I've been writing about U.S. corporations legally relocating to another nation to avoid paying taxes here in the United States for some time now (which you can read about here, here, here, here, here, and here).
Well, guess what? U.S. pharmaceutical giant Pfizer has effectively fled from the U.S. to avoid paying their fair share of taxes. They've done this through a complex corporate inversion-merger deal. From Nation of Change we get "Drug Makers Add Insult to Injury" ...
It’s one thing for Pfizer to renounce its U.S. citizenship, moving its official residence to Dublin, Ireland, as a tax dodge — all the while continuing to run the business in the United States. That disgusting tactic happens to be disgustingly legal, thanks to our indolent Congress and its failure to fix the corporate tax laws.
It’s quite another to insult the public with blatant phoniness that avoiding billions in U.S. taxes gives the company “the strength to research, discover and deliver more medicines and therapies to more people around the world.” Those are the words of Pfizer’s chief executive, Ian Read, an accountant by training.
The Pfizer deal involves a merger with a much smaller Allergan, an Ireland-based company that happens to do its business in New Jersey. Wall Street analysts scoffed at the notion that the deal had any purpose other than to let the company avoid billions in U.S. taxes --billions that other American taxpayers will have to replace.
Since Read took the helm in 2010, Pfizer has slashed its research and development budget.
We assume the company will expect the United States to continue subsidizing research through the taxpayer-supported National Institutes of Health. We assume it wants the U.S. government to continue defending its intellectual property rights.
Pfizer made headlines more than a decade ago when it persuaded the city of New London, Conn., to use eminent domain to seize a working-class neighborhood around its shiny new headquarters — and replace it with an upscale shopping, hotel and office complex more to the company’s liking.
The Supreme Court gave the controversial plan a green light in 2005. Four years later, Pfizer abandoned New London.
Yes, the drugmakers know how to make government work for them.
The drugmakers’ crowning achievement was getting a Republican-controlled Congress to write a Medicare drug benefit law to their specifications. While funneling billions in taxpayer subsidies toward helping the elderly buy drugs, it forbade the U.S. government to negotiate the prices on behalf of said taxpayers.
No other Western country lets drug companies charge whatever they think they can get away with.
These conversations always circle back to the drugmakers’ argument that Americans must pay their price to cover the high expense of developing wonderful life-enhancing products.
The drugmakers don’t talk much about that publicly for a very simple reason. It is not in the interests of their executives and investors to stop Americans from playing the chump. If they can get the job done by writing checks to obedient U.S. politicians and the chumps keep re-electing them, why make trouble for themselves?
Read may have reason to take the American public for easily deceived children.
Basic decency, however, demands that he limit such thoughts to private dinner parties.
Pfizer's move will probably save the company about $21 billion in taxes. The move will also help reduce the company's reported effective tax rate from 26 percent to as little as 17 percent.
Kudos to John for the Pfizer tip.
Kudos to John for the Pfizer tip.