think congress should stop inversions, but the real issue seems to be the earnings stripping which is used by a lot of multinational corporations even those head-quartered in the US. We need to have rules ensuring that technologies, trade secrets, etc. developed in the US are attributed to the US branch and taxed accordingly. None of this, "our division in Ireland which employs 3 people owns the rights to all our (drugs, software, patents, etc.)". As far as not being competitive in the US because of the tax rates that is pure nonsense. You pay taxes on profits they don't effect the cost of your product one bit (how much you want to bet prices don't come down if the merger goes through). What they are really after is increasing the value of their stock options by increasing their after tax profit at our expense.
47
2.) Corporate Crime has gone over the top and beyond in America and around the world. Now is the time for the grassroots revolution Senator Bernie Sanders is talking about. WE can force Congress to represent us by flooding them with demands to pass bills that WE want to see enacted. Here is the information on an Inversions Bill that is hung up in both the U.S. House Ways and Means Committee and Senate Finance Committee with phone numbers for those committees. Orrin Hatch is the chair of the finance committee and their phone number is (202)-224-4515. Kevin Brady is the chair of the U.S. House Ways and Means Committee and their phone number is (202) 225-3625. Please call the committees and demand that these bills be passed for approval and call your congressional representatives and tell them to pass a serious inversion bill NOW. Start some tweets and tag this article with committee contact information. Speak Up, Good People of America!
https://www.congress.gov/bill/114th-congress/senate-bill/198/related-bills
http://www.finance.senate.gov/contact/
http://www.house.gov/committees/
http://www.senate.gov/general/resources/pdf/senators_phone_list.pdf
http://clerk.house.gov/member_info/mcapdir.aspx
https://www.congress.gov/bill/114th-congress/senate-bill/198/related-bills
http://www.finance.senate.gov/contact/
http://www.house.gov/committees/
http://www.senate.gov/general/resources/pdf/senators_phone_list.pdf
http://clerk.house.gov/member_info/mcapdir.aspx
1
Facts are that our tax system rewards companies for this. Its not tax dodging. Its public company fiduciaries avoiding USA's uniquely (no other free economy) punitive tax structure. Lower the rate, remove loopholes such that together, they are revenue neutral. Then foreign profits will seek the highest risk-adjusted, after-tax locale. The US wins big. Any politician will tell you the fix is EASY but he politics of handing the other side a "win" are hard. Gutless.
3
I am waiting to hear the outrage from the mainstream media. CBS News which appears to live on pharmaceutical advertising that offers information inviting both life and death reported this item with tongue in both cheeks.
1
Since they are no longer an American company, Medicare should be negotiating with them on prices before purchasing their products.
4
Why doesn't the US lower its tax rate (highest of industrial countries in the world)? Nah, we don't want our companies to prosper, we want to punish them.
3
Ah, the NY Times comes out swinging! Tax breaks to the makers of Botox. Couldn't be any of the other life changing or live saving drugs made by the combined organizations. If the activity is legal, then the companies would be negligent to their shareholders to NOT take advantage of the legal tax break. Because the president is unwilling to sit down with Congress and actually compromise - not just get what he wants - then these types of transactions will continue to occur. As a member of the public, I don't feel particularly short changed - I'm sure the money will be put to much better use than our government using it to continue it's bloated and inefficient management of its affairs.
The end to the disaster that is the Obama administration is in sight. The question is how much more damage can he do. On the bright side, it seems that Hillary is the worst case scenario - not ideal by any means, but certainly better than what we've been living with for the past seven years. How long will it take the country to recover from this disaster?
The end to the disaster that is the Obama administration is in sight. The question is how much more damage can he do. On the bright side, it seems that Hillary is the worst case scenario - not ideal by any means, but certainly better than what we've been living with for the past seven years. How long will it take the country to recover from this disaster?
You can't write regulations to force people (or corporations) to stay put. Plenty of people on this comment board consider their tax situation when making decisions - live in a high-tax school district now, maybe when your kids are out of school you'll more to a lower-tax school district; are you stealing from the higher-tax district? When you retire and consider Florida's lack of a state income tax; are you stealing from your current state?
In a global market place, the U.S. needs a globally competitive tax structure.
My proposed solution: tax the corporations at a lower rate that is globally competitive (say 10%); tax individuals dividends and capital gains are income tax levels - which is where the earnings of Pfizer are going to go anyway!
Problem solved. More jobs in the U.S. are companies move here, no more inversions, likely a net positive impact to federal tax revenues.
In a global market place, the U.S. needs a globally competitive tax structure.
My proposed solution: tax the corporations at a lower rate that is globally competitive (say 10%); tax individuals dividends and capital gains are income tax levels - which is where the earnings of Pfizer are going to go anyway!
Problem solved. More jobs in the U.S. are companies move here, no more inversions, likely a net positive impact to federal tax revenues.
5
The liberal line is that corporate taxes should stay at 35% because no corporation pays them anyway. because they can use tax strategies.
Then they complain that corporations use tax strategies. And refuse to lower the tax rate on the taxes that no one supposedly pays.
Then they complain that corporations use tax strategies. And refuse to lower the tax rate on the taxes that no one supposedly pays.
2
The tax law could be changed, but no one will change it....instead, we are still trying to push through an Obamacare repeal, and a Planned Parenthood defunding, and other mostly religious based items......a complete disconnect from reality!
No wonder everything is a mess.......
Please help!
No wonder everything is a mess.......
Please help!
3
And this will also effect state corporate tax revenues. If taxable corporate profits are significantly lowered at the federal level there will be a corresponding loowering of taxable profits at the state level.
If congress refuses to fix this, maybe we have to do it at a lower political level.
Every town/city/state could agree to level 'fees' for services provided by states and municipalities to inverted corporations, based on taxes lost. Roads, police, fire, snowplowing, etc, etc.
If congress refuses to fix this, maybe we have to do it at a lower political level.
Every town/city/state could agree to level 'fees' for services provided by states and municipalities to inverted corporations, based on taxes lost. Roads, police, fire, snowplowing, etc, etc.
2
Awake an arise America!
We have only one candidate that has promised to stop this give away.
Senator Sanders of Vermont!
All the rest are in the pockets of the wealthy and Corporate.
We have a chance, here and now America.
Get! Out! and Vote!
Go Bernie!
We have only one candidate that has promised to stop this give away.
Senator Sanders of Vermont!
All the rest are in the pockets of the wealthy and Corporate.
We have a chance, here and now America.
Get! Out! and Vote!
Go Bernie!
4
Do their lobbyists have to register as foreign agents?
No more "federal support".
No more research subsidies.
Get them off the stock exchange.
No more write-offs.
It was bad enough when corporations chased the 'lower cost' scams from state to state, say, a corporation in Oregon that gets the offer of a lower tax bill in Texas (say, 'free' for ten years, with all infrastructure paid by Texas). Legal? Of course it was all legal - the corporations had already lobbied to get the law changes made that they would not be beholden to pensions on those left behind. I've watched that game for the last 30 years, dumping workers in one state and moving to another to offer the new workers lower wages and no unions.
This is the same game: Get lower taxes elsewhere.
In this case the new country is Ireland. I am totally not surprised on that. Ireland was the first EPZ back in the mid-fifties. They had a special little corporate haven that made shoes that could under sell any shoe produced in the US. By the 1970's the shoe factories in New England and especially Maine, were done for, an entire segment of the state's economies gone and never coming back.
Since then almost 50,000 factories have closed in the US. Six million jobs have gone 'overseas', outsourced. They are never coming back. The spine of this nation has been crushed.
Now the corps have found a new means to forgo obligations, tuck yourselves under the wing of a foreign corp.
Vultures. Corporate vultures.
Happy Turkeyday, US.
No more "federal support".
No more research subsidies.
Get them off the stock exchange.
No more write-offs.
It was bad enough when corporations chased the 'lower cost' scams from state to state, say, a corporation in Oregon that gets the offer of a lower tax bill in Texas (say, 'free' for ten years, with all infrastructure paid by Texas). Legal? Of course it was all legal - the corporations had already lobbied to get the law changes made that they would not be beholden to pensions on those left behind. I've watched that game for the last 30 years, dumping workers in one state and moving to another to offer the new workers lower wages and no unions.
This is the same game: Get lower taxes elsewhere.
In this case the new country is Ireland. I am totally not surprised on that. Ireland was the first EPZ back in the mid-fifties. They had a special little corporate haven that made shoes that could under sell any shoe produced in the US. By the 1970's the shoe factories in New England and especially Maine, were done for, an entire segment of the state's economies gone and never coming back.
Since then almost 50,000 factories have closed in the US. Six million jobs have gone 'overseas', outsourced. They are never coming back. The spine of this nation has been crushed.
Now the corps have found a new means to forgo obligations, tuck yourselves under the wing of a foreign corp.
Vultures. Corporate vultures.
Happy Turkeyday, US.
3
Maybe as a start on getting prescription drug prices under control and in response to this and other tax avoidance strategies the US could start "negotiating" (read setting) price caps on drugs manufactured by non-US firms.
2
OUTRAGEOUS! These corporate greedsters are stealing from every single one of us who pay taxes and OUR children, grandchildren, grandparents to stuff their pockets while they peddle their multi-billion-dollar snake oil to OUR government agencies and use OUR hard-earned taxpayer dollars to fund it. They have no social conscience. WE must DEMAND that they be cut off from any of OUR hard-earned taxpayer-funded government contracts, that their patents be pulled and that their employees are cut off from ALL government-funded services like education, health care, fire and police protection, utilities, use of roads, use of publicly-funded sports stadiums, use of mass transportation including airports and airplanes, etc. WE must also DEMAND that, since they are an Irish company, they may not sell their snake oil in the United States under any name or subsidiary. Please see my next post on ways to contact the committees and tell them to STOP CORPORATE THEFT IN AMERICA NOW!
2
It is unfortunate that the once famous motto"what good for GM is good for America" has become altered by corporate America to be " Whats good for ( insert name here) is good for ( name here) and *#**! America"
Pfizer founded by IMMIGRANTS in the late 1880's has become wildly successful , due to its smart business practices, its innovations and one might argue existing in a safe environment, Safe from the type of troubles that companies have faced throughout the world between 1849 when the company was founded and today when the company has fled our shores. The safety , was safety from governments that confiscated businesses, from workers being fearful of traveling to work ( not to be kidnapped for ransom for example , or killed for being successful) , on safe roads and bridges, for a country that lived in relative safety from invasion for over 100 years. Is there no obligation to remain and support the country that allowed them to thrive?
What can be more unpatriotic than abandoning ones country? Republicans like to wear their patriotism on their sleeves, crying we live in a time of war! ( from terror , isis etc) and yet when it comes to the army of capitalism they capitulate, The only response, reduce taxes! My response , No tax them more for leaving!
They and their workers will still want the safety, the benefits of our shores, they will not be asking Ireland ( their new home ) to provide the benefits that they now will be 'stealing' from the citizens of America.
Pfizer founded by IMMIGRANTS in the late 1880's has become wildly successful , due to its smart business practices, its innovations and one might argue existing in a safe environment, Safe from the type of troubles that companies have faced throughout the world between 1849 when the company was founded and today when the company has fled our shores. The safety , was safety from governments that confiscated businesses, from workers being fearful of traveling to work ( not to be kidnapped for ransom for example , or killed for being successful) , on safe roads and bridges, for a country that lived in relative safety from invasion for over 100 years. Is there no obligation to remain and support the country that allowed them to thrive?
What can be more unpatriotic than abandoning ones country? Republicans like to wear their patriotism on their sleeves, crying we live in a time of war! ( from terror , isis etc) and yet when it comes to the army of capitalism they capitulate, The only response, reduce taxes! My response , No tax them more for leaving!
They and their workers will still want the safety, the benefits of our shores, they will not be asking Ireland ( their new home ) to provide the benefits that they now will be 'stealing' from the citizens of America.
1
Consider business tax reform that replaces payroll taxes with a 4% VAT and replaces tax expenditures (credits, deductions, special rates, deferrals and exemptions) with a low 8% C corporation income tax rate. In the big picture:
- It rewards job creation in the U.S.
- Global U.S. businesses avoid the VAT on foreign sales so exports are encouraged
- The low worldwide 8% C corporation tax encourages repatriation of foreign profits
- Inversions are discouraged
Complementary individual and pass-through business tax reform could be even more exciting with a choose-your-own income tax rate between 8% and 28%. Each rate would be pared with a decreasing net wealth tax rate ranging from 2% down to zero for the top 28% income rate. So for example a taxpayer could elect an 18% income tax rate and 1% wealth tax rate. To encourage middle class success, each taxpayer would be able to save up to $500,000 (for retirement, education or health care) exempt of wealth taxes. Wealth taxes paid would offset estate (and gift taxes set at a flat 28%) so few would actually owe anything. The charitable deduction would be permitted only with charities that agree to provide some transitional jobs (at a little below private sector rates) for the unemployed. In the big picture:
- the loss of family wealth for 90% of the population would be reversed
- all negative tax distortions would be eliminated
- government assistance programs would be allowed and targeted based on both wealth and income guidelines
- It rewards job creation in the U.S.
- Global U.S. businesses avoid the VAT on foreign sales so exports are encouraged
- The low worldwide 8% C corporation tax encourages repatriation of foreign profits
- Inversions are discouraged
Complementary individual and pass-through business tax reform could be even more exciting with a choose-your-own income tax rate between 8% and 28%. Each rate would be pared with a decreasing net wealth tax rate ranging from 2% down to zero for the top 28% income rate. So for example a taxpayer could elect an 18% income tax rate and 1% wealth tax rate. To encourage middle class success, each taxpayer would be able to save up to $500,000 (for retirement, education or health care) exempt of wealth taxes. Wealth taxes paid would offset estate (and gift taxes set at a flat 28%) so few would actually owe anything. The charitable deduction would be permitted only with charities that agree to provide some transitional jobs (at a little below private sector rates) for the unemployed. In the big picture:
- the loss of family wealth for 90% of the population would be reversed
- all negative tax distortions would be eliminated
- government assistance programs would be allowed and targeted based on both wealth and income guidelines
1
So if you take Eliquis, Dilantin, Premarin, Botox, etc vote for Bernie and a Congress that will outlaw inversion and reverse Citizens United thru legislation.
Reverse CU and deny ALL unions from donating to candidates as well. Across the board reform. Do it for one then do it for everyone.
The whole concept of corporations as "citizens" is bogus. Human citizens are expected to be patriotic. Corporate "citizens" are expected to make profits. There is a whole bogus ideology which asserts that profits reflect social responsibility because they show a corporation is satisfying consumer demand with a quality product reasonably priced. The discipline of competition guarantees all of this. Then corporate execs, their lawyers, their accountants set about to subvert the "discipline" of markets. What if corporations, especially pharmaceutical companies, were denied access to the American market by practicing inversion and by seeking other phony loopholes? Open the US market to Canadian pharmaceutical companies. Allow Medicare to purchase on behalf of all is members. Americans are brainwashed to have a visceral negative reaction to the word socialism without having a clue what it is. No one is calling for the nationalization of corporations. Some of us are asking for a modicum of reality to be restored to the doctrines of free, competitive markets and a modicum of social responsibility be practiced by entities calling themselves ""citizens".
The problem isn't companies avoiding taxation - the problem is the lack of competition in the medical industry that is part and parcel of Obamacare. Taxes should be low and relatively flat for everyone, but Obamacare destroyed what little competition existed among pharmaceutical companies - so bigger is now better in this land of ever more socialized healthcare.
Take a deep breath . . .
1. Remember that $20 billion over 10 years in federal taxes isn't even a rounding error on the budget. This is not actually a real issue.
2. Management has a duty to shareholders to reduce the tax bill of the corporation so more of the return stays with shareholders. Inversions are not a diabolical scheme but simply good management. If you don't like it, blame Congress.
3. While the tax savings do disproportionately benefit larger shareholders and rich people more than others, remember that Pfizer is a public company so anyone with a mutual fund and a 401(k) also benefits from more cash staying with the company not out the door in taxes.
4. Amused at the notion that inverted companies "remain listed on United States-based stock exchanges, where they raise capital under the protection of American securities’ laws." Securities laws are a BURDEN for companies - they are designed to protect INVESTORS. Oops! Before you get your underwear all in a bunch about companies taking advantage of U.S. infrastructure but not paying taxes for it, remember that U.S. companies also use foreign infrastructure - it's a two way street.
Try to keep in mind that all tax policy is at the whim of Congress. Corporations are just playing the tax game - we all play it. Did you take any deductions on your taxes last year? Think there was really no one in America more deserving than you of that cash? Calm down. Inversions are not a thing.
1. Remember that $20 billion over 10 years in federal taxes isn't even a rounding error on the budget. This is not actually a real issue.
2. Management has a duty to shareholders to reduce the tax bill of the corporation so more of the return stays with shareholders. Inversions are not a diabolical scheme but simply good management. If you don't like it, blame Congress.
3. While the tax savings do disproportionately benefit larger shareholders and rich people more than others, remember that Pfizer is a public company so anyone with a mutual fund and a 401(k) also benefits from more cash staying with the company not out the door in taxes.
4. Amused at the notion that inverted companies "remain listed on United States-based stock exchanges, where they raise capital under the protection of American securities’ laws." Securities laws are a BURDEN for companies - they are designed to protect INVESTORS. Oops! Before you get your underwear all in a bunch about companies taking advantage of U.S. infrastructure but not paying taxes for it, remember that U.S. companies also use foreign infrastructure - it's a two way street.
Try to keep in mind that all tax policy is at the whim of Congress. Corporations are just playing the tax game - we all play it. Did you take any deductions on your taxes last year? Think there was really no one in America more deserving than you of that cash? Calm down. Inversions are not a thing.
3
While they may not be a big thing to you or the behemoth, they are to me.
Yes I can take advantage of tax deductions, that is, the few that remain. But each time some congressperson or corporation claims taxes are burdening them, the individual tends to shoulder the cost, not the corporation.
The individual person doesn't have a flanx of lawyers or accountants at their disposal, nor can they just uproot, marry (ah, excuse me, merge) some foreign acquaintance and set up two households with the ability to claim one as their primary residence yet live in the other full time.
And the individual can't claim poverty and unable to pay their taxes, die, come back to life under another name as do corporations.
And yes, I try to be careful what responsible companies I place my money in but since they tend to have more babies (aka subsidiaries) than the universe has stars, it becomes rather a gargantuan task.
Apparently inversions are legal but they don't have to stay that way. In my book, it only serves those that can afford to do so another opportunity to stiff the individual taxpayer and move more of the burden to them.
Since when that could be a good thing is beyond me.
Yes I can take advantage of tax deductions, that is, the few that remain. But each time some congressperson or corporation claims taxes are burdening them, the individual tends to shoulder the cost, not the corporation.
The individual person doesn't have a flanx of lawyers or accountants at their disposal, nor can they just uproot, marry (ah, excuse me, merge) some foreign acquaintance and set up two households with the ability to claim one as their primary residence yet live in the other full time.
And the individual can't claim poverty and unable to pay their taxes, die, come back to life under another name as do corporations.
And yes, I try to be careful what responsible companies I place my money in but since they tend to have more babies (aka subsidiaries) than the universe has stars, it becomes rather a gargantuan task.
Apparently inversions are legal but they don't have to stay that way. In my book, it only serves those that can afford to do so another opportunity to stiff the individual taxpayer and move more of the burden to them.
Since when that could be a good thing is beyond me.
Capital will go where the tax imposed on it is most cost efficient. Anytime you want less of something tax it into oblivion. If you want more Companies and more Capital coming to the US, make the cost of it less. Less tax, less regulation, less burden, less cost of distributing to stockholders, owners and employees. Simple? Yes. Do democrats get it ? NO.
2
A large portion of pharma research is funded directly by the US government.
Pharma firms do some pharma research and most of the development.
In this light, this sort of move is particularly egregious.
Americans have put up with (suffered) paying for high-priced drugs to subsidize the rest of the world's pharma R&D. In addition to the large portion of pharma research directly paid by our taxes.
It is time for serious management changes.
Pharma firms do some pharma research and most of the development.
In this light, this sort of move is particularly egregious.
Americans have put up with (suffered) paying for high-priced drugs to subsidize the rest of the world's pharma R&D. In addition to the large portion of pharma research directly paid by our taxes.
It is time for serious management changes.
4
Solving this problem is very easy. Require a company's CEO and other top five senior executives to be physically resident for a majority of each year in the jurisdiction of the company's tax headquarters.
What CEO could seriously dispute that he or she should be spending most of his or her time at the company headquarters?
However, you can bet that CEOs will lose their desire to do inversions very quickly if doing so means that they will have to uproot their families and actually live abroad.
There is already ample precedent for this type of structure. Currently, if an individual is physically resident a majority of each year in New York City (>180 days), he or she pays NYC income tax. The same regulations regarding residency could be used here.
What CEO could seriously dispute that he or she should be spending most of his or her time at the company headquarters?
However, you can bet that CEOs will lose their desire to do inversions very quickly if doing so means that they will have to uproot their families and actually live abroad.
There is already ample precedent for this type of structure. Currently, if an individual is physically resident a majority of each year in New York City (>180 days), he or she pays NYC income tax. The same regulations regarding residency could be used here.
43
Every single American company that does this should be barred from doing business in this country. Plain and simple. Where is the outrage. Where is our Congress? Absolutely disgusting and shameful that it is allowed to happen.
5
I do not blame Pfizer or any company for saving as much as they can. Pfizer is a business responsible to its shareholders. The injustice is our government spending money like there is no end and taxing more and more. If our government would run itself like a business and learn how to manage taxpayers money there would be no need for this demonizing business for what businesses do and that is make as much money for there shareholders as they can. I am sure the majority of the people in this country buy a product as cheaply as they can and they same for business they go where they can do business as cheaply as they can.
3
Saving is one thing but moving their 100sq' office to another country and then claiming tax savings is another.
We all want good infrastructure; a well respected and intelligent military; competent and intelligent leaders; an educated workforce; and the best emergency workers, and equipment money can buy but balk at the expense for paying it.
We all hear that a private business or outsourcing is so favorable but when it happens, thousands get laid off, wages drop and the labor moves offshore.
What's left is low paying jobs with no benefits, no allegiance and no future.
So forgive if I seem cynical but the money does not trickle down. It never has and it never will. The CEO's earn more money than they ever did and they still get golden parachutes even when they do a horrible job. In fact, many make more money when fired than they would have had they stayed.
The last time I noticed, when an employee is laid off, they are lucky they leave with that week's pay, let alone severance.
We all want good infrastructure; a well respected and intelligent military; competent and intelligent leaders; an educated workforce; and the best emergency workers, and equipment money can buy but balk at the expense for paying it.
We all hear that a private business or outsourcing is so favorable but when it happens, thousands get laid off, wages drop and the labor moves offshore.
What's left is low paying jobs with no benefits, no allegiance and no future.
So forgive if I seem cynical but the money does not trickle down. It never has and it never will. The CEO's earn more money than they ever did and they still get golden parachutes even when they do a horrible job. In fact, many make more money when fired than they would have had they stayed.
The last time I noticed, when an employee is laid off, they are lucky they leave with that week's pay, let alone severance.
Good start. As noted, Pfizer and many others could not exist or operate without the USA governmental infrastructure including copyright laws, NSA and military protection, diplomatic corps, research grants, educated workforce, physical infrastructure etc. all of which cost the US taxpayers over 60% of its budget plus it's growing deficit. There were many ways to bill them for services rendered.
Federal and state governments are increasingly charging everyone for government services including business operating licenses, hunting licenses, passports, etc. Global companies if unwilling to pay tax in consideration of the protection they receive from the United States government should be billed a substantial service fee or other mechanisms. Minimally our US citizens would benefit from report defining the revenue lost and how it is adding to our debt and limiting our much-needed funding to rebuild our international competitive position. The numbers actually are easy to find, each corporation has already worked with them in detail.
Change will take time. This malaise does not have to do with our elected officials “inability” to act but there blind debt and allegiance. With candidates happily lining up for billions in campaign funds from dark sources, I like to hear a more comprehensive recommendation for change with a timetable.
Federal and state governments are increasingly charging everyone for government services including business operating licenses, hunting licenses, passports, etc. Global companies if unwilling to pay tax in consideration of the protection they receive from the United States government should be billed a substantial service fee or other mechanisms. Minimally our US citizens would benefit from report defining the revenue lost and how it is adding to our debt and limiting our much-needed funding to rebuild our international competitive position. The numbers actually are easy to find, each corporation has already worked with them in detail.
Change will take time. This malaise does not have to do with our elected officials “inability” to act but there blind debt and allegiance. With candidates happily lining up for billions in campaign funds from dark sources, I like to hear a more comprehensive recommendation for change with a timetable.
5
"This merger is a tax-dodging maneuver that enriches shareholders and executives while shortchanging the public and robbing the Treasury of money that would pay for a host of government programs". Utter lunacy. The only mission of a public company is to maximize profits for the benefit of its owners, not to line the pockets of government. Global tax rates are lower than US tax rates - that is all you have to know about this issue. It is the same reason that companies move from NY to NC - lower income taxes, lower real estate taxes. It is why people move to Florida and Texas, to avoid state income taxes and estate taxes.
18
I think if a corporation actually moves its not an issue, at least for me, the issue is when when you sign a few sheets of paper and save most or all of your taxes, because there is always going to be someone willing to allow that for less. For instance Ireland provides almost nothing to the company, but gets at least 5% of it's profit. There is nothing stopping another country from doing that for 4%, 1%, or even .1%. I think the real issue is the earnings stripping which the article just mentions, which allows the to shift profits from where they were clearly made to a lower tax jurisdiction.
3
The lunacy here is that a corporation is seen as a public entity, when in fact it is a quasi, competing government. "The government" here, as you refer to it, is the only public entity, its representatives elected by thee and me. It's your and my pockets that are being emptied with inversion.
1
Wrong - Companies and people both move to lower tax states for real. This is a bogus maneuver - Pfizer isn't "really" relocating - only for tax reasons.
1
"Tax claims don't hold up." Says who? This editorial board should read the lead article on Inversion in today's NYT! Allergan pays a 5% tax rate. Pfizer pays 23%.
When I take advantage of a tax break it is tax dodge. When you take advantage of one it is a well deserved deduction.
All of this talk about inversion being the problem fails to acknowledge one fact. If your tax rate is 5% and mine is 23%, You have a 18% price or profit advantage. All other things being equal, there is no question who will win long term!
Many foreing nompanies pay no tax on exports, they are exempt. We tax all exports. if the US company sets up prodection off shore, they pay US tax if and when they bring the money back to the US.
You want to tax US foreign subsidiaries of US companies on foreing earnings? How many airplaines do you think Boeing would sell against Airbus in markets throughout the world it then didn't oursource and weren't able to bid using foreing tax rates.?
If our government wants US companies to continue to be the leaders in the world, they will make US corporate tax rates comparable to foreign competitor company tax rates. There will then be no need for inversion to obtain a lower tax rate.
When I take advantage of a tax break it is tax dodge. When you take advantage of one it is a well deserved deduction.
All of this talk about inversion being the problem fails to acknowledge one fact. If your tax rate is 5% and mine is 23%, You have a 18% price or profit advantage. All other things being equal, there is no question who will win long term!
Many foreing nompanies pay no tax on exports, they are exempt. We tax all exports. if the US company sets up prodection off shore, they pay US tax if and when they bring the money back to the US.
You want to tax US foreign subsidiaries of US companies on foreing earnings? How many airplaines do you think Boeing would sell against Airbus in markets throughout the world it then didn't oursource and weren't able to bid using foreing tax rates.?
If our government wants US companies to continue to be the leaders in the world, they will make US corporate tax rates comparable to foreign competitor company tax rates. There will then be no need for inversion to obtain a lower tax rate.
1
Just remember these companies aren't struggling to stay profitable. Any tax they don't pay,the American public will.
Not sure what the answer to this is. It's not prohibiting inversions, because that would discourage corporations from employing people here. There are plenty of talented people and great facilities outside of the US.
1
Vote Bernie! (Now you know the reasons why!)
32
Unfortunately, it will take more imagination than the average American voter demonstrates to mobilize behind Bernie. It will take the ability to see beyond his counter-cultural rhetoric that strays beyond the parameters of Democratic party political correctness and so takes average voters outside their comfort zone. Better to have Hillary who has risen to the top via Wall Street.
The USA has a federal tax code that is 72,000 pages long.
The average working American's taxation is derived from a few pages of that code related to wages.
The rest of the code - most of those 72,000 pages - is written by and for the richest Americans - real and corporate 'persons' - as a form of legal theft covering subjects such as business 'structure', 'passive' income, capital gains, transfer pricing, economic legerdemain and technical but mendacious vernacular purposely designed to induce sleep, boredom and inattention.
Corporate inversion is part of a giant annual Christmas gift tax cut buffet for the richest Americans as their reward for another year well-pilfered from the United States Treasury and GDP.
Tax rates for large American corporations are not particularly high in spite of corporate protests because exemptions and deductions reduce effective tax rates on a massive scale.
The diabolical genius of tax welfare for the rich and the corporate is that their welfare handouts are hidden in 72,000 pages of tax code Greek.
So while the rich, corporate right-wing trashes the welfare of food stamps, unemployment insurance, housing subsidies, Social Security, Medicare, and the minimum wage, they have built a giant impenetrable wall of tax cut welfare for the rich in our 72,000-page IRS code ironically crying 'poverty' as they rake in increasing millions and billions.
Wage theft and tax cut theft are the great modern innovations of America's rapacious gilded class.
The average working American's taxation is derived from a few pages of that code related to wages.
The rest of the code - most of those 72,000 pages - is written by and for the richest Americans - real and corporate 'persons' - as a form of legal theft covering subjects such as business 'structure', 'passive' income, capital gains, transfer pricing, economic legerdemain and technical but mendacious vernacular purposely designed to induce sleep, boredom and inattention.
Corporate inversion is part of a giant annual Christmas gift tax cut buffet for the richest Americans as their reward for another year well-pilfered from the United States Treasury and GDP.
Tax rates for large American corporations are not particularly high in spite of corporate protests because exemptions and deductions reduce effective tax rates on a massive scale.
The diabolical genius of tax welfare for the rich and the corporate is that their welfare handouts are hidden in 72,000 pages of tax code Greek.
So while the rich, corporate right-wing trashes the welfare of food stamps, unemployment insurance, housing subsidies, Social Security, Medicare, and the minimum wage, they have built a giant impenetrable wall of tax cut welfare for the rich in our 72,000-page IRS code ironically crying 'poverty' as they rake in increasing millions and billions.
Wage theft and tax cut theft are the great modern innovations of America's rapacious gilded class.
404
Not so fast.
The other 99% of America continuously votes in the same politicians who make the rules we live by. Blame the "rich" all you want, but how about voting for candidates who will correct whatever you feel is wrong? Seems like there is no responsibility left in your world - simple "blame the rich" and you all feel better.
And you're saying that this somehow lucrative environment is SO good, that the rick are now "rich" leaving America? If it so, so good (as you say) then why are they leaving?
And your solution is to force them to stay? Sounds like you want a return to slavery?
The other 99% of America continuously votes in the same politicians who make the rules we live by. Blame the "rich" all you want, but how about voting for candidates who will correct whatever you feel is wrong? Seems like there is no responsibility left in your world - simple "blame the rich" and you all feel better.
And you're saying that this somehow lucrative environment is SO good, that the rick are now "rich" leaving America? If it so, so good (as you say) then why are they leaving?
And your solution is to force them to stay? Sounds like you want a return to slavery?
1
Maybe you should support a simple flat tax with no deduction for both companies and people. It could be structured to collect the same total amount of revenue and the only real losers would be accountants, lawyers, and lobbyists.
1
Oh, you put the 'downtown' back Socrates,
now I'll have a happier Thanksgiving.
now I'll have a happier Thanksgiving.
2
It is one of the most confounding aspects of Liberalism--that it's adherents feel entitled to the income earned by its individuals and corporations--and as much of it as they feel they need. Of course the need is always large--and ever growing, as any Liberal worth his or her salt can easily outspend any revenue stream in order to "take care of the poor". And of course...the definition of "poor" is always being ratcheted up--to include even middle class voters.
Equally disturbing, not just that Progressives want taxes to be ever higher--but would rather vomit in their own mouths than give a percentage--just that it needs to be high--very high--and once raised, higher still.
When France's Hollande (in a rare moment of honesty) argued for a 75% income tax rate on "The Wealthy", he cared not a whit that, combined with other taxes the French pay, the burden for some wealthy individuals was above 100%. At that point, taxation becomes intentionally punitive--with Liberals the world over standing and cheering the idea--even as wealthy Frenchmen headed for the exit.
I cheer Pfizer's move. I encourage more American companies to make the same move. Liberals need to understand...just as companies can move across state lines to avoid high taxes and ruinous regulatory environments, so too should corporations be allowed to leave the country--until Liberals realize, in a competitive global environment, having the highest tax rate in the industrial world is a losing policy.
Equally disturbing, not just that Progressives want taxes to be ever higher--but would rather vomit in their own mouths than give a percentage--just that it needs to be high--very high--and once raised, higher still.
When France's Hollande (in a rare moment of honesty) argued for a 75% income tax rate on "The Wealthy", he cared not a whit that, combined with other taxes the French pay, the burden for some wealthy individuals was above 100%. At that point, taxation becomes intentionally punitive--with Liberals the world over standing and cheering the idea--even as wealthy Frenchmen headed for the exit.
I cheer Pfizer's move. I encourage more American companies to make the same move. Liberals need to understand...just as companies can move across state lines to avoid high taxes and ruinous regulatory environments, so too should corporations be allowed to leave the country--until Liberals realize, in a competitive global environment, having the highest tax rate in the industrial world is a losing policy.
46
I will never understand the aversion to a progressive taxation system that some who mistakenly call themselves conservative obsess over.
For what is truly conservative about a society where the very few prosper and the majority suffer?
What is conservative about not collecting enough funds to provide for the general welfare of society? And by general welfare I am not talking solely about social safety net programs. What about defense, infrastructure, education, environmental concerns?
There is nothing conservative about running massive fiscal deficits.
Taxes are the price we pay for civilization.
For what is truly conservative about a society where the very few prosper and the majority suffer?
What is conservative about not collecting enough funds to provide for the general welfare of society? And by general welfare I am not talking solely about social safety net programs. What about defense, infrastructure, education, environmental concerns?
There is nothing conservative about running massive fiscal deficits.
Taxes are the price we pay for civilization.
10
The problem with this thinking is that these corporations who are so burdened by "unfair" taxation do not want to leave the country. They stay and reap the benefits of living here while collecting grants and avoiding taxes. If they really want to go to another country then they should pack up and move.
60
Jesse,
Did you not read the part about all the great things Pfizer gets that are paid for with the tax base? Patent protections, NIH funding and functioning capital markets to mention a few. These are things that cost money yet Pfizer values them enough to not actually leave the country. They need to help pay for our regulated capitalism if they are going to reap the advantages of it.
Did you not read the part about all the great things Pfizer gets that are paid for with the tax base? Patent protections, NIH funding and functioning capital markets to mention a few. These are things that cost money yet Pfizer values them enough to not actually leave the country. They need to help pay for our regulated capitalism if they are going to reap the advantages of it.
3
Goodbye Pfizer and Allergan--sell your products in Ireland, but not this country. Why is this allowed? Why hasn't legislation been passed to stop it?
Why are we taxpayers subsidizing Pfizer's/Allergan's multimillion dollar executives and shareholders for a business that wants the free handouts described in this article and is not willing to support the military, health care or educational needs of this country? Don't buy Pfizer/Allergan, let them sell it in the Ireland market.
Why are we taxpayers subsidizing Pfizer's/Allergan's multimillion dollar executives and shareholders for a business that wants the free handouts described in this article and is not willing to support the military, health care or educational needs of this country? Don't buy Pfizer/Allergan, let them sell it in the Ireland market.
23
Because legislators are bought and paid for by multinational corporations. That is why we need a "revolution" in America. As long as the corporations have control over Congress, this will not change. But there is change in the wind...
1
This is nothing more than a skimming con And should be prosecuted under the Rico Act.
1
One point that is not emphasized enough in this editorial and in general. Much of the basic research leading to the development of pharmaceuticals is carried out under grants from the National Institutes of Health, i.e., at government expense. Big Pharma is riding on the backs of us taxpayers and yet tries not to repay us. I know whereof I speak because I worked 25 years in a medical school in a pharmacology research laboratory. Some of our findings ended up contributing to the development of commercial products.
40
Not only that, but they cry elephant tears over one of the lowest effective corporate tax rates in the world, while simultaneously robbing the taxpayers by hook and crook through the tax code and treaties among the nations the multinationals want to keep their money so it won't be taxed.
Pull all grants from NIH - all of them, and then begin to change the rules before granting them again. Rescind any tax breaks that Big Pharma wants for any research, and prohibit their access to American universities and colleges. This is actually easily done, but pumping up the will of already-bought legislators is the big hurdle.
Bernie will not win, I know that. But Bernie is right on this one. Our nation is going to fall, and fall big time, but it will not be because of ISIS or warfare of that sort. It will erode and flush away from the manipulation of our economy to favor the rich and corporate. We need Bernie's revolution if America is to survive at all.
Pull all grants from NIH - all of them, and then begin to change the rules before granting them again. Rescind any tax breaks that Big Pharma wants for any research, and prohibit their access to American universities and colleges. This is actually easily done, but pumping up the will of already-bought legislators is the big hurdle.
Bernie will not win, I know that. But Bernie is right on this one. Our nation is going to fall, and fall big time, but it will not be because of ISIS or warfare of that sort. It will erode and flush away from the manipulation of our economy to favor the rich and corporate. We need Bernie's revolution if America is to survive at all.
1
In a competitive global economy, this move makes total sense. Until we reform our antiquated corporate tax code, and modernize how we tax non-US revenue, this will practice continue. The answer is simple: stop double taxing foreign corporate revenue, like every other modern country, and the incentive to relocate out of the US will be moot.
10
No, close the US market to any corporation that moves their money out of our country. That is the better idea.
Dear Progressives: have you ever considered creating a corporate environement that might actually cause companies to actually want to be here? No, of course you didn't. If you can't regulate and tax productive actors in the economy it's not worth getting out of bed in the morning.
11
It seems like they want to be here, they just don't want to pay the rent.
82
TPierre...the good people of the United States have seen fit to allow business entities to be organized under the laws of incorporation. In so doing, these said corporations are given certain protections in exchange for a number of obligations. I never thought of it as a "progressive" thing.
2
And Ireland can regulate these financial behemoths? Let's start testing all Phase 1 Safety trials on Irish people then. I'm sure we'll get unbiased results, aren't you?
1
If Pfizer wants us to swallow their shady tax dodge, all they need to do is start handing out those blue pills for free.
5
Once more we bring to light the gulf between the economic interests of a corporation and the needs of the community. The sole reason for any business is to make a profit. If the entity does not make a profit it will fail. In order to make a profit the entity must meet the needs of the community. How those needs are met is the meat of the issue here. We the people, aka the government, need to redefine how traffic flows in this intersection - the marketplace. There must be a balance between the competing needs of both interests here. The question is how do we strike that balance? What behavior is allowable in the marketplace and what is seen as against good order?
10
I am not worried, the GOP will just cut social programs to make up the difference.
14
While the Democrats rake in the money from banks, corporations and hedge funds all while decry capatilism and vacation in the Hamptons. Liberals. What can one say?
Exactly. They have their greedy eyes on Social Security as the new money for corporations. This is their ploy. That it will destroy America is no concern of theirs, as the comment immediately above yours says.
1
Money cannot be held captive. If you want the billions held offshore to be repatriated and US firms to stop leaving in a steady stream the answer is not to become more punitive. Simply reduce the corporate income tax to a level competitive with the rest of the world (a sample of current rates: USA 35% UK 20% Sweden 22% Korea 22% Japan 23.9% Germany 15%) and the money will pour in. Take off the blinders and see what's in front of you.
10
This may be a short term answer. However, as one country cuts taxes, the next will cut lower then another even lower. Corporations are for profit not humanity. We should never expect that any profit driven organization will ever have a conscience.
1
Your comparison is true up to a point. What is the actual rate paid in these countries. Some American corporations like GE have paid zero taxes in some years. I'd like to see if 22% in Sweden is actually 22% or something less. Same with the other countries you mention.
2
btb, what you suggest might be much more doable if we didn't have to have the most expensive military in the world. Other countries can enjoy low corporate tax rates and much better social programs because they know the US takes the burden of defense off their shoulders. We pay for being the world's police while getting screwed by other countries' ability to encourage inversion.
1
It is hilarious to watch how these transactions enrage progressives.
No one is obliged to pay more tax than is absolutely necessary. The government is not entitled to expect that private entities should structure transactions to its benefit. Congrats to Pfizer for doing what everyone, even Progressives in good standing, would do.
No one is obliged to pay more tax than is absolutely necessary. The government is not entitled to expect that private entities should structure transactions to its benefit. Congrats to Pfizer for doing what everyone, even Progressives in good standing, would do.
42
I agree with your statement that no one is obliged to pay more tax than absolutely necessary, but your conclusion that Pfizer should be congratulated is like cutting off your nose to spite your face. The big losers are the American people, and the proximate cause is a Congress that's bought by the likes of Pfizer and other major (often multinational) corporations. I don't blame Pfizer, I blame Congress for screwing us all.
1
The editorial NEVER said that any company should "pay more tax than is absolutely necessary."
The editorial NEVER said that the government is "entitled to expect that private entities should structure transactions to its benefit."
Do you get that? Seriously. Do you get that?!?
Why are you implying that the editorial made such claims? Read it again if you must.
The editorial DID state that Congress should change the laws to block inversions. And, just as they are today, corporations will STILL be free to pay no more tax than absolutely necessary.
The editorial NEVER said that the government is "entitled to expect that private entities should structure transactions to its benefit."
Do you get that? Seriously. Do you get that?!?
Why are you implying that the editorial made such claims? Read it again if you must.
The editorial DID state that Congress should change the laws to block inversions. And, just as they are today, corporations will STILL be free to pay no more tax than absolutely necessary.
2
I might be happy to agree with you if corporations and their in-house legal teams, paid lobbyists, and "paid for" elected officials (and the judges they elevate to the bench) lived by the same "rules" as the rest of us. It is amazing how corporations are "people too" for the purpose of giving unlimited cash to candidates in elections, but are not people when it comes to moving their tax-base off shore. I am a US citizen living off-shore and of course have to file and PAY taxes to the US Gov. no matter where I live in the world. Let the Supreme Court decide if Pfizer is "people too" for the purpose of paying tax to the US Gov. I would be quite curious to see which way they would rule on that!!
2
All I want is for other nations to pay their fair share of drug R/D cost. 2 billion a year, the Dem's give that amount away every day.
1
At this time, I am very careful not to purchase products owned by the Kochs, such as some paper products. I also won't attend a performance at the Lincoln Center Theatre that has the Koch name on it and I won't be going to the Hospital for Special Surgery, because a Koch is on the board. I hope I can do the same with Pfizer products, although it won't be easy as the drug companies are being monopolized. I'd like to see our legislatures helping us out with these tax dodgers and I'm not feeling proud of my Irish heritage right now as Ireland is helping them out. These corporations (shareholders and high level execs) are absolutely insatiable with their lust to make more profits, it feels pathological and certainly unpatriotic. Stop pretending your Americans, you have your own country, the home of the greedy and selfish.
106
If you are trying to live your life by avoiding socially irresponsible corporations, you may as well more to a tree house in Oregon and live off the land
2
So, just to be clear, are the Koch's the tax dodgers or Pfizer? How can one "dodge" taxes if it's perfectly legal? What normal person or company looks for ways to increase their tax liability? Here in Massachusetts, home of the lunatic leftist fringe, our income tax system allows individuals to voluntarily contribute additional tax to the state government. In 2013, there were 1,038 residents who made such a donation, totalling about $250,000. Notably, leading leftist and hero of the "progressive" movement Elizabeth Warren was not among the group. When the leftists start putting their money where their whiny mouths are, then perhaps we can have a conversation. Until then, please keep your hands out of the wallets of productive American individuals and companies.
The idea that you would boycott legitimate charitable institutions because they take money from someone whose politics you disagree with is absurd. Charities aren't supposed to or expected to approve peoples view or all issues before taking their money. In fact if charities were to act in such a manor their tax status might be in question.
3
Liberals are in a deep snit because big corporations, contributors to establishment Democrat and Republicans alike, are taking advantage of tax laws and breaks written by establishment politicians for those corporations. Hilarious.
Liberals cannot and will not recognize simple truths. Our existing tax code is utterly corrupt and is the work of liberal Democrat Politicians and RINO's. They promise the ignorant proles reform and fairness while taking money from the corporations. Why do you thing big insurance supported Obama Care, because they would pay more taxes or make out like bandits? Secondly, taxes on businesses are paid by customers, employees and cuts in quality and moves overseas. That is just a fact. Taxes on businesses are just taxes on ourselves.
There has to be real reform and simplification and a move to a sales tax or some other scheme. Nothing will happen though since the most lucrative benefit of being elected to Federal office is being able to sell access to the tax code to big corporations. As long as we have professional, establishment politicians nothing will change.
Liberals cannot and will not recognize simple truths. Our existing tax code is utterly corrupt and is the work of liberal Democrat Politicians and RINO's. They promise the ignorant proles reform and fairness while taking money from the corporations. Why do you thing big insurance supported Obama Care, because they would pay more taxes or make out like bandits? Secondly, taxes on businesses are paid by customers, employees and cuts in quality and moves overseas. That is just a fact. Taxes on businesses are just taxes on ourselves.
There has to be real reform and simplification and a move to a sales tax or some other scheme. Nothing will happen though since the most lucrative benefit of being elected to Federal office is being able to sell access to the tax code to big corporations. As long as we have professional, establishment politicians nothing will change.
6
New tax code to combat tax avoidance...needed ...otherwise this is a precedent
that is even more egregious than similar mergers...becoming even bigger...and
cornering the market...
It is called in common language...GREED....
that is even more egregious than similar mergers...becoming even bigger...and
cornering the market...
It is called in common language...GREED....
9
Let ask one crucial questions.
At least Americans can pay less ( like Ireland prices ) for Pfizer drugs?
Nope, Pfizer CEO says , over my dead body, we are going to sell high American prices.
If Pfizer become an Irish company, its quality must be lowered.
At least Americans can pay less ( like Ireland prices ) for Pfizer drugs?
Nope, Pfizer CEO says , over my dead body, we are going to sell high American prices.
If Pfizer become an Irish company, its quality must be lowered.
5
When a company does this sort of thing, its products, regardless of origin, should be considered as imports and subject to import tax or an excise tax to make up for the difference. The names of those on the board of directors should also be published so we know just who these greedy tax dodgers are.
If these companies want the protection of the U.S. government they should pay for it.
If these companies want the protection of the U.S. government they should pay for it.
171
They are not tax dodgers! Under the law this move is perfectly legal!
If you have a house with a mortgage and choose to take that deduction - you are a tax dodger too! No one forced you to take that deduction, you could've paid more taxes, but you didn't. Tax dodger!
If you have a house with a mortgage and choose to take that deduction - you are a tax dodger too! No one forced you to take that deduction, you could've paid more taxes, but you didn't. Tax dodger!
2
Do your homework before you write your paper: the Board of Directors are on their web page, here: http://www.pfizer.com/about/leadership_and_structure/meet_board
Don't blame Obama. Try blaming Bush, Clinton, Bush, Regan -- and the various heads of the SEC and the Feds who have allowed all of this bamboozeling to go on now for years. Pity but they knew the loophole was there -- but only real question that we ever need to ask these days is "Is the market up" (hushed tone!!)? (Exhale.)
Following tax laws is not illegal. For corporations it is their responsibility to shareholders and the government. The editors should also look around their neighborhoods! How many are 'hobby farms' to get massive tax breaks? That is certainly the growing case in northern Westchester!
6
Congress will never do the right thing. Thanks to Citizens United, too many legislators are essentially bought and paid for by big business. If any of them starts wavering, a lobbyist will visit and threaten to pour millions of dollars into their opponent's campaign next election cycle. Just another example of how this disastrous POTUS ruling is destroying our country. We have become the United States of America, Inc., and the government no longer represents its citizens. We are witnessing the unraveling of democracy. It is painful to watch.
105
Peter, I think you meant to say this was a disastrous SCOTUS ruling- not POTUS ruling.
3
Whoa Peter, Citizens United was a SCOTUS decision, not POTUS.the worst SCOTUS decision I can remember.Ledbetter was another.
1
I'm sure you meant the SCOTUS ruling, not the POTUS. The Supreme Court - the most pro-business court ever - should hang their heads in shame.
1
I do not suppose the lower taxes will be passed on to the consumer in the form of lower drug prices.
8
If one is a stockholder in this world-wide pharmaceutical company they would be in favor of this deal. Pfizer did what was best for itself by saving money; every company does. And I imagine other companies will follow their example. To finance all of the proposed, wanted, social programs in the U.S., the solution will be to tax the working public more. Plain and simple: you want programs you will pay for them.
4
And if your bank goes broke through sheer criminal greed, don't expect the American worker to bail it out. Plain and simple.
Maybe, at some point, we'll wake up and really start seeing how little government programs - and before you liberals scream foul I'm including defense here - are actually needed...
Eliminate corporate taxes and then tax shareholder earnings (capital gains and dividends) as ordinary income to offset the loss.
This would shift the tax burden to the voters, and reduce the incentive for corporations to lobby for special tax treatment, massively simply the tax code - both personal and business, and make the US the most competitive location to headquarter a business.
While no-one may actually pay the US 35% tax rate, the rate is clearly lower elsewhere if companies continue to invert.
Disclosure - my 100+ year old US company became an Irish citizen a few years ago.
This would shift the tax burden to the voters, and reduce the incentive for corporations to lobby for special tax treatment, massively simply the tax code - both personal and business, and make the US the most competitive location to headquarter a business.
While no-one may actually pay the US 35% tax rate, the rate is clearly lower elsewhere if companies continue to invert.
Disclosure - my 100+ year old US company became an Irish citizen a few years ago.
7
To the Editors,
In the "home of the brave and the land of the Corporate giants", what is immoral is, obviously, not necessarily illegal. In 2008, suffering "the worst financial crisis since the Great Depression", the standard was set for corporations and banks "Too Big To Fail"; pay a few fines, nobody goes to jail and the Stock Market soars to new heights knowing the "Golden Parachute" of the taxpayer will save them.
Or one can do just as General Electric and many other "American" corporations have done and 'invert'! Voila, you're not American but Irish or Barbadian or, well you see the point. Paying "taxes" is for the masses especially when both parties gleefully accept "campaign contributions" from the likes of Big Pharma or, quite frankly, anyone who has a checkbook balance big enough to attract the attention of the "always money hungry" lawmakers.
With the 'average' net worth of a U.S. lawmaker these days hovering around a measly 1.1 million dollars, one can see why our poverty stricken congressmen and senators just HAVE to take money from just about anyone.
So your cry for 'shutting down inversions' will, most likely, fall on very deaf ears as that would possibly upset the 'cash flow' to both the Democrats and the GOP/TP/KOCH AFFILIATE.
In the "home of the brave and the land of the Corporate giants", what is immoral is, obviously, not necessarily illegal. In 2008, suffering "the worst financial crisis since the Great Depression", the standard was set for corporations and banks "Too Big To Fail"; pay a few fines, nobody goes to jail and the Stock Market soars to new heights knowing the "Golden Parachute" of the taxpayer will save them.
Or one can do just as General Electric and many other "American" corporations have done and 'invert'! Voila, you're not American but Irish or Barbadian or, well you see the point. Paying "taxes" is for the masses especially when both parties gleefully accept "campaign contributions" from the likes of Big Pharma or, quite frankly, anyone who has a checkbook balance big enough to attract the attention of the "always money hungry" lawmakers.
With the 'average' net worth of a U.S. lawmaker these days hovering around a measly 1.1 million dollars, one can see why our poverty stricken congressmen and senators just HAVE to take money from just about anyone.
So your cry for 'shutting down inversions' will, most likely, fall on very deaf ears as that would possibly upset the 'cash flow' to both the Democrats and the GOP/TP/KOCH AFFILIATE.
6
This is yet another case where companies privatize the benefits while socializing the risks: otherwise known a lemon democracy.
The CEO of Pfizer explains that this merger is good for the U.S. because it will provide Pfizer with more cash that it can reinvest here. But that cash is already invested here in the form of tax receipts. Therefore, the real purpose is not to invest in that which is important to the U.S., but to invest in that which is important to Pfizer. Thus, this extra cash will undoubtedly be used to further twist an already compliant government to Pfizer's will; something which is decidedly NOT to the benefit of the U.S. and the American people.
The CEO of Pfizer explains that this merger is good for the U.S. because it will provide Pfizer with more cash that it can reinvest here. But that cash is already invested here in the form of tax receipts. Therefore, the real purpose is not to invest in that which is important to the U.S., but to invest in that which is important to Pfizer. Thus, this extra cash will undoubtedly be used to further twist an already compliant government to Pfizer's will; something which is decidedly NOT to the benefit of the U.S. and the American people.
6
I don't mind Pfizer's reincorporation as long as I can buy all my drugs and medical devices from anywhere in the world where it is cheaper for us. This will reduce healthcare bill by trillions more than offsetting the tax revenue loss. Congress needs to wake up and think about people!
12
I agree with the board. Didn't Burger King do the same thing by moving their corporate headquarters to Canada?
To me these companies are basically flipping us the bird and laughing all the way. These paper changes to me are ethically and morally wrong. I do have a question. Doesn't this decision allow the corporate management to receive larger compensation packages as a result? I would think they would like to reward themselves for their unethical practices.
I am curious. If they are based legally in Ireland are they allowed to apply for patents in this country and if so why? Does Pfizer receive any type of specific tax break because they are a research facility as well? Is there a different standard for drug companies?
To me it takes a lot of gall for these people to be driving their Bentley's to work, living in the lap of luxury, on our soil while that the same time doing this. They don't care about what they do as long as they profit from it. This is corporate greed at it's absolute worst
I am a free market guy completely but this is just wrong. You should not be able to exploit the system and profit enormously by it because you sell to an entity in name only. That needs to be shut down.
What's said is I use to have 2,500 shares of Pfizer for over a year. I am embarrassed to share that.
I don't often agree with the board on much, especially prison issues, but on this one they completely nailed it. Terrific column
To me these companies are basically flipping us the bird and laughing all the way. These paper changes to me are ethically and morally wrong. I do have a question. Doesn't this decision allow the corporate management to receive larger compensation packages as a result? I would think they would like to reward themselves for their unethical practices.
I am curious. If they are based legally in Ireland are they allowed to apply for patents in this country and if so why? Does Pfizer receive any type of specific tax break because they are a research facility as well? Is there a different standard for drug companies?
To me it takes a lot of gall for these people to be driving their Bentley's to work, living in the lap of luxury, on our soil while that the same time doing this. They don't care about what they do as long as they profit from it. This is corporate greed at it's absolute worst
I am a free market guy completely but this is just wrong. You should not be able to exploit the system and profit enormously by it because you sell to an entity in name only. That needs to be shut down.
What's said is I use to have 2,500 shares of Pfizer for over a year. I am embarrassed to share that.
I don't often agree with the board on much, especially prison issues, but on this one they completely nailed it. Terrific column
86
The problem is that these corporations want to have their cake and eat it too. And the problem with congress is that it allows itself to be lobbied into going along. One way to address this issue is to make US marginal tax rates roughly the same as in comparable developed countries offering the same corporate protections, while also doing away with corporate welfare and tax code provisions that currently allow corporations to legally lower their effective tax rates well below the maximum. In other words, eliminate the incentive to invert. But, of course, as is the case in so many issues facing our nation, the problem is money in the political system - lobbying money - that precludes a reasonable and helpful solution. Elections matter. Sanders.
3
The companies would have a simple answer. They could actually move their headquarters and some operations to Ireland, and possibly spin off their US operations. This would make their world-wide taxable only in the locations where it is earned.
The correct answer is for the US to follow the example of every other country in the world, and adopt territorial taxation of corporate income. Corporations would still pay the same tax on all the money they make here, which is most of it. Foreign profits would be taxed in foreign countries, but US stockholders would receive this income and pay tax on it in the US.
The correct answer is for the US to follow the example of every other country in the world, and adopt territorial taxation of corporate income. Corporations would still pay the same tax on all the money they make here, which is most of it. Foreign profits would be taxed in foreign countries, but US stockholders would receive this income and pay tax on it in the US.
6
The U.S. Tax system is a complete outlier compared to the rest of the world. Just about all foreign countries have a different system. If a UK company makes money in another country it pays tax in that country and is free to bring the money home. A U.S. company doing business in the same country would pay that country's tax and then face an add on tax if they brought the money home. This is not a partisan issue. It is a screwball system that needs to change.
5
Leave it to the Editorial Board to blame everything except the real problem: American Corporate tax rates are among the highest in the world.
Fix that, and not only will companies not invert, but more companies will want to make America their worldwide corporate headquarters. As it is, the current US tax policy is penny-wise, pound-foolish.
Fix that, and not only will companies not invert, but more companies will want to make America their worldwide corporate headquarters. As it is, the current US tax policy is penny-wise, pound-foolish.
4
http://www.americansfortaxfairness.org/files/Pfizer-Fact-Sheet-FINAL.pdf
Pfizer paid zero dollars for 4 years.
Pfizer paid zero dollars for 4 years.
Corporate taxes in the U.S. look to be higher than in some other countries, but the gap between the nominal tax and what is actually paid is far far greater than in any other country. The fruits of lobbying, but corporation still pretend they are paying the nominal rate.
It is ironic that one of the fastest growing sectors in federal spending is for prescription medications. Drug companies should be free to sell their products anywhere in the world for whatever they care to charge, but they should be prohibited from charging more in the U.S. than they do anywhere else. That would reduce federal spending by billions and also reduce our cumulative trade deficit. Repeal Medicare Part D and implement global parity on drug prices.
1
Congress should be blamed for this legal, but unethical merger. They complain about "job loss" on talk news shows, but have done nothing to prevent this preventable mess despite warnings about needed changes in laws. Congress chooses to "defund" health care organizations for paltry sums while allowing companies like Pfizer to rob us blind. There is little hope that this merger will promote innovation or cost saving for consumers, likely the opposite. Consumers should ask their doctors to prescribe products from other companies, avoiding all OTC from Pfizer as well, sending a message to the CEO and shareholders in the only language they understand: money.
3
How do we make Pfizer pay attention to the American consumer? Boycott their products. Why buy Advil when you can buy Motrin IB? Why buy Alavert when you can buy Claritin? Why buy Centrum vitamins when there are myriad other options? Ask our doctors for alternate prescriptions whenever possible. The list of over the counter Pfizer products is at http://www.pfizer.com/products. Scan the lists, find items you normally purchase, and look into alternatives. We have the power of choice. Reclaim it!
If we wait for our political "leaders" to take action, nothing will ever happen. This is something we need to do by ourselves, for ourselves and for our children's future.
If we wait for our political "leaders" to take action, nothing will ever happen. This is something we need to do by ourselves, for ourselves and for our children's future.
4
In simple terms, this would not be happening if foreign profits of US based companies were not taxed at US rates. Presently US based companies who have foreign earnings must pay foreign taxes. Then if the foreign taxes are lower than US rates the company has to pay additional taxes to the US so that their total tax on foreign earnings equal US taxes which are usually higher. These companies, as you mentioned, regardless of inversion, will pay US taxes on US earnings. Inversion seems like a good idea for companies so they will be taxed fairly where they earn their money. Our own tax code is pushing US based companies out of the US. If the US changes the law to prevent inversion, it will not be long before the US companies move their corporate HQ's out of the US which the US cannot prevent with laws.
2
@NYChap - you missed the "earnings stripping" part. The company's IP to the foreign parent company, which is then licensed back at very high rates to the US subsidiary , so that the most of the company's income is "earned" by the foreign subsidiary.
1
All corporations benefit from the USA. We have the most expensive and best army. Roads, schools, public safety, power and gas, FAA, EPA, parks and on and on. Additionally government support of basic research can be found at the base of many of these corporations best and most profitable products. These things cost money. Large corporations particularly benefit from all of the above.
http://www.americansfortaxfairness.org/files/Pfizer-Fact-Sheet-FINAL.pdf
http://www.americansfortaxfairness.org/files/Pfizer-Fact-Sheet-FINAL.pdf
37
If one was to choose a jurisdiction in which to locate the head office and mind and management of an international business solely on the basis of tax considerations, the choice would not be the United States. There are many jurisdictions that offer lower taxes, or no taxes, on business profits and on the incomes of persons who live in the jurisdiction and work in the business.
What the US offers is a place where the people who work in these businesses actually want to live, plus an entrepreneurial environment which generates successful businesses, plus tax rules that allow a structure that can achieve many of the same objectives that would be achieved if the location of mind and management was truly in those low tax foreign jurisdictions. Is this a smart thing for the US to be offering? If the US did not offer these rules would newly formed and developing countries avoid the US? Would tougher rules leave the US with fewer international head offices, a weaker business environment and a smaller piece of the tax pie in the end? That is the question.
What the US offers is a place where the people who work in these businesses actually want to live, plus an entrepreneurial environment which generates successful businesses, plus tax rules that allow a structure that can achieve many of the same objectives that would be achieved if the location of mind and management was truly in those low tax foreign jurisdictions. Is this a smart thing for the US to be offering? If the US did not offer these rules would newly formed and developing countries avoid the US? Would tougher rules leave the US with fewer international head offices, a weaker business environment and a smaller piece of the tax pie in the end? That is the question.
Teachers, a little something for your lesson plan: "In addition, inverted companies continue to enjoy the protection of patent laws in the United States, as well as their connections, official and unofficial, with federal research agencies — all of which are crucial to drug-company profits. Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health."
5
Global corporations no longer consider themselves part of a national landscape. They operate in a world above and beyond national borders, with little or no interest in any nation's domestic problems. They are the New World Order. Countries are just markets.
Any company will look for an inexpensive way to shift or eliminate tax burden, which to a company is a cost that carries no benefit. We can change our laws, but need to keep in mind that having companies pull out headquarters doesn't help the economy.
We need to rewrite our corporate taxes completely to recognize that the our value is as a market, and to have companies pay for access to that market, rather than tax them as if they were citizens. They aren't citizens; they aren't patriotic; what is good for them, may not be good for America.
Corporations aren't evil - although some corporate leaders might lean that way - they are organizations with a specific goal of maximizing the making of money within whatever legal framework works. That goal can run counter to national interests.
Any company will look for an inexpensive way to shift or eliminate tax burden, which to a company is a cost that carries no benefit. We can change our laws, but need to keep in mind that having companies pull out headquarters doesn't help the economy.
We need to rewrite our corporate taxes completely to recognize that the our value is as a market, and to have companies pay for access to that market, rather than tax them as if they were citizens. They aren't citizens; they aren't patriotic; what is good for them, may not be good for America.
Corporations aren't evil - although some corporate leaders might lean that way - they are organizations with a specific goal of maximizing the making of money within whatever legal framework works. That goal can run counter to national interests.
1
Pfizer is just one of several companies which have taken advantage of the well known "Irish jig", and it's not going to change any time soon. But while we're on the topic of corporate greed, it may interest some to know that the Irish people were victims of a well organized mortgage lending scam in the early 2000's which resulted in a lot of them losing all they had, including in some cases property which had been in their families for generations. The same people who set up and executed all of that have no doubt been part and parcel to the Irish tax laws which allow many American based corporations to hide profits now. So all's well that ends well.
To those who would champion Pfizer for their savvy acquisition-merger, look at the size of this monster, valued at $200 Billion. Their effective tax rate is probably somewhere around 15%, not 35% on their profits, since much is rolled into R&D and other write-offs. But overall, it's just another straw on the camel's back, the camel being the vanishing middle class.
To those who would champion Pfizer for their savvy acquisition-merger, look at the size of this monster, valued at $200 Billion. Their effective tax rate is probably somewhere around 15%, not 35% on their profits, since much is rolled into R&D and other write-offs. But overall, it's just another straw on the camel's back, the camel being the vanishing middle class.
3
Gee, one of our largest multi-nationals exercises its financial responsibility to its shareholders and they are somehow unpatriotic? What if they continue to act in their global shareholders self-interest and discover the cure for cancer? The tax-savings and synergies here may do just that.
1
Once again the NYT editorial board shows its complete ignorance of economics.
7
@Joe
Please educate the masses. 12 words to counter the NYT editorial. I do think it is right on so why am I wrong?
Please educate the masses. 12 words to counter the NYT editorial. I do think it is right on so why am I wrong?
What happened? Seriously, what happened? During the 1950s and '60s corporate taxes were 50 percent, the highest income earners paid some 90 percent or more, and capital gains taxes were 25 to 32 percent. All of these rates were substantially higher than they are today, yet industry and the country thrived. Oh, sure, the homes of the wealthy tended to not be quite as obscenely large, and their lives were often less ostentatious, but our infrastructure was the envy of the world, many of our public universities -- affordable back in those days -- were among the greatest institutions for research and learning in the world, and income distribution and inequality were not nearly as out of whack as our situation is today.
What happened to ideas of corporate citizenship and noblesse oblige? What happened to the mindset of our nation's elites, who once seemed proud to give in order to contribute to the public good, but who now seem to be singularly obsessed with taking all for themselves while society crumbles? Now corporations and the wealthy play states and nations off of one another in a bidding war for the lowest tax rates in a race that lands shareholders on top, and the rest of us at the bottom. And where did the lawmakers go who legislated for the public good, and not just for the benefit of themselves and their wealthy friends and benefactors? Who could've imagined that it would come to this?
When I look at my own country in the mirror, these days, I barely recognize it.
What happened to ideas of corporate citizenship and noblesse oblige? What happened to the mindset of our nation's elites, who once seemed proud to give in order to contribute to the public good, but who now seem to be singularly obsessed with taking all for themselves while society crumbles? Now corporations and the wealthy play states and nations off of one another in a bidding war for the lowest tax rates in a race that lands shareholders on top, and the rest of us at the bottom. And where did the lawmakers go who legislated for the public good, and not just for the benefit of themselves and their wealthy friends and benefactors? Who could've imagined that it would come to this?
When I look at my own country in the mirror, these days, I barely recognize it.
278
Timmy, in a word..............GREED HAPPENED. That and the buying of our politicians.
2
What happened was Milton Friedman, Alan Greenspan and Bill Clinton.
Sadly and badly for us the story continues.
Sadly and badly for us the story continues.
1
Although there are many factors that have resulted in this mess, I think it comes down to these shifts in fundamentals:
- Income inequality started in earnest with Reagan and the dismantling of unions
-Extreme money in politics; Congress is bought and paid for by the highest bidder and politicians who spend 90% of their time fund raising and doing nothing for this country
_Citizens United made it all legal
-Last but not least- extreme right wing propaganda media machines like Fox who spew outrageous lies 24x7. Blame all problems on Dems and take no responsibility for solving issues- just tear down and obfuscate and obstruct.- in other words- brainwashing.
- Income inequality started in earnest with Reagan and the dismantling of unions
-Extreme money in politics; Congress is bought and paid for by the highest bidder and politicians who spend 90% of their time fund raising and doing nothing for this country
_Citizens United made it all legal
-Last but not least- extreme right wing propaganda media machines like Fox who spew outrageous lies 24x7. Blame all problems on Dems and take no responsibility for solving issues- just tear down and obfuscate and obstruct.- in other words- brainwashing.
2
There is a word missing from this editorial. The crucial word missing is "marketing."
Prof Alan Sager of BU has studied drug companies. He has found that they spend about 11% of their budget on R & D, 19% on profit (about twice the average of all industries) and 34% on "Marketing". This includes not only the odious TV and magazine ads, but the thousands of unqualified "pushers" who visit physicians' offices to get them to use various drugs and the many payments to doctors such as fake educational conferences at fancy resorts and stipends to give talks to other doctors based on faulty information supplied by the drug company. The purpose of all this "marketing" is to get us to use drugs we do not need or to use expensive new drugs even when cheaper older drugs are as effective or even more effective. It is clear that we could cut drug prices by at least a third and not impact research at all.
http://www.nytimes.com/2007/11/25/magazine/25memoir-t.html?pagewanted=all
http://www.theatlantic.com/magazine/archive/2006/04/the-drug-pushers/4714/
http://dcc2.bumc.bu.edu/hs/sager/pdfs/020402/Pharmaceutical%20Marketing%...
Prof Alan Sager of BU has studied drug companies. He has found that they spend about 11% of their budget on R & D, 19% on profit (about twice the average of all industries) and 34% on "Marketing". This includes not only the odious TV and magazine ads, but the thousands of unqualified "pushers" who visit physicians' offices to get them to use various drugs and the many payments to doctors such as fake educational conferences at fancy resorts and stipends to give talks to other doctors based on faulty information supplied by the drug company. The purpose of all this "marketing" is to get us to use drugs we do not need or to use expensive new drugs even when cheaper older drugs are as effective or even more effective. It is clear that we could cut drug prices by at least a third and not impact research at all.
http://www.nytimes.com/2007/11/25/magazine/25memoir-t.html?pagewanted=all
http://www.theatlantic.com/magazine/archive/2006/04/the-drug-pushers/4714/
http://dcc2.bumc.bu.edu/hs/sager/pdfs/020402/Pharmaceutical%20Marketing%...
9
Can the news being any more sickening? Where is the outrage from the peoples house, the House of Representatives? Oops, too busy cashing checks given to them by the behemoth corporations. The whole tax efficiency argument is pretty much blown away in a paper by Edward D. Kleinbard, “Competitiveness” Has Nothing to Do With It. As this editorial points out who defends these businesses? Rhetorical question, we do, all for a company like Allergin that provides no social good for anyone unable to afford face freezing to look younger. Sick. Sick country, sick government, sick leaders, and just plain sickening.
21
One of the many myths propagated by conservatives is that our corporate taxes are high compared to other countries. It is true that our nominal rate of 35% is high, but because of loopholes, this figure is meaningless.
A good parameter to look at is total corporate taxes actually paid divided by GDP because neither of these figures can be fudged by corporations. If you look at developed countries, you will see that Norway has the highest value at 12.5%. The US is tied with Turkey for the lowest at 1.8%. If you look at all the countries touted by conservatives as low tax countries such as Ireland or Canada, you will see that their corporate taxes as a percentage of GDP are higher. http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-o...
In addition, during the Great Prosperity, 1946 - 1973, this figure was about 3 times higher than today
It seems to me that if our real corporate taxes were in line with the rest of the world or maybe even higher than the average, corporations would think twice about leaving piles of cash lying around and would reinvest them to avoid paying tax.
A good parameter to look at is total corporate taxes actually paid divided by GDP because neither of these figures can be fudged by corporations. If you look at developed countries, you will see that Norway has the highest value at 12.5%. The US is tied with Turkey for the lowest at 1.8%. If you look at all the countries touted by conservatives as low tax countries such as Ireland or Canada, you will see that their corporate taxes as a percentage of GDP are higher. http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-o...
In addition, during the Great Prosperity, 1946 - 1973, this figure was about 3 times higher than today
It seems to me that if our real corporate taxes were in line with the rest of the world or maybe even higher than the average, corporations would think twice about leaving piles of cash lying around and would reinvest them to avoid paying tax.
146
And tell me, besides fish, what does Norway produce? When did you last buy a Norwegian car or computer or prescription medicine? US corporations reinvest profits to develop products that consumers need and want.
Refreshing! An opinion that emerges from the facts, as distinct from cherry-picked facts chosen to support an opinion. It reminds me of old-fashioned reporting, before "the news" became product. Well, OK, there's still some old-fashioned reporting going on, just not enough. Thank you, Mr. Charlap.
3
JL - Oil.
PS Apple has $203,000,000,000 cash on hand.
PS Apple has $203,000,000,000 cash on hand.
1
Your outrage seems melodramatic and possibly unfounded. You are excited over actions which you state come "at a cost to the Treasury conservatively estimated at $20 billion over 10 years." Yet the oil industry subsidies EACH year are estimated to be around $15 billion. The mortgage interest subsidy (benefit to high income mortgagors and the mortgage lending industry) costs about $70 billion per year.
As for "enriching shareholders and executives," that may be true, but who pays corporate taxes, and thus eventually benefits from avoiding them, is a matter of circumstances. You exclude that consumers also sometimes (though probably significantly less frequently) also are in that group.
Get rid of corporate taxes and tax passive income at higher levels (thus at the individual level where it is really "earned") and that should avoid these games.
As for "enriching shareholders and executives," that may be true, but who pays corporate taxes, and thus eventually benefits from avoiding them, is a matter of circumstances. You exclude that consumers also sometimes (though probably significantly less frequently) also are in that group.
Get rid of corporate taxes and tax passive income at higher levels (thus at the individual level where it is really "earned") and that should avoid these games.
1
There are many other avenues to curtail this "art of inversion " other than a legislation because anytime a so called "bill" is written, a bunch of 'lobbyists' will twist and turn the entire bill to their interest and thus effectively make the entire "bill" toothless, spineless .
What this country needs is enforcing the laws that we still have.
The foremost among them is, abolish the 'Citizens'United Ruling' .
Because no matter how many bills are passed, few congressmen or the Senators or even the President of the United States, will stop the lobbyists from all the big corporations from making sure that there are some loopholes kept in all the bills that the companies'll take advantage of.
And in nearly 99.9% of the bills that are passed, there are always some loopholes left either openly or in hidden languages that are only put in, at the requests of these 'Special Interest Groups'.
So, what, I being a 'non Lobbyist' think, should be done, is a ban on foreign registered companies operating on U.S. soil.
Because what these foreign headquartered companies are doing is, depriving the Treasury Department of hundreds and thousands of dollars in tax collections that the I.R.S. used to collect before all these flaunting of the legislation that have become a total mockery at the present.
But the irony of it is that all these talks and writings are nothing but humbug.
I know people should always be optimistic and think about God .
But not at the present circumstances.tkb
What this country needs is enforcing the laws that we still have.
The foremost among them is, abolish the 'Citizens'United Ruling' .
Because no matter how many bills are passed, few congressmen or the Senators or even the President of the United States, will stop the lobbyists from all the big corporations from making sure that there are some loopholes kept in all the bills that the companies'll take advantage of.
And in nearly 99.9% of the bills that are passed, there are always some loopholes left either openly or in hidden languages that are only put in, at the requests of these 'Special Interest Groups'.
So, what, I being a 'non Lobbyist' think, should be done, is a ban on foreign registered companies operating on U.S. soil.
Because what these foreign headquartered companies are doing is, depriving the Treasury Department of hundreds and thousands of dollars in tax collections that the I.R.S. used to collect before all these flaunting of the legislation that have become a total mockery at the present.
But the irony of it is that all these talks and writings are nothing but humbug.
I know people should always be optimistic and think about God .
But not at the present circumstances.tkb
1
It is childish to expect a global corporation not to move its world headquarters to a lower tax base location -- when it competes globally against other corporations who do have that advantage. Let's get real here. Our corporate taxes have to be competitive, if we want those headquarters here. That is a matter of fact, not some kindergarten quarrel about what is fair.
4
If they want to go let them
Hand them a big tax bill for past taxes on the billions they hid off shore
Ban them for the medicare and Tricare program and any other federal program, they don't want to pay taxes and move out of this country then fine, boycott and ban them
Hand them a big tax bill for past taxes on the billions they hid off shore
Ban them for the medicare and Tricare program and any other federal program, they don't want to pay taxes and move out of this country then fine, boycott and ban them
1
Do you deduct the interest paid for your mortgage from your income when you file your taxes? Do you deduct the money you handed over as a charitable donation? Do you escape taxes by putting money into a 401K? A HSA/FSA? How about buying municipal bonds?
All of the above are tax evasions, all of them are legal. None of them should be. Your politicians have created all the rules - and they are the ones to hold responsible. The Editorial Board believes that the money Pfizer and Allergan earn by selling their products to people who want to buy them is not that of Pfizer or Allergan as their due - yet the Editorial Board believes the money they themselves save by not paying taxes on their mortgage interest, etc., is their due. This is a contradiction - and it demonstrates the greed and envy of the Editorial Board.
The Editorial Board will never be satisfied so long as someone makes a lot of money. Has the Editorial Board ever thought to question the NYT's mergers? Or would that cost the Editorial Board its income stream?
All of the above are tax evasions, all of them are legal. None of them should be. Your politicians have created all the rules - and they are the ones to hold responsible. The Editorial Board believes that the money Pfizer and Allergan earn by selling their products to people who want to buy them is not that of Pfizer or Allergan as their due - yet the Editorial Board believes the money they themselves save by not paying taxes on their mortgage interest, etc., is their due. This is a contradiction - and it demonstrates the greed and envy of the Editorial Board.
The Editorial Board will never be satisfied so long as someone makes a lot of money. Has the Editorial Board ever thought to question the NYT's mergers? Or would that cost the Editorial Board its income stream?
4
Pfizer's two most important duties are to obey yhre law and to maximize shareholder return. Here, they are doing both. We write the rules; they play the game.
4
Do Times editorial writers actually wake up in the middle of the night worrying about the "host of governmental programs" that are currently being
"shortchanged"? Apparently they do, but I am not among them. My thoughts are with shortchanged U.S. taxpayers every last one of whom, rich and poor alike, is being robbed blind by the riot of government "programs" already on the books, not to mention the myriad of other programs that would-be Presidents Clinton and Sanders have in store for us. I say, "Go to it Pfizer." Any sane man seeing a robber with a gun in his hand approaching him on the street naturally runs away and hides.
"shortchanged"? Apparently they do, but I am not among them. My thoughts are with shortchanged U.S. taxpayers every last one of whom, rich and poor alike, is being robbed blind by the riot of government "programs" already on the books, not to mention the myriad of other programs that would-be Presidents Clinton and Sanders have in store for us. I say, "Go to it Pfizer." Any sane man seeing a robber with a gun in his hand approaching him on the street naturally runs away and hides.
4
They want to be an American company, with its privileges and protections, but pay taxes as an Irish company. There should a public campaign against it, a backlash. Their products should be avoided, my take is that we should support the companies that don't do this kind of thing. They get rich here, with the high prices we pay for their products, and then turn around, as a pay it forward go contribute to same other country well being? That is unamerican.
9
The action Pfizer is taking is unfortunate, but is typical of corporate management in today's world. The evasion of taxes has a negative effect on the rest of corporations and individuals who follow the laws.
This action should spur even the Republicans in congress to address this loss of tax revenue. If other countries are providing tax havens for corporate scofflaws, why not eliminate trade and other advantages for those countries? Add custom duties on their products based on their headquarters instead of production to eliminate any overall savings to the fleeing companies.
Additionally, restrict advantages from US policy to companies that are headquartered in the US. Stop them from profiting from programs designed by the governments that they are scorning.
This would take the republicans in congress to show their allegiance is to the US rather than their Corporate benefactors. The actions taken by these corporations do nothing to help the US, but instead harm the country. Make them pay for their actions.
This action should spur even the Republicans in congress to address this loss of tax revenue. If other countries are providing tax havens for corporate scofflaws, why not eliminate trade and other advantages for those countries? Add custom duties on their products based on their headquarters instead of production to eliminate any overall savings to the fleeing companies.
Additionally, restrict advantages from US policy to companies that are headquartered in the US. Stop them from profiting from programs designed by the governments that they are scorning.
This would take the republicans in congress to show their allegiance is to the US rather than their Corporate benefactors. The actions taken by these corporations do nothing to help the US, but instead harm the country. Make them pay for their actions.
1
Pfizer is following the laws. Yes, place duties on all of those cars and computers that Ireland exports to the US - that'll show 'em.
Hillary and Bernie, I do hope you are watching and will speak to this now!
If this is going to be the new game, then we need to slap some "fees" onto companies who use our roads, environment, workers, courts, government agencies like the FDA and so on.
It's not a tax it's a fee for services rendered like any other overhead expense.
And or course, all bets are off on agreements to not negotiate pricing for their single biggest US customer: Medicare/Medicaid/VA
If this is going to be the new game, then we need to slap some "fees" onto companies who use our roads, environment, workers, courts, government agencies like the FDA and so on.
It's not a tax it's a fee for services rendered like any other overhead expense.
And or course, all bets are off on agreements to not negotiate pricing for their single biggest US customer: Medicare/Medicaid/VA
5
Strange: the majority of tax payers get more out net over their lifetime than they put in after accounting for transfers (e.g. expected payout on SS/Medicaid is 400k vs 300k paid in). So, in fact, most of the infrastructure is paid for by corporations and high income individuals.
http://www.aei.org/publication/new-cbo-study-shows-rich-dont-just-pay-fa...
Note this is CBO data, not right wing propaganda.
So pls note your viewing all of society on a transactional basis does not help the liberal case. It is on firmer basis recognizing that money is NOT the only measure of contribution to society,
http://www.aei.org/publication/new-cbo-study-shows-rich-dont-just-pay-fa...
Note this is CBO data, not right wing propaganda.
So pls note your viewing all of society on a transactional basis does not help the liberal case. It is on firmer basis recognizing that money is NOT the only measure of contribution to society,
Not to be a broken record, but perhaps the time has come to emphasize taxing what corporations pay out, not what they earn - like capital gains, dividends, stock options, and the salaries of the mega earners (though significantly higher marginal rates on income over, for the sake of argument, $2 million a year).
The President could try to get Congress to tighten loopholes, but given the combination of corporate interests controlling Congress coupled to the curse of gerrymandered districts (with us until at least 2022), that would likely be a fool's errand.
Of course, getting individual takes hikes through a Republican Congress (offset by a significant reduction in the corporate rate) will also be torturous - but I'm not clear that anyone else has a better idea, aside from howling at the moon.
Obviously, if the President can get the IRS to rewrite regulations so that they disallow this type of scam, he should - ASAP.
American corporations ultimately rely on an extraordinarily expensive United States military to safeguard their business interests around the world, and it is beyond unseemly that so many attempt to welsh on paying their fair share to support it - or for the national infrastructure that they equally rely on in order to conduct business at home.
This is precisely what happens when a cult of degenerate selfishness, masquerading as liberty, is allowed to run roughshod over the needs of Union.
The President could try to get Congress to tighten loopholes, but given the combination of corporate interests controlling Congress coupled to the curse of gerrymandered districts (with us until at least 2022), that would likely be a fool's errand.
Of course, getting individual takes hikes through a Republican Congress (offset by a significant reduction in the corporate rate) will also be torturous - but I'm not clear that anyone else has a better idea, aside from howling at the moon.
Obviously, if the President can get the IRS to rewrite regulations so that they disallow this type of scam, he should - ASAP.
American corporations ultimately rely on an extraordinarily expensive United States military to safeguard their business interests around the world, and it is beyond unseemly that so many attempt to welsh on paying their fair share to support it - or for the national infrastructure that they equally rely on in order to conduct business at home.
This is precisely what happens when a cult of degenerate selfishness, masquerading as liberty, is allowed to run roughshod over the needs of Union.
7
Economics 101 reminder: Corporate taxes are never borne by corporations, as only individuals pay taxes. If Pfizer pays a higher corporate tax rate, that is ultimately borne by its customers (in the form of higher prices), its employees (in the form of lower wages), and its shareholders (in the form of lower returns on investment).
So, here is a bombshell: the effective corporate tax rate should be zero. That would draw more companies to U.S. soil, who would hire more employees, who would pay more in individual taxes, etc.
So, here is a bombshell: the effective corporate tax rate should be zero. That would draw more companies to U.S. soil, who would hire more employees, who would pay more in individual taxes, etc.
5
That's not a bombshell, that's Ronald Reagan trickle down effluent that has so stunningly done so much for the bottom 95% during the past 35 years. No taxes, no minimum wages, part time employees that you can fire at will, no pension retirement funds, Trump-style bankruptcies, no payment for roads and their maintenance, no payment for sewars, schools, fire protection, state or federal military/police protection, little or no health care support for the employees, slave or robot labor if you can get it.
3
So Pfizer gets all the protection afforded to it by US law but it does not have to pay for it. This is what you get with a bought and sold congress.
5
Never mind the tax consequences of this combination for now. The United States still has anti-trust laws on the books, and were the president less of a lap dog for the corporate rulers of America, he would have been so energetic in the use of those laws over the past 7 years that no one at Pfizer would have dared try this now. But this is Obama, who despite his history as a community organizer and "progressive", has proven himself to be the ultimate shill and shield for what the Globalists want: open borders for the free flow of labor and capital, and merger after merger. The idea of the nation-state is alien to their way of thinking. Competition is wasteful. And the president is there to serve -- them. Clinton II is not likely to be any better.
THIS is part of the reason why Trump (and to a lesser extent Sanders) has such staying power. Because rising numbers of Americans are sick of having a president who other than to wring his hands, can't be bothered to use the power of the presidency to actually do something that the Corporate masters of America disapprove of.
THIS is part of the reason why Trump (and to a lesser extent Sanders) has such staying power. Because rising numbers of Americans are sick of having a president who other than to wring his hands, can't be bothered to use the power of the presidency to actually do something that the Corporate masters of America disapprove of.
I once had a freelance gig at Pfizer. The biggest thing I remember about it was that it was a total waste of money for them, since my mission was ill-defined and poorly utilized. But I did enjoy those chocolate covered strawberries left on plates for corporate scavengers.
The very concept of inversions makes a travesty of our corporate tax system. And the thing that gets me is that it's so brazen. One would think that tax avoidance shenanigans would be more hidden. But no, Pfizer's Annual Report will be full of glowing terms like "maximized value for shareholders.
Skipping a company's full tax burden while enjoying the perks of American business law and the research fruits from NIH is just plain sleazy. It used to be that corporate successes somehow filtered down to American society.
But as this editorial points, it's pretty hard to justify the outright theft of a mega-pharma entity thumbing its nose at its tax obligations. Perfectly legal, they say. Yeah, a lot of things are "perfectly legal" that that doesn't make them right. It would be nice if American businesses acknowledge their obligation to pay their fair share.
Particularly since they have no problem taking their fair share--and then some--of US government-sponsored research and infrastructure.
The very concept of inversions makes a travesty of our corporate tax system. And the thing that gets me is that it's so brazen. One would think that tax avoidance shenanigans would be more hidden. But no, Pfizer's Annual Report will be full of glowing terms like "maximized value for shareholders.
Skipping a company's full tax burden while enjoying the perks of American business law and the research fruits from NIH is just plain sleazy. It used to be that corporate successes somehow filtered down to American society.
But as this editorial points, it's pretty hard to justify the outright theft of a mega-pharma entity thumbing its nose at its tax obligations. Perfectly legal, they say. Yeah, a lot of things are "perfectly legal" that that doesn't make them right. It would be nice if American businesses acknowledge their obligation to pay their fair share.
Particularly since they have no problem taking their fair share--and then some--of US government-sponsored research and infrastructure.
4
"maximized value for shareholders" - that is precisely what public companies are obligated to do and that is why your 401K gains value over time. You don't think government wastes billions on its variation of "chocolate covered strawberries"?
@JL: there are profits, and their are profits. I'm quite sure that Pfizer, which makes gazillions on their medicines (I'm a retired medical writer who worked extensively on Pfizer communications programs) can deliver substantial value to shareholders without artificially inflating said profits by tax ripoffs. OK, it's legal, but that doesn't make it right. The fault is in our legislators, bought and paid for by the very same companies such as Pfizer who are profiting handsomely from inversions as well as big deals through TPP, including no competition from generics (eg, artificial price boosting courtesy of the trade deal)
4
With this over-the-top deal, Pfizer and Allergen may well be killing the goose that laid the golden egg. If Congress does not react to this deal with amendments to the tax code to collect a fair share of taxes from international companies, one wonders if anything could make that happen.
The tax strategies for international companies based in the US are offensive even without an inversion transaction, and with an inversion transaction the goal can be literally to pay no tax, anywhere, ever. It is ironic that these tax strategies have evolved in the pharmaceutical business. Not only does US provide the drug companies with their richest and most lucrative market, it provides tax rules that permit complete avoidance of tax on the profits. The fact that the rules also have the effect of encouraging the reinvestment of foreign profits abroad make the current rules even more ridiculous.
Of course a foreign based company with its management and control in the right jurisdiction could adopt a structure that would avoid all taxes the US companies seek to avoid with their machinations, which is where the competitive issues come in. The developed countries of the world would benefit from a uniform approach to the taxation of international businesses, but that is probably unlikely. The US legislation to deal with this issue will be interesting.
The tax strategies for international companies based in the US are offensive even without an inversion transaction, and with an inversion transaction the goal can be literally to pay no tax, anywhere, ever. It is ironic that these tax strategies have evolved in the pharmaceutical business. Not only does US provide the drug companies with their richest and most lucrative market, it provides tax rules that permit complete avoidance of tax on the profits. The fact that the rules also have the effect of encouraging the reinvestment of foreign profits abroad make the current rules even more ridiculous.
Of course a foreign based company with its management and control in the right jurisdiction could adopt a structure that would avoid all taxes the US companies seek to avoid with their machinations, which is where the competitive issues come in. The developed countries of the world would benefit from a uniform approach to the taxation of international businesses, but that is probably unlikely. The US legislation to deal with this issue will be interesting.
1
"just because you can, doesn't mean you should"
The justification to game the system with inversions and deferred compensation and any number of legal maneuvers has become the norm in corporations. And the 35% rate is a joke, these corporations have whole departments dedicated to figuring out new ways to avoid paying taxes.
As one commenter stated, (paraphrasing) the executives are only doing the job they were elected to do. That may well be the case, but in doing their job they are denying their fellow citizens the level playing field they claim to be seeking.
The justification to game the system with inversions and deferred compensation and any number of legal maneuvers has become the norm in corporations. And the 35% rate is a joke, these corporations have whole departments dedicated to figuring out new ways to avoid paying taxes.
As one commenter stated, (paraphrasing) the executives are only doing the job they were elected to do. That may well be the case, but in doing their job they are denying their fellow citizens the level playing field they claim to be seeking.
4
Tax minimization using legal means in a manner that is in the best interests of the corporation is clearly a duty of management, as well it should be. If the US wishes to change its tax code to tax international corporations differently or to prevent transactions of this kind, the US is free to do that. There are no moral issues here. I completely disagree with your comment.
1
Of course corporations do whatever they want, they paid for the right directly to the politicians who now protect them. Campaign finance reform is the only way to put a stop to this. The joke is on us, however, because the only people who could make the change are those who benefit from the system as is. This inversion thing is just one recent example of what's been going on since the beginning of time and which likely will continue forever: the powerful exploit the weak in order to obtain the largest share of whatever resources are up for grabs, and will guard their position at the top by any means. If you don't like it, go out and get yourself some power of your own and change it. Yet, I bet that if you did find yourself in such a position, you'd become, quickly, just like them.
1
Stop blaming the Corporations Blame the legislature
3
The answer is for the US to lower the corporate rate to 20% and eliminate loopholes. It will make us more competitive in the global market and stop the flow of major American companies to foreign jurisdictions. It would also help bring home the billions that major companies like Apple are keeping overseas. Do you think that the companies will stay here and continue to pay the highest rates in the industrialized world out of a sense of patriotism? If we do nothing or raise rates as the Democratic candidates have been suggesting ( to make corporations pay their fair share) then eventually all major companies that can will leave the US and we will be sorry they did.
3
No country in the world taxes active business income earned by the foreign subsidiaries of its domestic corporations until the income is repatriated to the home jurisdiction, and sometimes not even then. There are difficult issues here, and the US rules clearly need a review.
"Reincorporating abroad is a sophisticated variation on the old practice of avoiding corporate taxes by renting a post office box in the Caribbean and calling it corporate headquarters. Congress put a stop to those tactics in 2004. It is past time to shut down inversions as well." See this for a profit picture of Pfizer:
http://www.bloomberg.com/news/articles/2015-04-28/pfizer-cuts-2015-forec...
The drug Ibrance, originally developed by Pfizer but never used, was researched thoroughly, not by Pfizer, but by 2 researchers at UCLA, Dennis Slamon and Richard Finn. The development of some cancer drugs in at least this instance was funded, not by Pfizer apparently but by the Noreen Fraser Foundation . . . "The research funded includes preclinical work that led to the discovery of a new targeted treatment currently in a Phase III trial. An outline of all NFF funded research at UCLA is provided below. - See more at: http://www.noreenfraserfoundation.org/grantmaking/ucla-2/#sthash.8A5GjJj..."
Given that foundations such as the Fraser Foundation at UCLA fund the development of drugs to treat cancer, I find it puzzling that Pfizer should be given credit for the drugs they market aside from the obvious marketing ploys. As stated the article: "Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health.'
http://www.bloomberg.com/news/articles/2015-04-28/pfizer-cuts-2015-forec...
The drug Ibrance, originally developed by Pfizer but never used, was researched thoroughly, not by Pfizer, but by 2 researchers at UCLA, Dennis Slamon and Richard Finn. The development of some cancer drugs in at least this instance was funded, not by Pfizer apparently but by the Noreen Fraser Foundation . . . "The research funded includes preclinical work that led to the discovery of a new targeted treatment currently in a Phase III trial. An outline of all NFF funded research at UCLA is provided below. - See more at: http://www.noreenfraserfoundation.org/grantmaking/ucla-2/#sthash.8A5GjJj..."
Given that foundations such as the Fraser Foundation at UCLA fund the development of drugs to treat cancer, I find it puzzling that Pfizer should be given credit for the drugs they market aside from the obvious marketing ploys. As stated the article: "Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health.'
12
Whenever corporations (or the political party they own) complain about American corporate tax rates, can it please be pointed out that from 1951 to 1986, the top corporate tax rate was at least 46%, was over 50% from 1951 to 1963, and that corporations used to pay a much higher percentage of our total tax bill? That would give some perspective to their constant whining, and would also enable the NYTimes to point out how much better our economy performed when we had much higher corporate tax rates (and far fewer corporate tax loopholes). It would also provide an opportunity to educate readers how much of the tax burden has been shifted to the working poor and middle class via the payroll tax.
If Republicans can dupe their voters with repetition of lies, might it not be possible to counter said lies by repeating the truth?
If Republicans can dupe their voters with repetition of lies, might it not be possible to counter said lies by repeating the truth?
11
Citizens United must have a role in prohibiting legislation prohibiting inversion.
1
The ' earnings-stripping ' issue is the real problem, since it allows companies to keep all their assets and executives in the U.S., taking advantage of our markets, our security, and their families enjoy our society, while the political climate favoring corporations is better in the U.S. than wherever else executives might want to go - after all, why are the executives here in the first place ?
Question: In addition to benefitting from government research, how much of Allergan/Pfizer's revenues come from Americans who have at least part of their prescriptions paid for by the U.S. government ? How much does that amount to per year ?
Question: In addition to benefitting from government research, how much of Allergan/Pfizer's revenues come from Americans who have at least part of their prescriptions paid for by the U.S. government ? How much does that amount to per year ?
67
It is very sad to realize there are thousands of family man getting up every day and go to an office figuring out best ways how to destroy our society - KPMG and their likes.
3
citizen - Yes, there's something quite obscene and stomach-turning about these corporate 1%-ers and their other high level managers declaring themselves Irish in order to pay lower corporate taxes, but not moving to Ireland instead of staying ensconced in the U.S. of A. shielded by our military, the T.S.A., and whatever cyber-security is provided by our government - it's an obscenity :(
But you highlight our real problem - most of the tax laws, etc., favoring the uber-wealthy are secured by lobbyists for bankers/lawyers/accountants/wealth consultants who get the savings in tax dollars routed to their organizations/clients and from which the ' wealth industry ' extracts fees for management/speculation/financialization. This is why polling data shows that many of the rich want their taxes raised (especially they self-made):
http://www.cnbc.com/id/100335218
yet the wealth industry lobbyists are always obtaining new tax favors.
It's the same problem as we see with the gun lobby, where they are able to block Congress from doing what huge majorities of Americans favor regarding back-ground checks:
https://www.washingtonpost.com/news/the-fix/wp/2013/04/03/90-percent-of-...
Lobbyists are the bane of our Democracy.
But you highlight our real problem - most of the tax laws, etc., favoring the uber-wealthy are secured by lobbyists for bankers/lawyers/accountants/wealth consultants who get the savings in tax dollars routed to their organizations/clients and from which the ' wealth industry ' extracts fees for management/speculation/financialization. This is why polling data shows that many of the rich want their taxes raised (especially they self-made):
http://www.cnbc.com/id/100335218
yet the wealth industry lobbyists are always obtaining new tax favors.
It's the same problem as we see with the gun lobby, where they are able to block Congress from doing what huge majorities of Americans favor regarding back-ground checks:
https://www.washingtonpost.com/news/the-fix/wp/2013/04/03/90-percent-of-...
Lobbyists are the bane of our Democracy.
5
Lobbyists exist only because legislators are willing to be bought off. Or should we say begging to be bought off. That's why there are 10 lobbyists for every legislator in Washington.
So now they should be barred from doing business with American tax payers. Plain and simple.
9
The WTO disagrees with you.
1
Bravo for Pfiver. America needs to decide whether we want to have the most punitive corporate tax rate in the world or a thriving economy that doesn't drive businesses away. The liberal baloney we hear regarding "tax loopholes...hidden profits" etc. is nonsense. If corporations weren't forced into taking such cumbersome accounting as inversions demand they wouldn't do it. Fact: profits locked up outside the U.S. stay there. Lower taxes to something approaching Ireland and our country will be attracting business instead of driving it away. Shame on Congress which only knows how to dispense monies it doesn't have. Hopefully more creative corporations will follow in Pfizer's path until the lesson is driven home to the gadflies posing as leaders.
20
Please Google and read “Competitiveness” Has Nothing to Do With It by Edward Kleinbart. Totally blows a hole in your argument.
1
http://www.nytimes.com/2015/11/23/opinion/giving-billions-to-the-rich.ht...
Read this and we can see why there problems with taxes and it called congress
Read this and we can see why there problems with taxes and it called congress
1
Am I supposed to believe Pfitzer is headed for bankruptcy if they don't do this ...
This is the thanks Pfizer shows to the American people who have poured billions into its coffers because Medicare Part D prohibits the government from negotiating drug prices. And never mind the money given to Pfizer by a Democratic Congress as a bribe for its acceptance of the Affordable Care Act.
This latest inversion and Congress's inability to stop them shines a bright neon light on the power, influence and control these huge multi-national corporations have on Congress, the Executive and even the Judicial branches of our governments, state and Federal.
Although laws against inversions would help, the real solution is to negate the power these multi-nationals have on our institutions of government.
Break them up.
This latest inversion and Congress's inability to stop them shines a bright neon light on the power, influence and control these huge multi-national corporations have on Congress, the Executive and even the Judicial branches of our governments, state and Federal.
Although laws against inversions would help, the real solution is to negate the power these multi-nationals have on our institutions of government.
Break them up.
47
No. Get rid of professional, establishment politicians. They go to congress to make money. It's their business. They make most of it selling laws to corporations. It's past time for liberals to wake up and see the world the way it really is.
1
The privilege of forming a corporation is conferred by states. Corporations have no right to exist. The corporate charter may be revoked by the state in which it was conferred or by the Federal authorities. Corporate lawyers will fight, using their vast wealth to resist revocation of their charters. Remedies to facilitate revocation will, therefore, have to be federal. Arguments to prevent revocation can be overcome when crimes have been committed by the corporation that supersede civil arguments. Murder, manslaughter are most evident causes for treating corporate persons to termination. The difficulty will become one of denying the corporate narrative of rights and liabilities that result in super citizenship rights that they insist are theirs. Once those claims have been rendered moot, litigation can proceed in criminal courts. Then fraud, tax evasion, theft of resources, damage to life supporting environment, may become feasible. What is needed is a case in which the vulnerable underbelly of behemoth corporations is exposed. Manslaughter is the likeliest crime to start the process. BP is a prime example for manslaughter resulting from negligent deaths in the Gulf of Mexico.
Pfizer is perpetrating a fraud that must be presumed by the EU and the US. RICO laws in America should be adequate. The EU has been developing robust tax avoidance penalties that should also suffice.
Sovereign nations must exert their prerogatives or surrender to corporate governance. Climate change?
Pfizer is perpetrating a fraud that must be presumed by the EU and the US. RICO laws in America should be adequate. The EU has been developing robust tax avoidance penalties that should also suffice.
Sovereign nations must exert their prerogatives or surrender to corporate governance. Climate change?
15
The this Editorial is spot on. I do not envision that Congress will take any action. Lobbyist will ensure it would not see the light of day! Congress is well aware of this loophole , but campaign donations are the endgame.
21
An individual American earning money abroad is fully liable for American income taxes, but will get credit for any taxes paid to a foreign taxing authority. That's the way our corporations need to be taxed.
All money earned by our corporations and their phony-baloney subsidiaries should be DEEMED US income regardless of where the money is earned or whether it's brought home. At the same time we should reduce our corporate tax rate from about 35% to about 18%.
Do that and American companies will not leave plus foreign companies will move here.
All money earned by our corporations and their phony-baloney subsidiaries should be DEEMED US income regardless of where the money is earned or whether it's brought home. At the same time we should reduce our corporate tax rate from about 35% to about 18%.
Do that and American companies will not leave plus foreign companies will move here.
12
That is the way they are taxed. Please Google and read “Competitiveness” Has Nothing to Do With It by Edward Kleinbart.
1
Foreign companies are already moving here. Mercedes,BMW,Honda,Toyota etc
Corporations continue to find ways to NOT pay taxes and the Republicans continue to cut taxes mostly for the wealthy. Soon the only source of tax revenue will be those of us in the upper middle class on down who worked for salaries all of our careers. Just another example of life is not fair and another example of our Congress doing nothing to help level the playing field.
20
Until we get a handle on multinational corporations, democracy is in trouble.
Historically (in the US) a corporation could not exist beyond the lifetime of a human, had to prove it served the public interest, could not own other corporations, were limited as to activity, were banned from political involvement & management could be held criminally liable. Imagine what would have happened after the Wall Street crash had that been the case.
The deck is stacked in favor of corporations, is getting stacked more heavily in their favor over time & the tail is wagging the dog.
Taxes are but a small slice if the bigger problem. Under Investor-State Dispute Resolution provided for under the Trans-Pacific Partnership and other "free trade" deals, corporations can drag governments- including the US Government- into what are Kangaroo Courts composed of a cabal of incestuously linked corporate lawyers instead of the courts of the United States or of other countries to challenge laws, regulations, zoning and such if they claim it will harm their profit.
Most corporations are virulently anti-union (an employment contract), but wish to bind customers and sometimes vendors under contracts (EULAs, Terms of Service, etc) that force them to waive their legal rights to remedy in the courts as a condition of service or relationship. Again, arbitration instead of the courts in an incestuous arrangement.
Taxes are but the latest insult for the heads I win, tales you lose crowd.
Historically (in the US) a corporation could not exist beyond the lifetime of a human, had to prove it served the public interest, could not own other corporations, were limited as to activity, were banned from political involvement & management could be held criminally liable. Imagine what would have happened after the Wall Street crash had that been the case.
The deck is stacked in favor of corporations, is getting stacked more heavily in their favor over time & the tail is wagging the dog.
Taxes are but a small slice if the bigger problem. Under Investor-State Dispute Resolution provided for under the Trans-Pacific Partnership and other "free trade" deals, corporations can drag governments- including the US Government- into what are Kangaroo Courts composed of a cabal of incestuously linked corporate lawyers instead of the courts of the United States or of other countries to challenge laws, regulations, zoning and such if they claim it will harm their profit.
Most corporations are virulently anti-union (an employment contract), but wish to bind customers and sometimes vendors under contracts (EULAs, Terms of Service, etc) that force them to waive their legal rights to remedy in the courts as a condition of service or relationship. Again, arbitration instead of the courts in an incestuous arrangement.
Taxes are but the latest insult for the heads I win, tales you lose crowd.
112
If our Congress wasn't bought and paid for, we could write a bill refusing to share research with such, but a quick search on the internet reveals the Governor of Michigan let Pfizer fund his inaugural party --- I can only imagine what else they have funded.
Well, my dad used to say, "you can't fight city hall, but you can ................ uhm, do something to the doorstep and run?" They've already been made a laughing- stock, as I can't quit laughing every time I consider the "wrinkle" people joining forces with the "lasts more than four hours" people. What's left?
Well, my dad used to say, "you can't fight city hall, but you can ................ uhm, do something to the doorstep and run?" They've already been made a laughing- stock, as I can't quit laughing every time I consider the "wrinkle" people joining forces with the "lasts more than four hours" people. What's left?
7
The fact that something is legal does not make it acceptable.
I may not be able to dish out punishment that pfizer will even notice, but I can choose to not contribute to these tax dodgers.
http://www.pfizer.com/products - I'll look around and see what I can live without.
I may not be able to dish out punishment that pfizer will even notice, but I can choose to not contribute to these tax dodgers.
http://www.pfizer.com/products - I'll look around and see what I can live without.
14
They are all alike.
4
The corporations are simply optimizing their tax bill. You can't blame them for that. In fact, that is exactly what is expected of the executives when they take the job. Any change needs to come from legislators.
It's not just the very high US corporation tax rate of 35%, its also the fact that worldwide profits are taxable, not just profits in the US. That is not the case in any other industrialized country. UK tax rate is 18%, Germany its 25%. The United States has simply become uncompetitive in this area, and in a global economy that is punished very quickly.
It's not just the very high US corporation tax rate of 35%, its also the fact that worldwide profits are taxable, not just profits in the US. That is not the case in any other industrialized country. UK tax rate is 18%, Germany its 25%. The United States has simply become uncompetitive in this area, and in a global economy that is punished very quickly.
10
However Caezar, "As the Wall Street Journal explained on Sunday: "Pfizer's accounting methods raise its reported tax rate, without increasing the actual taxes the company pays. More than two-thirds of the company’s 2014 tax expense—$2.2 billion out of $3.1 billion—was money the company will actually pay only if and when it chooses to repatriate foreign profits." And that actual tax rate for Pfizer was around 7.5%.
As you and almost everyone else knows, while that listed tax rate for corporations is 35%, very very few corporations pay anywhere near that after all of the allowable deductions.
As you and almost everyone else knows, while that listed tax rate for corporations is 35%, very very few corporations pay anywhere near that after all of the allowable deductions.
27
"Once the paper shuffling is complete, much if not most of Pfizer’s earnings — including those that are made in the United States — will be taxed at global tax rates that are generally lower than American tax rates."
Doesn't the last segment of your sentence above give you a hint of why this is happening?
Of course this is a huge problem, but changing the law is not the only way to fix this issue. Also, the maneuver is - as you say- completely legal, so referring to the merger as "tax-dodging" and "robbing the treasury" is disingenuous at best and slander at worst.
Can't the NY Times Editorial Board come up with a more comprehensive idea other than "Tax em'"?
Doesn't the last segment of your sentence above give you a hint of why this is happening?
Of course this is a huge problem, but changing the law is not the only way to fix this issue. Also, the maneuver is - as you say- completely legal, so referring to the merger as "tax-dodging" and "robbing the treasury" is disingenuous at best and slander at worst.
Can't the NY Times Editorial Board come up with a more comprehensive idea other than "Tax em'"?
11
Oh please! Why is this not available to middle class citizens then?
17
"Can't the NY Times Editorial Board come up with a more comprehensive idea other than 'Tax em'"?
Sure! If they don't want to pay taxes in the US, deny them all government benefits, programs or subsidies paid for by US taxpayers.
Sure! If they don't want to pay taxes in the US, deny them all government benefits, programs or subsidies paid for by US taxpayers.
22
It is available to the middle class! Living overseas a US Couple is exempt on there first $100k each of income. So there you go. Move somewhere else and you can only pay tax on your US income. Or give up your US Citizenship like the corporations and only get taxed on your US Income.
1
Apparently the Board has never heard about worldwide combined reporting - developed at the state level and tested and approved by the US Supreme Court three times. First in 1983 in the Container Corp. case and again in 1994 in the Barclays Bank and Colgate-Palmolive cases. The votes in these cases was 5-3 (justice Stevens did not participate), 7-2, and 9-0, respectively. The Attorneys General from the majority of states that tax corporate income filed amicus briefs in these cases in support of worldwide combined reporting. This method of taxing a multinationals worldwide profits via formulary apportionment determines taxable income in a given state by sales, payroll, and real property - how much in-state versus worldwide. It levels the playing field and treats all corporations - small, regional, national, and multinational based in the US or other countries - the same.
So how many states today employ mandatory worldwide combined reporting for any multinational corporation, US or foreign based, operating in their state? Zero. Most states have adopted water's edge combined reporting - better called watered-down or skim milk combined reporting - which excludes the profits of "overseas business organizations" - foreign subsidiaries and foreign parents - from a state's tax base. The reason why is something that the Editorial Board should investigate and report. Hint: Margaret Thatcher.
So how many states today employ mandatory worldwide combined reporting for any multinational corporation, US or foreign based, operating in their state? Zero. Most states have adopted water's edge combined reporting - better called watered-down or skim milk combined reporting - which excludes the profits of "overseas business organizations" - foreign subsidiaries and foreign parents - from a state's tax base. The reason why is something that the Editorial Board should investigate and report. Hint: Margaret Thatcher.
17
Another reason why big corporations have zero respect. And of course, this merger will most likely lead to large layoffs. Congrats Pfizer and Allergran, your merger will most likely the American taxpayer and U.S. labor.
17
Companies which move overseas to avoid taxes should be charged fees for each and every service their taxes would go for. Do you want police and fire protection? How about drivable roads into your facility? These things cost money. The move to merge is greed plain and simple. It is disgusting.
35
Yes, and they can pass on the costs to the customer as usual!
8
Meanwhile, five police officers surround a poor man on the street, tackle him to the ground and choke him to death for selling untaxed cigarettes.
152
Perverse doesn't even begin to describe the double standards applied to the rich and the poor, the powerful and the powerless. We are back in the 19th century for sure.
5
Our tax laws were not written for the modern world. Physical location doesn't matter when modern communication facilities make virtual presence cheap. When this was not so, a corporate headquarter's location imposed constraints on its business. That is not the case anymore. We need a system of corporate taxation that collects the taxes based on the location of the transactions that created the income. Taxation based on a completely artificial concept of income accrued to a corporate headquarters.
42
Excellent point. I suppose VAT is that. But it only taxes the end user.
This is just one more example of crooked corporations running this country and thumbing their noses at America. Yes I'm going there. That entire 'private sector is the best' meme, we see the private sector is pretty much does not believe in this country or what it is supposed to about, and these folks are now running this country as they have bought and paid for the politicians, especially Republicans.
83
Isn't there a law against foreign companies lobbying US government officials ? If not there should be.
50
Why would a company headquartered in a nation other than the USA get all the protections of the US government? Should they be allowed to participate in US politics, benefit from patent protection, have the US laws protect their intellectual property, prevent competition, have limited liability protection, and protect their interests outside the USA as well?
Move your HQ to avoid paying your share of the cost of operating in the USA and you no longer get any of those protections. Without patents, then a domestic corporation can make a competing product inside the USA using US workers as well as all the protections provided by being a US corporation.
That could be a win-win.
Move your HQ to avoid paying your share of the cost of operating in the USA and you no longer get any of those protections. Without patents, then a domestic corporation can make a competing product inside the USA using US workers as well as all the protections provided by being a US corporation.
That could be a win-win.
191
You are absolutely right. Corporations become the worst kind of free-riders.
3
Because US companies get the same protection in other markets where they sell.
1
Not to mention that these same greedy American drug companies are protected by the same useless politicians that prevent American citizens from buying drugs abroad at a much cheaper rate. And it is these same drug companies that sell those drugs cheaper abroad but reap obscene profits in the USA from the protected inflated rates. And this is a functioning democracy?
4
Global terrorism, killing unarmed citizens in theaters and cafes, on the one hand, and now global tax evasion, stealing government-subsidized research while gouging health plans and citizens first-dollar out of pocket health spending on the other hand. Both show the innate vulnerabilities of our current "world order" in protecting citizens from jihadist murderers and corporate thieves who thrive on the gaps between sovereign states.
Show me the Ireland Defense Department that is now protecting Pfizers' operations in the US.
Show me the Ireland Defense Department that is now protecting Pfizers' operations in the US.
49
We seem to have forgotten that operating a business in the United States is not a right, it's a privilege.
To put it in words that business types can understand, please consider that this country is "owned" by its citizens, the majority of whom are neither rich executives nor business owners. We are the shareholders. We shareholders allow these businesses to operate on our shores. Why should we continue to allow the Pfizers of the world and their ilk to operate here? They're not creating shareholder value for us, the shareholders of the country. And isn't shareholder value the ultimate shining golden goal?
Why are the wage earners of this country satisfied to continue subsidizing the taxes of these corporations? They not only expect us to pay their taxes for them, they expect us to pay it out of the greatly diminished wages they deign to hand us from on high. And then we're also supposed to take for granted that they own our political process (https://www.princeton.edu/~mgilens/idr.pdf).
Enough already.
To put it in words that business types can understand, please consider that this country is "owned" by its citizens, the majority of whom are neither rich executives nor business owners. We are the shareholders. We shareholders allow these businesses to operate on our shores. Why should we continue to allow the Pfizers of the world and their ilk to operate here? They're not creating shareholder value for us, the shareholders of the country. And isn't shareholder value the ultimate shining golden goal?
Why are the wage earners of this country satisfied to continue subsidizing the taxes of these corporations? They not only expect us to pay their taxes for them, they expect us to pay it out of the greatly diminished wages they deign to hand us from on high. And then we're also supposed to take for granted that they own our political process (https://www.princeton.edu/~mgilens/idr.pdf).
Enough already.
143
"Why should we continue to allow the Pfizers of the world and their ilk to operate here?"
You are certainly within your rights to forbid Pfizer or other companies to operate here, but why in the world would you want to? Would you like to live in a country where private corporations are forbidden to operate?
You are certainly within your rights to forbid Pfizer or other companies to operate here, but why in the world would you want to? Would you like to live in a country where private corporations are forbidden to operate?
And they don't even cotton to paying they're property taxes either. This company continually sues local municipalities in order to save what amounts to peanuts at the expense of everyone else, as they have to pay to defend the case and when the judge reduces their tax burden ( they love to 'split the baby') we pay again through refunding. And now they can't even part with their measily corporate tax which we will also subsidize. Talk about gaming the system!
United States Congress, the best government that money can buy?
60
This should be stopped once and for all. It just isn't right to make all that money in this country and not pay taxes.
27
The one thing we don't need, when we are running huge deficits, is having another very profitable mega corporation avoiding their fair share of taxes. This might be beneficial to their shareholders. But once again this proves that the people who make a great profit from commerce in the US are at odds with the welfare of the vast majority who only have to shoulder a greater share of the burden to keep our country running.
36
Maybe we should try spending less.
2
QED - do you mean spend less on the bloated, $598 billion dollar military budget? It might be a great place to start as it takes up about 54% of our nation's discretionary spending.
5
I forgot to say this....all CEOs of inverted companies should be invited to leave their passports at the door as they leave and they should leave.
213
Do that, and in addition to losing the companies, you lose the ability to tax the high income of the executives as well.
1
The legal precedent for this transfer of profit to low tax locations is built into our US internal tax system. That is why many of our multi-state operations incorporate in Delaware or Nevada and shift ownership of any intellectual properties to those states, charging their corporations in other (higher tax) states for their use. The objective purely and simply is to shift taxable profit.
The IRS or Congress do not object.
How can we rant against this happening on a global scale now, when we have for many years justified it here? Do a tour of Wilmington, if you doubt my word. Note that Delaware does not tax profits from charges for use of Delaware based intellectual properties when those charges are out or state. Ireland is merely copying what we permit here.
The IRS or Congress do not object.
How can we rant against this happening on a global scale now, when we have for many years justified it here? Do a tour of Wilmington, if you doubt my word. Note that Delaware does not tax profits from charges for use of Delaware based intellectual properties when those charges are out or state. Ireland is merely copying what we permit here.
2
Is there some reason you think this would change anything?
Inverted companies would just hire a non-American CEO, and their current American executives would get some other title -- the Vice President for North American Operations, perhaps -- with the same lavish compensation they currently receive.
Inverted companies would just hire a non-American CEO, and their current American executives would get some other title -- the Vice President for North American Operations, perhaps -- with the same lavish compensation they currently receive.
I must be out of the United States for 330 days per year to qualify as an ex-pat, meaning that I get credit for the taxes I pay here in Europe against my US tax bill.
Further: it is well known that the Bank of England requires the CEOs and executive committees of banks with London charters to spend the majority of their time *in* the UK, even if the majority of their revenue comes from overseas operations.
Why don't we have the same requirement for these execs? If Pfizer wants to become an Irish company, then its entire management team should be forced to relocate to Ireland and spend the same 330 days outside of the country as the rest of us ex-pats.
Let's see what that does to the inversion fad.
Further: it is well known that the Bank of England requires the CEOs and executive committees of banks with London charters to spend the majority of their time *in* the UK, even if the majority of their revenue comes from overseas operations.
Why don't we have the same requirement for these execs? If Pfizer wants to become an Irish company, then its entire management team should be forced to relocate to Ireland and spend the same 330 days outside of the country as the rest of us ex-pats.
Let's see what that does to the inversion fad.
289
Better yet make it against the law to do inversions.
35
Well you know, they keep on saying that America is the greatest nation on earth. I do not believe that and so do you. Crooks run wild under the facade of three piece suits.
Given an Irish friend's description of their weather as "torrential downpours with sunny spells", the out-of-country requirement would probably halt all "ex-pat" corporations.
If the average human engaged in the same actions, he or she would go to jail for tax evasion yes,sir, they would. Hey, I thought corporations were people too.
309
No, global corporations are not like individual people. They have multiple personas that are citizens (as corporations) in each country in which they have corporate presence. They can and will choose which of those multiple personas houses their worldwide headquarters. Since Washington DC is not (except in its imagination) ruler of the world, global corporations will move their world headquarters to any nation that offers the best tax advantage. We may not like to admit that, but those are the facts. Ireland lures them with bargain tax rates. No US tax law is enforceable in Ireland.
5
Incorrect. If you move from New York to Florida in retirement to avoid the state income tax burden - should you go to jail?
1
Actually, they wouldn't. As shameful as it may be, none of this is illegal.
We are a capitalist country. Capitalist give money and state their agenda through lobbyists . So what can congress do.
Who gives 2-3 billion dollars in presidential campaign? ? Capitalist. God bless America
Who gives 2-3 billion dollars in presidential campaign? ? Capitalist. God bless America
6
Unpatriotic highway robbery in broad daylight. And the executives who claim they'd not be competitive if they'd have to pay tax on profits are earning tens or hundreds of millions in executive pay, some or most of it via stock options, etc. which aren't taxed either.
Corporate profits and CEO/executive pay continue upward but workers’ wages are stagnant and benefit costs ever increasing. It’s outrageous that average Americans are subsidizing the 1% and their bosses.
Corporate profits and CEO/executive pay continue upward but workers’ wages are stagnant and benefit costs ever increasing. It’s outrageous that average Americans are subsidizing the 1% and their bosses.
122
Yes. The people with power are exploiting those without. Big surprise.
2
The American "political machine" has been, since the 1980s, robbing from the poor and giving to the rich. It is part of the decline of this great nation and a brainless electorate continues to elect the same robber barons. Leadership is from the same families (B Clinton=NAFTA) who will continue to give up their bodies, and ours, to the banks. If you think Pfizer is the first, you should check your pulse.
17
With Big Pharma's connections in Congress, pigs will fly before our elected representatives put an end to inversions.
80
This is what happens when our elected representatives only represent the rich.
Bernie Sanders is right, the system is rigged, corrupted and wrong,
Vote wisely.
Bernie Sanders is right, the system is rigged, corrupted and wrong,
Vote wisely.
373
If a majority realized how important voting is to their own welfare, maybe we could get a turnout rate greater than the 40% we currently enjoy. So I would add to your comment not only to vote wisely but to go out and vote at all. And, encourage the people around you to vote as well.
12
Like last time? It's a system that can't be changed because we don't really want to change it. Americans believe in power - that if you are at the top, then you must deserve it.
1
First look at the politician's legislation record, the bills coauthored, and add to that the voting record. What has he/she done for us as taxpayers and our representatives in the state and in the federal government? What have they done for we the people of this country if they're not politicians?
By all means Vote!
By all means Vote!
2
Seems to me the real fix is to update the tax laws.
A corporation is a sociopath. It will do whatever it can to maximize shareholder value. A management focused on anything else will quickly be replaced.
A corporation is a sociopath. It will do whatever it can to maximize shareholder value. A management focused on anything else will quickly be replaced.
86
A vote for Sanders may or may not help but a vote for any of the others will do nothing for sure.
73
They can pay a 100% Tax on all US earnings.
The american worker pays for the roads that these companies products are delivered on. The fire and police departments that protect these businesses.Our children fight and die to keep this country a democracy so they can reap their profits. It is time to rethink Corporations and their charters.Tax avoidance,fraud and environmental damage seams to be the only way they can make it nowadays.
The american worker pays for the roads that these companies products are delivered on. The fire and police departments that protect these businesses.Our children fight and die to keep this country a democracy so they can reap their profits. It is time to rethink Corporations and their charters.Tax avoidance,fraud and environmental damage seams to be the only way they can make it nowadays.
242
When the US writes foolish tax laws including having one of the highest corporate taxes in the world, deals like Pfizer are the result. Blame your legislators.
2
"They can pay a 100% Tax on all US earnings."
In other words, you want their US earnings after taxes to be zero. Then the companies will simply decide there is no reason for them to operate in the U.S. (since they can;t earn anything from it). Would you like this result?
In other words, you want their US earnings after taxes to be zero. Then the companies will simply decide there is no reason for them to operate in the U.S. (since they can;t earn anything from it). Would you like this result?
2
Skeptical - if they stopped doing business here, their sacrosanct profits would tank. Would they like this result?
1
The tax code is the tax code. You suffer with it, you use it to your advantage. Again, government never happy with its stupidness. Soon Apple will take action like Pfizer. According to The Times anything that stops the government from getting your last dollar is evil.
8
With all due respect, sir, you are a patsy. You are picking up the tab for these tax evaders and you are paying their R&D besides.
165
Justice Holmes, you must be referring to this passage:
"Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health."
This is a down right lie. The research performed at the NIH is only high-risk in the sense that it might fail. It is not particularly expensive. Drug development, i.e., doing the trials mandated by the FDA to get a label, is both risky and extremely expensive - on the order of a billion dollars. You are the patsy here, taking the Leftist fantasy spewed by the NYT hook, line, and sinker.
"Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health."
This is a down right lie. The research performed at the NIH is only high-risk in the sense that it might fail. It is not particularly expensive. Drug development, i.e., doing the trials mandated by the FDA to get a label, is both risky and extremely expensive - on the order of a billion dollars. You are the patsy here, taking the Leftist fantasy spewed by the NYT hook, line, and sinker.
1
Taxes pay for roads, police officers, fire fighters, schools, teachers, wars, elected officials, to mention but a few things.
Why do you think it's "evil" to expect uber-wealthy individuals and corporations to pay their fair share for these services?
Why do you think it's "evil" to expect uber-wealthy individuals and corporations to pay their fair share for these services?
21
th reason these mergers are legal is bc rich corporations write th laws
if th poor wrote th laws, armed robbery would be legal
if th poor wrote th laws, armed robbery would be legal
9
Just because you're poor doesn't mean you're an armed robber.
10
So the Times wants to eliminate those components of present insanely intricate and distorted US tax structures that would reduce the ability of a "progressive" administration and Congress to maximize tax revenues, while professing an allegiance to fair markets, free trade and a level playing field in taxation. Great world where you can have your cake and eat it.
6
No, all NYT and most of its readers want is balance -- a golden mean. I want to stop paying Big Pharma $600 for 30 pills every month (not even unusual these days) when I also paid for the R&D to develop the pill, the highways and airports used to transport the pills and used to move the pill pushers around the country hawking the pills. I want shareholders to take the true risks associated with gambling.
92
Nytimes and it's readers want to keep things the way they are because it's based on a primitive version of meritocracy: to the strongest, boldest, and most cunning go the spoils. If we didn't in fact believe that, we wouldn't let anyone get away with it. The pathetic thing is that the reason we like the competition-based reward system is that every sap in the country has a secret plan, or, at least, a desire, to make it rich and be one of them.
1
I agree.
But the sad fact and problem is, that they would not be gambling. They would horde.
But the sad fact and problem is, that they would not be gambling. They would horde.