The following is an excellent article in the Dispatches column in the May 1, 2016 issue of The Progressive Populist on page 5 titled “Treasury Sparks Corporate Tax Dodger” and I quote:
“TREASURY SPANKS CORPORATE TAX DODGER”
Tighter regulations of tax-dodging multinational corporations by the US Treasury Department caused Pfizer to pull back from its plans to merge with an Irish pharmaceutical company in order to save $35 bln by laundering Pfizer’s profits through Ireland.
Pfizer had planned to acquire Botox maker Allergan Plc for $160 bln and “redomicile” to Ireland, where Allergan is registered, which would be the biggest tax “inversion” ever attempted.
The new rules did not name Pfizer and Allergan, but one of the provisions targeted a specific feature of their merger — Allergan’s history as a major acquirer of other companies. The subsequent demise of the deal allows Obama to claim a big win during his last year in office.
President Obama (4/6) called global tax avoidance a “huge problem” and urged Congress to take action to stop US companies from tax-avoiding corporate “inversions”, which lower companies tax bills by redomiciling overseas.
“While the Treasury Department’s actions will make it more difficult… to exploit this particular corporate inversions loophole, only Congress can close it for good,” Obama said.
“Tax law is not sexy, but Pfizer’s loss is a potent win for small-d democracy,” William Greider wrote for The Nation (4/8). “It can provide a starting point for reinvigorating reform politics. Among Washington’s myriad scandals, the drug industry is the Goliath of our corrupted politics. Pfizer and its brethren in Big Pharma spread millions around the halls of Congress, and they always seem to get their way.”
Greider noted that Americans for Tax Fairness rallied support and argued that Treasury could stop the looting … “and this time little David won.” He added, “The US Chamber of Commerce was not happy. ‘It’s punitive, it’s paranoia,’ the boss lobbyist complained. Whenever the Chamber whines, we know something good has happened for the people.”
He also noted that “Pfizer’s CEO, Ian Read, was stupid enough to announce that the company was abandoning US citizenship right in the middle of a tumultuous presidential campaign—one in which voters have expressed alarm and anger about their lost prosperity and continuing economic troubles.
The rebellion may have legs, regardless of who wins the White House this fall, because the corporate wise guys have unwittingly established a new context for how we look at tax debates and other economic issues: patriotism. Pfizer’s cynical ploy deeply insults the fervent national loyalty of most Americans. … Pfizer, like so many other corporations, ignored this public sentiment and took the occasion to jump ship for greener pastures in Ireland. Of course, the company was not actually planning to go anywhere. It was only going to move its address offshore to reduce its tax bill dramatically. Both Hillary Clinton and Bernie Sanders jumped on Pfizer. Even our even-tempered president was appalled. Treasury took the cue and shut down the odious loophole that had allowed what is called ‘corporate inversion’.”
While Pfizer was planning its change of nationality, Greider noted, it raised the prices on more than 100 of its medications, some by as much as 20%. Meanwhile, the Obama administration’s proposed new multilateral trade agreement, the Trans-Pacific Partnership (TPP), aims to keep poorer countries from developing cheaper drugs by extending the patent rights of Big Pharma. “So much for ‘free trade,” he said.
He said Congress should require the government to negotiate drug prices for Medicare and Medicaid. He quoted Dr. Ramin Oskoui, a D.C. cardiologist whose patients complain that they can’t afford their medications. The doctor, who described himself as a libertarian, suggested that the government could achieve lower drug prices by enforcing existing antitrust laws.
(THERE WERE TWO THINGS THAT CAME UP IN THE PANAMA PAPERS DISCUSSION–BOTH CONCERNING HOW RICH PEOPLE DUCK THEIR INCOME TAXES. THE FIRST ONE IN THE DISPATCH COLUMN ON PAGE 5 WHERE THEY FIRST TALKED ABOUT CORPORATE INVERSION AND ALSO QUOTED WHAT WILLIAM GREIDER WROTE IN THE NATION MAGAZINE. THE SECOND ARTICLE ON PAGE 17 WRITTEN BY JUAN COLE TITLED “PANAMA PAPERS AND MIDDLE EAST LEADERS’ SECRET BANK ACCOUNTS.” PEOPLE ARE GETTING SICK OF WHAT IS GOING ON, OTHERWISE, THEY WOULDN’T BE JOINING THE GROUP “DEMOCRACY SPRING” WHERE THEY ARE PICKETING WASHINGTON AND HOPING TO GROW AND GET BIG MONEY OUT OF POLITICS AS DESCRIBED IN ANOTHER “DISPATCH” ARTICLE ON PAGE 22 TITLED “‘DEMOCRACY SPRING’ RISES TO PROTECT PLUTOCRACY.”
LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran