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BigCorp, ing America, the environment, and Americans at every turn.
With $160 Billion Merger, Pfizer Moves To Ireland and Dodges Taxes
In a $160 billion dollar acquisition, drug company Allergan, a small company based in Ireland, "purchased" Pfizer, allowing the drug producing giant to move to Ireland and lower its tax rate from about 25 percent to 17-18 percent. Ars reports: "Such inversions, which are said to cost the American government billions in lost tax revenue, have drawn scorn from the Obama Administration and the Treasury Department. Last year, President Obama referred to the deals as 'unpatriotic' loopholes and proposed to close them. And last week, the Treasury announced new rules to make such deals more difficult. But Pfizer’s reverse-inversion skirts the rules, in part by keeping ownership split somewhat evenly between the two companies. After the deal is complete, current shareholders of Allergan, which has the majority of its operations in the US, will own 44 percent of the mega company. The remaining 56 percent will be owned by current Pfizer shareholders."
BigCorp, ing America, the environment, and Americans at every turn.
Trump will take care of this once and for all!
Why don't companies stay here and pay higher taxes?
I forgot its our "patriotic" duty to pay taxes. If its legal, I'm fine with it. Otherwise, simplify the tax code and close the loopholes.
Like I keep saying.
We should move from a production based tax system to a consumption based tax. Such BS wouldn't be happening.
And how would that work for Pfizer? They would be taxed solely on the cost of goods sold?
Sounds like the FairTax. I'd be good with that. The rich would pay more since they spend more. Plus it encourages saving money for those in poverty.
If you're really poor, you don't have enough money to make ends meet, much less "saving"... not to mention that if they're paying with foodstamps, WIC, etc they're not really paying the tax...
As far as the rich, they can simply purchase anything really expensive as a business expense and take depreciation deductions to make up the difference.
That's why regressive taxes like that really hurt the poor much more than they do the rich.
That's not to say that a simplified tax code isn't a good idea. That's something that should definitely happen.
isn't sales tax a consumption-based tax? rich people pay a lot lower percentage of their income on sales tax than poor people do since poor people have to spend all of their money.
I don't understand how a consumption tax is supposed to get the middle and lower classes to start consuming again.
why do you hate america?
because teh gheys can marry
How about a "sending-your-company-and/or-jobs-overseas-so-you-can-avoid-taxes" tax?
That would be too easy....
Except there wouldn't be business deductions.
And with the fairtax the government would put every single american on the dole up to 40k.
But don't let the facts faze you.
And I don't even think the fairtax is a good idea. Just lower taxes. Everything else still funds the empire.
And the poor and middle class are never going to start spending again until the banks stop stealing their money (purchasing power). Good luck with that.
There's a dozen "fair tax" proposals out there. None of the ones I've seen eliminate deductions for business expenses. All I've seen is getting rid of personal deductions, AFAIK.
And count me amongst the skeptics when it comes to implementing a tax code with no loopholes for the rich and well connected. Especially after Citizen's United, etc...
Consuming things is fine. Spending on things that can't be afford while taking out loans is not. A straight consumption tax would encourage savings, one would hope. But people would have more to spend in the first place as all other taxes could be cut. There is no perfect answer unfortunately.
It would be a straight consumption tax with no variable rates. all classes would pay the same sales tax rate. Rich would pay more as they buy more expensive stuff in greater quan y. The poor would pay less as they should be buying less expensive items and lower quani ies. People would have more to spend with other taxes thrown out the window.
iow, you're full of .
Read the book.
the US tax code is egregiously rigged by BigCorp, BigFinance, 1% to enrich themselves. Their s in Congress will block any dramatic changes that don't enrich themselves further.
Global Tax Dodging Just One Part of Pfizer’s Corrupt Business Model
There’s plenty that doesn’t add up about Pfizer’s claim that the low Irish tax rates it will pay by merging with Allergan are necessary if the company is to fund drug research to stay compe ive. Consider that while the pharmaceutical giant was provisioning $2.2 billion for income taxes over the first nine months of this year, it was distributing five times as much – $11.4 billion – to its shareholders, $6.2 billion in stock buybacks and $5.2 billion in dividends. That was 159 percent of its profits over these three quarters.
And for Pfizer such mind-numbing distributions to shareholders are nothing new. The company has been piling stock buybacks on top of dividends since 1985. From January 2001 through September 2015, Pfizer paid out $95.5 billion in buybacks and $87.1 billion in dividends, representing 117 percent of its net income.
Meanwhile, it booked $37.1 billion in corporate income taxes to the IRS.
Yet in a Wall Street Journal interview in October, to forestall the public criticism of corporate flight that was bound to come with the upcoming Pfizer-Allergan merger announcement, Pfizer CEO Ian C. Read moaned that its U.S. tax bill puts the company at a “tremendous disadvantage” in global compe ion. “We’re fighting,” Read said in the interview, “with one hand tied behind our back.”
When one looks at Pfizer’s gargantuan distributions to shareholders, however, it is obvious that if Read can’t make use of both hands to secure innovation finance, it is not Uncle Sam who tied the knot.
Let’s look at how Pfizer generates the profits that support its mega-distributions to shareholders and its stock-price performance.
Over the past 15 years, Pfizer’s growth has been driven by three major acquisitions: Warner-Lambert in 2000, Pharmacia in 2003, and Wyeth in 2009, each one bringing with it a number of blockbuster drugs. The most lucrative by far has been Lipitor – already a huge blockbuster at Warner-Lambert when Pfizer acquired that company in 2000 – ringing up an annual average of $11.0 billion in sales from 2000 through 2011. But the Lipitor patent expired in 2010, and by 2014 its revenues had fallen to $2.1 billion, although it was still the fifth-best seller among Pfizer’s products.
Pfizer is on the prowl for new blockbusters to fund its buyback habit. In 2014 AstraZeneca, the British-Swedish drug maker with strong sales in cancer drugs, rebuffed Pfizer’s takeover attempt. Now Pfizer has struck gold with Allergan, which owns the mega-seller Botox.
With Read as CEO, R&D spending has declined compared with the previous 15 years.
Whatever its recorded R&D spending, however, Pfizer has long since lost the capability to generate its own drug products. Since 2001 the company has launched only four internally developed products, the last one in 2005. In 2010 sales of these four products totaled $3.7 billion, but, in part because of expiration of patents on two of the drugs, by 2014 these revenues had slumped to $1.3 billion.
, Pfizer, along with many other U.S. pharmaceutical companies, has been aggressively jacking up drug prices even more,
Yet whenever Congress has questioned the high prices, major U.S. drug companies say that they need the hefty profit margins to fund more R&D expenditures. For Pfizer, that argument may have held some water back in the ’80s.
But for the past three decades Pfizer has been using its profits to enrich shareholders. U.S. taxpayers pay extortionate prices for indispensible pharmaceutical drugs so that companies like Pfizer, Merck, and J&J can do billions of dollars in buybacks every year to manipulate their companies’ stock prices. And top executives get paid many millions for this financial engineering.
It gets worse. As the drug companies hold U.S. households hostage in our need to consume their products, taxpayers hand over massive amounts of hard-earned pay to support the drug companies’ R&D efforts.
From 1938 through 2014, the National Ins utes of Health (NIH) spent a total of $927 billion in 2014 dollars on life sciences research, and this year the NIH budget is over $30 billion— funded by taxpayers. Drug companies benefit from all sorts of other protections and subsidies, including those under the Orphan Drug Act of 1983. In Pfizer’s case, Lipitor, its most profitable drug to date, and Botox, its new shareholder-value enhancing therapy, both originated as orphan drugs
Since 2010, Pfizer’s annual sales have plunged by about $20 billion and its employment by more than 40,000 people. But Pfizer’s Read-era profit margins are at a record high for the company while Pfizer’s stock price has soared. If increasing its stock price is Pfizer’s raison d’être, then the allocation of more than 100 percent of profits to “enhancing shareholder value” through buybacks and dividends has worked – but at a huge cost to American innovation, employment, and income distribution.
http://www.nakedcapitalism.com/2015/...+capitalism%29
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