With $160 Billion Merger, Pfizer Moves To Ireland and Dodges Taxes (arstechnica.com) 365
ourlovecanlastforeve writes: 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."
Novel Idea (Score:3, Insightful)
What do you do (Score:5, Insightful)
See, this is what's called a "Race to the Bottom". The correct response is to tell Phizer: Thanks, and by. Then you slap a 50% tarriff on their drugs and enforce strict price controls. If that doesn't work you take their patents from them. If they stop "innovating" then fine. We hire folks to innovate in their place and tell them to go pound sand. What you do _not_ do is let them control negotiations and play their game. You will lose sir.
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Do you think skilled scientists and engineers work just because you snap your fingers?
No, people with your views will lose, because your views are simply untenable.
No, what it is called is "labor mobility" and "competitiveness". That means, in the end, governm
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Do you think skilled scientists and engineers work just because you snap your fingers?
No, they work because they want money, and possibly also because they enjoy their profession. So, you make research grants, you pay them to work, and with a little luck you have innovation. You don't need Pfizer to make that work.
No, what it is called is "labor mobility" and "competitiveness". That means, in the end, governments do not get to set the rules and cannot force people to work or invest under conditions that they don't like.
No, it's called "taking advantage of our society for their profit". It's like using H1-B workers to make American profits using foreign labor prices.
That doesn't work (Score:5, Informative)
Also for medical care you're not really free to make choices. For one thing without 6-10 years of study you don't really have enough information. For another thing if you have cancer and need chemo you're not exactly free to say no. This is a classic mistake folks make. You're comparing the decision making processes of buying a twinkie to the process of buying a heart transplant. While you might technically be 'buying' both, the processes are really nothing alike, and frankly you wouldn't want them to be.
Tax rates can be negative if the money comes somewhere else. Think of a retailer running scams. He doesn't scam his big clients because they will sue him or send thugs around to hurt him and his family. So he scams his little clients. Basically you and I pay our taxes so the big guys that own everything can own everything.
Now, I can already here you railing against taxes again so I'll say this: It's OK to pay taxes (render unto Caesar, yadda, yadda, yadda) , as long as you're getting something for it. What I hate about being an American is that I pay about the same a Europeans but without the free health care, social safety net and economic policies that raise my wages...
Re:That doesn't work (Score:5, Interesting)
Tax rates can be negative if the money comes somewhere else.
And there you have your answer. Tax something that cannot leave the country, like land. Tax the income of employees and management who physically live in your country. Tax sales of products that occur in your country. There are plenty of things to tax which make far more sense than corporate taxes.
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We would then be a favorable place to have business
The regulations are atrocious too. A sane tax rate is only part of the picture.
It's OK, though - all the multinationals will soon be overseas companies and all the small businesses incorporated here will be hamstrung trying to compete uphill against their size, their tax advantage, and their regulatory advantage, and the fat cats and the DC politicians they own will all be perfectly content.
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I hear this from Fox News drones all the time. I run a business, and I'm not familiar with any of these burdensome regulations. Care to be more specific?
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Top 20 Burdensome Regulations on Business According to Heritage Foundation [heritage.org]
It looks pretty horrific. It has terrible things in it like providing healthcare and taking care of the environment.
Healthcare for employees
Bank Fees on Debit cards
Credit Card Regulation
Mandated Energy Efficiency (No more incandescent light bulbs)
CAFE Standards
EPA Environmental Standards
Climate Change CO2 Legislation
Community Reinvestment Mandates
Financial Transparency Sarbanes-Oxley
Network Neutrality
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How about we just lower our tax rate to 15%
That would be a start, but element #2 is not taxing US corporations on income earned outside the US (that income is already taxed by foreign localities). Every other country in the world operates on taxing corporations on income generated in their country, perhaps the US should join everyone else...
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Foreign taxes can be credited against your US tax. So you don't pay "double". You just end up paying the greater of. Additionally, you only get taxed on the profits you recognize in the US company. So if you sell a widget to China using the YouCompany@China, then that company pays the Chinese tax. And when that company sends the profits to the US "owner" company, then the US company pays the taxes minus the tax amount paid on it in China.
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This isn't true. Foreign taxes are either excludable or deductible.
Not always. At least that's what the IRS claims [irs.gov], and they're the ones who will try to collect that tax.
This would level the playing ground (Score:2)
15% Flat rate would level playing ground and make it equal for both individuals, corporations both large and small.
Reality is that Corporations dont like of competition, because middle class is paying upwards of 48% marginal tax (state plus federal plus medicaid/medicare etc).
Re:This would level the playing ground (Score:5, Insightful)
Rich people don't want their taxes to go up to 15%.
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Why does the Tax Foundation leave out payroll taxes? That's the question you need to ask yourself.
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Of their adjusted income. The middle/working class get to make vastly fewer "adjustments".
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I suppose that deductions for dressage horses and yachts are technically available to middle/working class people, except middle/working class people don't own dressage horses and yachts. So, it's fair to say that these deductions have been designed and implemented to benefit the rich.
I think you're just being disingenuous now. You're dismissed.
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How about we just all just take a pay cut at our jobs and tithe 60% of our incomes to corporations to pay for their use of the commons so they will still love us and not run away like daddy did?
Re:Novel Idea (Score:5, Informative)
And the effective corporate tax rate in the US is about 12%
http://money.cnn.com/2013/07/0... [cnn.com]
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Yeah that counts Obama's subsidiary, GM, paying 0%. And Warren Buffet's trains, paying very little, while they build America, carrying that oil that will never be on the Keystone pipeline. And other guys like them, making the majority of the money that 12% is a percent of.
On the other side of that 12%, you have your Mom & Pop, trying to do their own taxes on paper, paying closer to 35%. And Pfizer, who, per the article, could apparently do no better than 25%.
25% on all profits, worldwide. That's after t
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Mom and Pop are sole proprieters. They're paying personal income tax, just like you and me.
Forbid Medicare and Medicaid payments (Score:5, Insightful)
Forbid Medicare and Medicaid payments to companies that choose to move headquarters for the purpose of avoiding US tax. Maybe that will cause them to change their mind.
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be sneakier about it
REQUIRE X percent of the production in each category to be earmarked for Medicare/Medicaid/VA use but give a credit at say 80% for tax paid.
Soft Power (Score:5, Insightful)
Forbid Medicare and Medicaid payments to companies that choose to move headquarters for the purpose of avoiding US tax. Maybe that will cause them to change their mind.
You're thinking too small and you're risking a lot of lives. Don't forbid the payments; threaten the underlying patents.
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And when Europe decides to ignore a whole lot of American drug patents in return?
The reason the WTO exists is to try and avoid tit-for-tat trade wars like what you're suggesting. Ultimately they make everyone poorer.
The US has an uncompetitive tax system for corporations. It's not even about the rate, it's about the fact that they're double taxed on worldwide income, something no other country does. Instead of coming up with creative ways to try and "punish" people who develop life saving drugs for getting
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You mean not reimburse Pfizer drugs through Medicare and Medicaid? Sounds like a good idea to me. Medicare and Medicaid should only reimburse generics anyway.
Time for a policy shift (Score:5, Insightful)
Dude - great sig! (Score:2)
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
That's the best sig I've seen in quite awhile.
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And we still can't import prescription drugs (Score:4, Informative)
This is pretty bold (not really the right word) of Pfizer to move overseas, considering that they, along with the rest of big Pharma are the ones who lobbied to make it illegal for Americans to import cheaper prescription drugs. Maybe Pfizer should be required to sell their drugs in the USA for the price they charge in Ireland.
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This is pretty bold (not really the right word) of Pfizer to move overseas, considering that they, along with the rest of big Pharma are the ones who lobbied to make it illegal for Americans to import cheaper prescription drugs.
I think the word you're looking for is 'chutzpah'. [wikipedia.org]
Politicians will feign helplessness (look at the issues they're able to reach consensus on, and those they're not). If a bill to change it ever came up, poison pills would be attached to it. A few academics will claim this sort of thing is an inexorable force of nature, and the farce will continue.
Gotta understand the decision-making process (Score:5, Insightful)
Gotta understand the decision-making process for politicians:
1) These companies are big donors.
2) 90% percent of the population has no idea about this [bloombergview.com], and fewer care.
3) Politicians get cash for looking the other way, and it has no impact on their electability. [opensecrets.org]
I started following these kinds of shenanigans prior to the financial crisis. The blame is on the politicians - not for being self interested, but for actually undermining the society for cash and favors from big donors. The vast majority of the voting public doesn't understand this kind of inside baseball. And the incumbency rate hasn't really changed much as a result of these issues. So the boiling of the frog (this society) will continue until we become Brazil or we snap out of the torpor.
"A society cannot be both ignorant and free." -- Lady Gaga
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"A society cannot be both ignorant and free." -- Lady Gaga
What?
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What "decisions" by politicians do you think were involved in this? It's always been legal in the West for people to move their businesses to other countries if they thought they got a better deal. Politicians didn't need to be bribed to enable this.
Many of them are still smart enough to know that trying to intervene would be a really bad idea. Some even realize that the proper response is to lower tax rates in the US, to match the lower tax rates
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Politicians write these rules - they are legislators. Here is a a history of the tax inversion. [bloombergview.com]
"About 51 U.S. companies have reincorporated in low-tax countries since 1982, including 20 since 2012. A lot of drug companies are doing it, and low-tax Ireland is a popular corporate home. They’re doing it despite a 2004 law that legislators had promised would end the practice, despite rule-tightening by the Obama administration to limit it, and despite two decades of efforts by the Internal Revenue Servic
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What rules? You just confirmed that there never have been rules restricting these kinds of deals. You merely want them to write such rules in the future, on your (mistaken) belief that somehow they help the US.
If you raise the operating costs of US companies through taxation or regulation, they are going to become uncompetitive. The only option they have is to leave for places where they can be competitive again. If you prevent them from leaving, they'll
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In this case, "these kinds of shenanigans" that have the politicians "looking the other way" are entirely within the rules. The companies are following the rules.
Patent reform can fix this problem (Score:2)
We can fix this problem and get patent reform at the same time.
After 3 years, patents issued to foreign based or owned companies can't be enforced against US owned companies making products in the US that utilize them. Patents issued to American owned companies using the patent to make a product in the US can enforce them for the normal time against anyone.
This solves the problem with obnoxious multi-nationals hoarding patents by making them only useful for a very short time. It discourages US companies f
Reinvestment ? (Score:2)
doing what is in their best interest (Score:2)
yes, revise the U.S. tax code - like politicians will ever do that ...
a less knee jerk/punish big corporations perspective in the WSJ [wsj.com]:
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America should be punished for having such a ridiculous tax code and a confiscatory corporate tax rate. I'd also move my operation to Ireland if I could.
What's stopping you?
Re:Good! (Score:4, Insightful)
Perhaps, the lack of one to move.
The IRS keeps its hooks in US citizens who leave. (Score:3)
I'd also move my operation to Ireland if I could.
What's stopping you?
The US tax code. The US keeps its hooks in its citizens and companies, for decades, if they try to leave, even if they move out and renounce their citizenship.
The US does this to a far greater extent than other countries who generally don't tax their citizens if they're out of the country for more than half a year. (This is where "The Jet Set" came from: Citizens of various non-US countries who had found a way to earn a living that let
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You can renounce citizenship, that solves the tax problem.
But for these corporations, they're not really leaving the US. They're just moving papers overseas. The CEOs are not uprooting their families and immigrating to somewhere else. It's only that the new parent company is in Ireland, a sleight of hand with the taxes.
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Citation? Because I don't think it works like that. I think that you get taxed on unrealized (and hence untaxed) gains, but you also get to deduct the first $600k. This also applies to green card holders who leave the USA.
Re:The IRS keeps its hooks in US citizens who leav (Score:4, Informative)
1. The $2M sum is only a test for eligibility.
2. Tax is payable on unrealized gains, not total assets:
There is a $680k deduction, which is unrelated to any primary residence:
Re:The IRS keeps its hooks in US citizens who leav (Score:5, Interesting)
1. Take your total worldwide net worth at fair market value as if all your assets were sold the day before your expatriation date.
2. Subtract your total worldwide cost basis from your net worth. The result is your total gain from your mark-to-market "deemed sale."
3. Subtract $690,000 (tax year 2015, adjusted annually for inflation) from your total gain. The result is your total taxable gain. If your total taxable gain is zero or negative, stop: you do not owe any Expatriation Tax.
4. Otherwise, pay ordinary capital gains tax rates on your total taxable gain, with a current top marginal tax rate of 23.8% (if the NIIT applies, and I'm not sure it does, but let's assume that). This is your total U.S. Expatriation Tax.
If you owe Expatriation Tax your cost basis is reset. Any subsequent capital gains on U.S. assets will only be taxed based on your new, reset cost basis. Note that "wash sale" rules do not apply when making the Expatriation Tax calculation, so deemed sale capital losses are not limited within the calculation. To some degree you can pay your Expatriation Tax in installments if you wish and only pay statutory interest on deferred payments (currently 3%). If your assets are generating a higher after-tax rate of return (quite likely) then stretching out your Expatriation Tax payment to the maximum extent allowed by law is a good idea. You may also wish to stretch out your Expatriation Tax payments if you prefer to raise funds more slowly, perhaps as in the form of interest, dividends, royalties, and/or earned income.
The U.S. Expatriation Tax is not a hardship by any reasonable definition of hardship, and it's quite disingenuous to complain about not getting a $250,000 capital gains exclusion on a home when you're getting a $690,000 blanket exclusion. But if it were a hardship, there's a simple, 100% effective solution to avoid the U.S. Expatriation Tax: don't renounce or relinquish U.S. citizenship.
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Nurse! He's off his meds! Security!
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its not a "loophole" its the law, and until the law is favorable to business, business will continue to move to places that are business friendly. We see it on a microscale in the USA as it is, look at all the companies who are based in delaware.
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until our politicians wake up and realize all costs are pushed onto the consumer anyway nothing will change
They know already, and don't care. They count on the average person not knowing that.
Delaware corporations pay taxes in other states (Score:3)
until our politicians wake up and realize all costs are pushed onto the consumer anyway nothing will change
its not a "loophole" its the law, and until the law is favorable to business, business will continue to move to places that are business friendly. We see it on a microscale in the USA as it is, look at all the companies who are based in delaware.
Delaware is only for corporate law adjudication. Taxes are still collected for revenue or operations in other states (i.e., if you have a footprint or customers there, you still pay).
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Re:Good! (Score:4, Insightful)
Pfizer makes 60% of it's revenue outside the US. Why should they pay US taxes on profits earned entirely outside the US? Other countries do not tax foreign profits the way the US does.
Obviously Pfizer doesn't think they should be subject to such an unfair system. They found a way out. They will still pay US tax on US profits.
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No. See, what they do is they "sell" all their patents to an Irish division of the company. That makes all the revenue they get from the US, "Irish profits".
Do you believe that only 30% of Apple's profits are from US sales? Do you really believe that?
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What percentage of Apple's profits did the US government earn?
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What percentage of Apple's profits did the US government earn?
According to many on the political left - all of it.
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How often did Apple employees use U.S. roads, rely on U.S. public education for their children in primary school or college, drink water provided by the state or federal government, use telephone or network infrastructure developed and constructed by the government, benefit from federal safety regulations on aircraft? Do you think all those things appear for your benefit at no cost or obligation from you?
There's a fuel tax to pay for roads.
There's a property tax and a state income tax and a state sales tax to pay for education for children.
There's a state income tax and a state sales tax and tuition to pay for colleges.
There's a water bill from the water district every 2 months to pay for water.
There's a telephone bill and a special telephone tax to pay for phones, and an internet bill to pay for Internet.
There's an airline ticket tax to pay for air traffic control.
But the question was: what percentage of A
Re: Good! (Score:4, Insightful)
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Why do they get to "choose"? You and I don't get to choose, and corporations are people, my friend. Right?
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Seattle Times [seattletimes.com]. Key phrase: "Inverted corporations must still pay U.S. taxes on the profits they earn in the U.S." But read the story for more info.
Also lmgtfy [lmgtfy.com].
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Source to that last point that they pay tax on US profits?
I'm sure they will happily pay tax on any profits they have left after they pay their foreign subsidiary based in Ireland all the management and consulting fees, deduct the inflated research and development expenses, and sales and marketing campaign subcontracts, and extra profit surcharges...
They're altering the deal. Pray they don't alter it any further.
If you ask nicely, they may throw in the floor mats.... Or not...
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That's why it's called "unpatriotic", companies who care more about profits than their country or their workers.
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Why should Pfizer "care about" the US? Does the US "care about" Pfizer?
Is there a basis for a mutually friendly relationship (or any other kind of "warm" or "good" relationship) between the US and Pfizer? If so, please explain what this relationship could be based on.
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Well based upon citizenship. If they don't like the duties that comes from citizenship then they can move away and renounce it. They're already getting a marvelous deal in the US, they're rich and pay a much smaller percentage of their income in taxes than their workers do. "Pfizer" is really people, share holders and executives. You may think a corporation is just an amoral automaton but there are real people making the decisions who are quite happy to accept all the benefits that come from their fello
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Well based upon citizenship. If they don't like the duties that comes from citizenship then they can move away and renounce it.
They are trying to move away. That's what this article is about.
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Have you seen the treaties that Pfizer and the other drug companies have written and are having America push on us (us being various other countries). How much extra profits will these various free trade deals give to Pfizer? I know here in Canada drug prices are supposed to go way up due to the TPP while our freedoms will once again go down.
America has many aircraft carriers with which it practices gunboat diplomacy for the benefit of these companies.
Re: Good! (Score:2, Informative)
What's wrong with corporations making and keeping profit? Do you really believe the government inherently spends that money better? But that's a bad argument on my behalf because the government gets their cut eventually: those corporate profits have to be taken as income in one form or another eventually for them to be any good to anyone. That means any of these: bonuses, dividends, investment in the company and hiring.
Every one of those options directly benefit society through the exact same tax plus
Re: Good! (Score:2, Insightful)
The poster is totally right. Think of how much larger the benefits brought to the world by the likes of Union Carbide, Metropolitan Edison, TEPCO, Triangle Shirtwiast, Kader Toy, and Aurul would have been if only freed from pesky government crap like taxes.
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"A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but that money must come from somewhere: from reduced returns to investors in the company, lower wages to its workers, or higher prices that consumers pay for the products the company produces." [CBO report "THE INCIDENCE OF THE CORPORATE INCOME TAX"]
This report goes on to say:
Although economists are far from a consensus about exactly
who bears how much of the burden of the corporate income tax, the ex
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Pfizer was here and paying taxes. Now they are not here and won't be paying taxes.
What policy exactly would prevent that?
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He's right. The blaming Reagan is wearing kinda thin after all these years.
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'Reagan' is just a shortcut for 'Supply-side economics'. Reagan happened to be the politician that pushed it through the first time. Of course, it was always a think-tank generated pile of crap intended to put a gloss of 'economic science' on a political movement to end progressive taxation. The theory behind the Laffer curve couldn't be disproved on its face, except by trying it. But now that it's been tried and tried again, it's been proven that lowering taxes does not pay for itself in terms of incre
Re: Good! (Score:5, Informative)
Exactly! The only way to fix this problem is by taxing the products when they enter the country. It's ridiculous to allow corporations to hide billions overseas.
Re: Good! (Score:5, Insightful)
The only way to fix this problem is by taxing the products when they enter the country.
Except we have treaties that forbid us from doing that. If we violate trade agreements, other countries will retaliate, and the world economy will spiral downward. For an example of this scenario actually happening, Google for "The Great Depression".
It's ridiculous to allow corporations to hide billions overseas.
It is ridiculous for America to tax profits on a product made in England and sold in France. It is ridiculous to have absurd tax laws that encourage companies to move jobs overseas. We should tax domestic sales, or domestic revenue, or domestic payrolls, or even domestic profits. But instead we tax worldwide profits, of only companies domiciled in America, giving them a huge incentive to go elsewhere. No other country has a tax like that. It is economic self-sabotage.
Re: Good! (Score:5, Insightful)
You can't easily define "domestic" versus "worldwide" profits. Profits come from more than just sales. What we have is essentially income tax for corporations. If I earn money overseas and am not taxed by a foreign entity then I have to pay taxes on it here. For individuals this means you can't use the loophole that you were paid in a different country even though you lived in the US (yes this is slightly broken as it applies even to ex-pats who have not renounced citizenship). So it's essentially the same rule should apply for corporations - if you want to be called a "US company" then you need to pay US tax rates. If the companies don't like it then they can take their headquarters and move it overseas also, since they've long since moved all their actual workers overseas.
Note also that this company is going to pay taxes in Ireland. Not in high tax parts of Europe. They chose Ireland specifically because it's a low tax state trying to attract more companies, not because the US is the one and only undesirable tax location. The US has a much better corporate tax deal than many other countries, it's just not the minimum that the major shareholders want.
But it's the US. Poor people have to pay taxes, rich people have access to loopholes. That's why it's unpatriotic, because it shirks the shared responsibility that is a part of being a citizen. If taxes are too high, then this is a problem that should be fixed across the board and not just for mega corporations.
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You can't easily define "domestic" versus "worldwide" profits.
Yet every other country in the world manages to do it. Only America taxes extraterritorial profits.
if you want to be called a "US company" then you need to pay US tax rates.
You are missing the point. Pfizer does NOT want to be called a "US Company". They want to be an Irish company.
If the companies don't like it then they can take their headquarters and move it overseas
You are missing the point even more. TFA, and Obama's rants, make the point that companies should NOT be able to move away. There is a movement to erect a Berlin Wall for businesses. Many businesses, like Pfizer, and getting out while they can, and taking their HQ jobs with them.
Re: Good! (Score:4, Interesting)
Then Pfizer should move to Ireland. All executives should live there. The headquarters should be there. The only thing in the US that should remain is their foreign sales office. But they're going to play the games on paper, they'll keep the big executives here but claim that they're just part of a subsidiary of Pfizer. So no one is actually leaving, jobs aren't shuffling around except for a few management reorgs, it's business as usual but with a lower tax rate.
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It's ridiculous to allow corporations to hide billions overseas.
Quid pro quo...
Re: Good! (Score:5, Interesting)
Invalidating their drug patents and contracting another drug maker to start manufacturing their portfolio as generics would do the job much better. You would probably only have to do it once and that would fix the problem for a decade until another evil gang of corporate sociopaths tried it again.
Re: Good! (Score:4, Insightful)
Invalidating their drug patents and contracting another drug maker to start manufacturing their portfolio as generics would do the job much better.
Then the flow of companies and jobs leaving America will turn into a torrent. You don't encourage people to stay by building higher walls and becoming more hostile.
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The companies manufacturing the generics will enjoy quite a boom.
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The companies manufacturing the generics will enjoy quite a boom.
And, since almost all [wikipedia.org] of those [wikipedia.org] generic [wikipedia.org] drug [wikipedia.org] companies [wikipedia.org] are located overseas for tax purposes, they'll be able to keep most of the profits they earn without paying much in US taxes.
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You act like the US is the only one that complains about this.
http://www.techeye.net/busines... [techeye.net]
http://www.theguardian.com/bus... [theguardian.com]
http://www.theguardian.com/bus... [theguardian.com]
http://www.europarl.europa.eu/... [europa.eu]
http://www.scmp.com/news/world... [scmp.com]
Heck, it has been all over the news that Europe is flipping their shit about their companies moving to tax havens and offshoring profits.
There are no international norms, all countries (except the tax havens) are bitching about this happening.
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When TRUMP is elected, America will win so much, we will get tired of winning!
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We will win luxuriously. Atlantic Cities for everyone!
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Except that over the years we've enacted a lot of treaties that means we can't tax the products that come into the US, we can't add tariffs, we can't do anything to protect our workers because it is illegal to do so. We've abdicated control of our economy to the international corporations. The most we can do is try to convince our citizens to buy locally produced and engineered goods rather than always buying the cheapest products.
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if you believe all income belongs first to the state. All this is legal, and the whining that inevitably goes on after such transactions reflects the belief that the "fair share" of a corporation's income is less than whatever the speaker wants it to be.
When what's legal and what's sustainable for the society are not aligned, there are likely one of two results: 1) Law is changed to be more sustainable or 2) the society suffers.
But hey, more power to those who can screw over everyone else for their tax free money!
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When what's legal and what's sustainable for the society are not aligned, there are likely one of two results: 1) Law is changed to be more sustainable or 2) the society suffers.
But hey, more power to those who can screw over everyone else for their tax free money!
If what the company is doing is not sustainable, the company will fail, as it should. If what society is doing is unsustainable, it will fail, as it should. It's called capitalism and if you leave it alone, you'd be surprised at how good it works.
What would you propose? We block companies from doing these kinds of inversions? They'd just transfer their entire operation overseas and then the US would see zero percent of that income. There are any number of other countries that would LOVE to have them, a
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Here is the problem with that in practice. People are still citizens when they move overseas, corporations are not always. Often when corporations move, they become entities of the new nation. The equivalent is like taxing a German citizen on all his income made anywhere even though only 10% was earned in the US.
Now when corporations remain US entities, the income is taxed when it is repatriated if it is made through a subsidiary corporation or as normal if the corporations operate as itself in the fore
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Because corporations are magical persons who can change nationality, location and regulation by saying the magic words, "Free Market" while rubbing currency in the crack of a politician's ass.
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Actually, the opposite is true: it's the high tax welfare state that has come to an end in Ireland and that they suffered the consequences of. They have now come to their senses. The US will sooner or later have to follow suit.