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[numble]

I'm just amazed how so many people are willing to carry water for the rich, even though there's no chance that they'll ever be rich themselves.

Society costs money. Corporations have most of the money. They should pay more to support society. The end.

This is a very simplistic statement. There is not much of a principle behind taxation of foreign income. If an iPhone is assembled by a Chinese worker, sold to a Chinese consumer in Beijing in an Apple Store by a Chinese Apple Store employee, and there are transfer pricing arrangements that book most of that profit offshore in Hong Kong, Singapore or Ireland, the "equality" argument would be that the tax on that profit should be paid to China, not that the profit earned from the Chinese factory worker, Chinese employee and Chinese consumer should be taxed in the US to support US society.

 

[Unknown Soldier]

You can renounce US citizenship if you want to.

But (this is a whole other topic) it may be reasonable for US to follow other developed countries and not tax the foreign income of their private citizens.

The private citizen equivalent of this would be remaining a US citizen, living in the US, but paying taxes in Ireland. Multinational corporations can arbitrarily choose their nation of domicile for tax purposes, why can't I?

 

[Kill3r7]

I'm just amazed how so many people are willing to carry water for the rich, even though there's no chance that they'll ever be rich themselves.

Society costs money. Corporations have most of the money. They should pay more to support society. The end.

I don't think anyone is arguing that they shouldn't pay taxes. Pfizer will still be paying their portion of taxes. It is just that after the merger they will be paying less of them. Why should they be taxed by the US for overseas profits, likely products manufactured abroad?

 

[numble]

The private citizen equivalent of this would be remaining a US citizen, living in the US, but paying taxes in Ireland. Multinational corporations can arbitrarily choose their nation of domicile for tax purposes, why can't I?

No, its not. You can renounce your citizenship and continue to live in the US under some other status (though not permanent residency, as that is the same tax effect as a citizen). You will still pay taxes on US income, but not your foreign income (like a foreign corporation--Sony pays US taxes on US income, but not Japanese income).

And no, corporations can't arbitrarily choose, as the Treasury rules require that the US company's former shareholders cannot comprise 60% of the new foreign company.

 

[Darren870]

The private citizen equivalent of this would be remaining a US citizen, living in the US, but paying taxes in Ireland. Multinational corporations can arbitrarily choose their nation of domicile for tax purposes, why can't I?

No.

The private citizen equivalent is a US Citizen living in another country and having to pay tax in that country AND the USA. Which is how it is today.

These companies are taxed on their overseas profits in two places.

 

[Overlee]

I don't think anyone is arguing that they shouldn't pay taxes. Pfizer will still be paying their portion of taxes. It is just that after the merger they will be paying less of them. Why should they be taxed by the US for overseas profits, likely products manufactured abroad?

The issue lies with Pfizer happy to take corporate welfare but not wiling to give back. From today's NY Times

Democratic critics said what was especially galling about this tax-driven merger was that Pfizer had benefited from years of federal research, tax incentives and patent protection, and that the announcement came just days after the Treasury Department issued new rules to limit such arrangements.

“We cannot continue to allow Pfizer and other corporations to pretend that they are American while reaping the benefits this country has to offer, yet claiming to be another nationality when the tax bill comes,” said Representative Rosa DeLauro, a Connecticut Democrat who has called for banning companies that move their headquarters overseas from getting new federal contracts.

While they are getting taxed (and avoiding it) they receive so many subsidies from us that they should be willing to pay more on that end.

 

[Melchettsmoustache]

At times it's like people in this thread don't want acknowledge the notion that's it's absurd that phizer should be paying tax on profits gained overseas.

A poster above described it perfectly. Built, marketed bought and paid for in China but tax on profit to the US.

Most countries have moved away from or have never implemented this. Why stay in a country that does?

And frankly the comment above noting that most of us will never be rich means we shouldn't think it absurd that they be treated differently to the majority is ludicrous. As I detailed above a mate of mine is paying £50k a year in tax and NI, just because after his legal contributions he has £70k left shouldn't mean he is obligated to hand over the difference between his salary and someone stacking shelves. He's paying a wedge more than most couples contribute himself it's just that its proportionally different to his take home.

 

[Turin Turambar]

The notion that corporations should pay X or Y taxes (and to which country) depending of where they say their HQ/executive office is located is so early twentieth century.

We need a new system.

 

[Y2Kev]

The issue lies with Pfizer happy to take corporate welfare but not wiling to give back. From today's NY Times



While they are getting taxed (and avoiding it) they receive so many subsidies from us that they should be willing to pay more on that end.

Foreign companies receive the same benefits. They collaborate with our research institutions, they receive IP protection in our courts, etc. This is all about foreign profits. Honestly I am surprised more companies are not inverting; the rules do not make sense.

This is, by the way, not an inversion. Pfizer is being purchased by a legal vehicle that will be created under Allergan plc (f/k/a Actavis plc).

 

[TheRedSnifit]

It's amazing how an overwhelming majority of developed economies have somehow managed to avoid the calamities caused by not having a repatriation tax, and every independent U.S. advisory board, working group, and federal agency tasked with exploring tax reform (including Obama’s own Economic Recovery Advisory Board, Council on Jobs and Competitiveness, and Commission on Fiscal Responsibility and Reform) has concluded that the US will not be plunged into a depression by a territorial tax system.

Well, maybe I'm being unfair. These other countries are reactionary plutocracies like Germany, Canada, Australia, Sweden, France, Switzerland, and almost every other industrialized nation in the world. We wouldn't want a progressive utopia like the US to emulate them.

 

[Overlee]

Foreign companies receive the same benefits. They collaborate with our research institutions, they receive IP protection in our courts, etc. This is all about foreign profits. Honestly I am surprised more companies are not inverting; the rules do not make sense.

This is, by the way, not an inversion. Pfizer is being purchased by a legal vehicle that will be created under Allergan plc (f/k/a Actavis plc).

I do understand that. And I can see the angle (democratic) politicians are using by drawing upon the hatred many here state side have towards big business.

Reading more into the company and their tax with holdings I found this article from 2013 on Tax Analysts

(5) Booking U.S. tax on foreign profits. In 2012 Pfizer booked about $2.2 billion of U.S. tax expenses "as a result of providing U.S. deferred income taxes on certain current-year funds earned outside the U.S. that will not be indefinitely reinvested overseas." If the residual U.S. tax rate on these earnings was 25 percent, this would correspond to $8.8 billion, or 52 percent of the total before-tax foreign profits of $16.8 billion in 2012.

The booking of deferred tax liability on unremitted foreign profits is unusual. It is now routine for companies to treat all of their foreign profits as permanently or indefinitely reinvested so there is no need to record U.S. tax liability on their unrepatriated foreign profits. (Apple Inc. is one notable exception. See Tax Notes, Feb. 13, 2012, p. 777.) If the $2.2 billion of deferred U.S. tax liability was not recorded for foreign profits in 2012, the reported effective tax rate would have been 3 percent instead of the 21.2 percent actually reported.

Also in its 2012 Form 10-K report, Pfizer stated that tax-deferred liabilities of similar amounts were booked for 2010 and 2011 ($2.5 billion and $2.1 billion, respectively) for current-year profits earned outside the United States. In 2011, if this expense were not recorded, Pfizer's effective tax rate would have been 14.7 percent instead of the 31.8 percent reported. In 2010, if this expense were not recorded, its effective tax rate would have been -14.2 percent instead of the 12.2 percent reported.

Why did Pfizer book this expense? It is possible it wanted to avoid the public scrutiny a low reported tax rate might attract and reduce what is now called reputation risk. Another explanation is that it had no choice. "The shifting of substantial income out of the United States has hoisted some U.S. multinationals on their own petard," said professor J. Richard Harvey of Villanova University School of Law. "It may be that some like Pfizer have shifted so much income offshore that they may be having difficulty justifying to their auditors that 100 percent of their foreign income is permanently reinvested."

The Bottom Line

Over the last half decade, Pfizer has put all of its profits outside the United States despite high prices in the United States, more than 40 percent of its sales in the United States, and a heavy concentration of research in the United States. It appears U.S. transfer pricing rules and the arm's-length standard are working well for the company. If it weren't for U.S. taxes on repatriated profits, Pfizer's tax picture would be far rosier. But cash needs and accounting requirements have upset the apple cart.

To help fund its acquisition of Wyeth in 2009, Pfizer repatriated $36 billion, paid U.S. tax on those billions of dollars, and avoided any impact on its reported profit. Beginning in 2010, Pfizer has been booking more than $2 billion annually in U.S. tax liability on its foreign profits, but it is not actually making payments corresponding to that liability. If we remove the effects of these deferred U.S. tax liabilities from the effective tax rate calculations, as well as the effects of one-time settlements with the IRS and other tax authorities, the company's effective tax rates for 2010, 2011, and 2012 would have been 12, 18, and 15 percent, respectively, instead of the 12, 32, and 21 percent reported, as shown in Figure 6.

Pfizer needs cash to pay dividends, pay down debt incurred for the Wyeth acquisition, buy back shares, and perhaps acquire more U.S. companies. At the same time, it is under pressure to shore up its after-tax earnings as patents on profitable drugs expire faster than they can be replaced. If there was ever a company that could use another tax holiday -- or generous transition rules to a territorial system -- Pfizer is it.

I'm no expert by any means but I can see why so many continue to feel these companies take advantage of us. They charge high prices, collect welfare and then avoid the taxes both nationally and internationally that they owe.

Pfizer is that "friend" that sits down at a cafe for lunch with you and then bails before the check arrives.

 

[Ingueferroque]

why is it greedy to want to pay less tax? Who volunteers to pay more?

Really?

 

[numble]

I do understand that. And I can see the angle (democratic) politicians are using by drawing upon the hatred many here state side have towards big business.

Reading more into the company and their tax with holdings I found this article from 2013 on Tax Analysts



I'm no expert by any means but I can see why so many continue to feel these companies take advantage of us. They charge high prices, collect welfare and then avoid the taxes both nationally and internationally that they owe.

Pfizer is that "friend" that sits down at a cafe for lunch with you and then bails before the check arrives.

The article doesn't seem to support what you are saying. Over half of their sales are overseas, but they should be paying US taxes on it? As Y2Kev alluded to, this puts them in an uncompetitive position compared to competitors like Novartis, AstraZeneca, Glaxo, Roche, who only need to pay US taxes on sales they make in the US, they do not need to pay US taxes on foreign profits because they are not US companies, but these companies also "charge high prices and collect welfare" as well.

 

[Overlee]

The article doesn't seem to support what you are saying. Over half of their sales are overseas, but they should be paying US taxes on it? As Y2Kev alluded to, this puts them in an uncompetitive position compared to competitors like Novartis, AstraZeneca, Glaxo, Roche, who only need to pay US taxes on sales they make in the US, they do not need to pay US taxes on foreign profits because they are not US companies, but these companies also "charge high prices and collect welfare" as well.

Thats it, they aren't American. I'd be willing to bet those companies never have seen half the benefits afforded to them as an American company like Pfizer gets.

They are only moving their headquarters to another country to avoid paying taxes. That's the price you pay to do business here. America doesn't exist to help huge mega corporations make even more money while they simultaneously screw over our population.

They want to move? Good! We can void their patents and allow smaller more friendly pharmaceuticals to take their place. No one outside their boardroom will shed a tear. I know I wont.

Life will go on. We will survive.

 

[numble]

Thats it, they aren't American. I'd be willing to bet those companies never have seen half the benefits afforded to them as an American company like Pfizer gets.

They are only moving their headquarters to another country to avoid paying taxes. That's the price you pay to do business here. America doesn't exist to help huge mega corporations make even more money while they simultaneously screw over our population.

They want to move? Good! We can void their patents and allow smaller more friendly pharmaceuticals to take their place. No one outside their boardroom will shed a tear. I know I wont.

Life will go on. We will survive.

I want to make that bet with you. Can you name the benefits that are not afforded to companies from foreign countries? You do understand that being a part of the WTO and numerous trade agreements like NAFTA and the upcoming TPP forbids the US from giving favored benefits to its own companies, right? Nothing against the US punishing companies for being US companies though.

There is no legal basis to voiding their patents. That's silly. Their largest competitors are European companies and they may have a larger American presence than them. Shutting them down would just give a benefit to foreign companies.

 

[Phat Michael]

Congratulations on living off of the backs of litteral slaves un the gulf emirates

But hey! At least YOU aren't paying them filthy taxes

Congratulations on failing English!

Literal slaves ay? always takes one to bring up that argument! I dont get how I live off slaves or what that means, but keep it up!

Yes of course i dont pay taxes, why would I? This isnt a charity - tax free income is one of the benefits of living here, along with free healthcare, free flights home, free education for my kids if i decide to have them.

Im assuming a lot of the people here who are pro keeping the money in America arent in a high position at work, or simply dont have a job so everything seems unfair. Most people complain about having to pay tax, it's the first time ive seen people asking to pay more.

 

[FyreWulff]

Really?

You're talking with a guy that sticks his fingers in his ears each time you point out the fact that his lifestyle is propped up by a government that steals migrant workers' passports and has much of the infrastructure supplied by free slave labor.

It'd be like the United States pretending sharecropping and undocumented migrant workers didn't exist at all, at all government levels.

And it's never about human rights abuses, you're just mad that you didn't get a job in Dubai or something. Like not wanting to live in Texas is because you couldn't get a job there, instead of the truth of it being an ass backwards state.

 

[Phat Michael]

You're talking with a guy that sticks his fingers in his ears each time you point out the fact that his lifestyle is propped up by a government that steals migrant workers' passports and has much of the infrastructure supplied by free slave labor.

It'd be like the United States pretending sharecropping and undocumented migrant workers didn't exist at all, at all government levels.

And it's never about human rights abuses, you're just mad that you didn't get a job in Dubai or something. Like not wanting to live in Texas is because you couldn't get a job there, instead of the truth of it being an ass backwards state.

Where is the labour free anywhere? Workers get paid here. They have to have a salary cert and employment contract to get a residence visa.

You know they also have to have mandatory healthcare by their employers in order to get a visa as well? And a bank account? And Emirates ID card.

Without all these things they couldn't live or work here. If you actually visited here or worked here you would know these things.