Perhaps we ought reconsider our corporate tax policies.
Naw, instead let's punish Pfizer by preventing any move.
"Pfizer Inc. will be able to permanently avoid paying $35 billion in U.S. taxes by merging with Allergan Plc, according to a report released by a group that advocates for tax fairness — though a tax and accounting consultant called the number “a little misleading.”
Four Democratic members of Congress joined Americans for Tax Fairness, which is affiliated with labor unions, in a news conference urging President Barack Obama’s administration to use executive authority to deny U.S. corporations tax benefits if they move their tax addresses overseas.
The call comes after Obama’s administration has announced some action to limit the benefits of corporate inversions, in which U.S. companies merge with offshore firms to establish a tax address in lower-tax countries. But those new rules would not affect the Pfizer-Allergan transaction, which would move the new company’s tax address to Dublin but doesn’t meet the technical definition of an inversion.
Pfizer spokeswoman Joan Campion issued a statement that said the merger is “not structured to move jobs out of the United States, where we conduct the majority of our research.” The move will create a “global, R&D-focused company," she said.
The ATF analysis found that Pfizer could “permanently avoid” as much as $35 billion in U.S. taxes on offshore profit. The number is based on two of Pfizer’s disclosures: first, that as of 2014, it had a deferred tax liability of $21.1 billion; and second, that it has about $74 billion in overseas earnings that it plans to hold there indefinitely.
The analysis credited Pfizer with foreign taxes paid on those earnings, based on a 10-year average of the company’s foreign tax rate, and arrived at an estimated tax rate of 18.7 percent for repatriating the $74 billion — resulting in roughly $13.8 billion in tax. That, added to the $21.1 billion deferred tax liability, yields the $35 billion figure."
http://www.newsmax.com/Finance/Companies/pfizer-allergan-tax-merger/2016/02/26/id/716264/
