Pfizer's inversion to avoid U.S. taxes is only the latest example of corporate tax dodging. Fairness and the common good are the casualties.
The next time you’re told that your “entitlements” (i.e. earned benefits) of Social Security and Medicare must be cut, or you wonder why America is falling behind advanced nations in so many areas, thank the likes of Pfizer.
In concocting an acquisition of Allergan to make it seem on paper as if it is the one being acquired, Pfizer will become an Irish company, paying a lower corporate tax rate of 17.5 percent. Pfizer promises Wall Street that this will save it $1.7 billion in 2018 alone.
Otherwise, the merged company will be American. Pfizer’s CEO will remain head of the merged entity and Pfizer will dominate the board. Pfizer will continue to enjoy all the benefits of being an American company, including easy market access, special patent protections, federal research and research tax breaks, friendly courts and the ability to make Americans pay the highest pharmaceutical prices among advanced nations. Pfizer becomes another “free rider,” taking benefits paid for by American taxpayers.
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American corporations do not face a terrible “tax burden.” They deploy a host of perfectly legal moves to lower or entirely avoid taxes, including keeping an astounding $2.1 trillion in profits overseas to sidestep paying taxes on them.
And yet when it comes to the common good, fair play or the health of the middle class — “we’re broke.”
It’s enough to make you sick.
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