Enough is Enough': Sanders Demands Treasury Block Pfizer Tax Dodging Deal

[Bilbo Saggins]

I don't want to derail this thread more than it already has been, but any flat tax is a bad deal for working and middle class people. They either bare more of the tax burden, overall revenue goes down, or both. Flat taxes are appealing for those who believe in trickle down economics or those who like simple ideas that are easy to wrap one's head around.

The notion that introducing a flat tax would solve the problem of companies that want to exploit the tax system struck me as quite odd. These are the people that are responsible for the highest drug prices on earth, and our response to them trying to cheat the system that allows them to exist is to help them out even further?

[Benton]

(03-22-2016, 04:44 PM)JustWinBaby Wrote: You do not have to be a US citizen or corporation to apply for and obtain a US patent.  Over half of US patents granted, and re-issued, in 2014 had foreign origin.

As usual, this is a bunch of bluster making promises or justifications that completely ignore how the world actually operates.

To the bold, yes, and so what?

That applies to the company's protection of the patent in the U.S. It doesn't have anything to do outside, those require patents filed in those countries. It relies on cooperative agreements between the patent office and those countries through WIPO. As a foreign company with a US patent isn't a US company, none of the U.S. offices dealing with IPs, patents or copyrights are going to open those channels and help out a foreign company.

And it shouldn't be bluster. If everyone is allowed to defer their taxes and never pay them, it all stops. There are zero dollars coming in to operate the government, pave roads, have a military, etc. Keep trying to spin that into everyone else being clueless, but if — as a business owner — the government lets me not pay taxes for years, and I take that money and go to another country, then the government has no money to operate off of. As I said earlier, deferring gains to offset losses is one thing. Never paying taxes owed is not that.

[*michaelsean*]

(03-22-2016, 05:20 PM)Benton Wrote: To the bold, yes, and so what?

That applies to the company's protection of the patent in the U.S. It doesn't have anything to do outside, those require patents filed in those countries. It relies on cooperative agreements between the patent office and those countries through WIPO. As a foreign company with a US patent isn't a US company, none of the U.S. offices dealing with IPs, patents or copyrights are going to open those channels and help out a foreign company.

And it shouldn't be bluster. If everyone is allowed to defer their taxes and never pay them, it all stops. There are zero dollars coming in to operate the government, pave roads, have a military, etc. Keep trying to spin that into everyone else being clueless, but if — as a business owner — the government lets me not pay taxes for years, and I take that money and go to another country, then the government has no money to operate off of. As I said earlier, deferring gains to offset losses is one thing. Never paying taxes owed is not that.

So is what we are talking about past taxes that have been deferred and now they will claim they won't have to pay them?  This doesn't have to do with future taxes?  Just off the top of my head I would say you shouldn't be able to get out of taxes you already owe.

[Benton]

(03-22-2016, 05:24 PM)michaelsean Wrote: So is what we are talking about past taxes that have been deferred and now they will claim they won't have to pay them?  This doesn't have to do with future taxes?  Just off the top of my head I would say you shouldn't be able to get out of taxes you already owe.

Companies can defer taxes on profits by moving it internationally into lowering taxing districts. The Alergan move will allow them to shift even more of that money annually (money made here but kept safely away from taxes in another country). In Pfizer's case, they claim they make all their money overseas and lose money here (billions ever year, according to them). So by saying they make money somewhere else, they keep it there, show a loss here and say they will pay the taxes on it later, even though the company is flush with money and actually not losing anything.

But if they become a foreign company, that money they've already manipulated out of the U.S. tax system stays out. There is no tax on it, the U.S. already allowed them to keep that money out of the system.

[Nebuchadnezzar]

So, what's to stop a company who wants to leave the US from just shutting their doors and reopening in a different country?

Then, because the original country tried to stop them from leaving, the new company decided not to sell their penis hardener in the original country?

[Mike M (the other one)]

(03-22-2016, 04:44 PM)JustWinBaby Wrote: You do not have to be a US citizen or corporation to apply for and obtain a US patent.  Over half of US patents granted, and re-issued, in 2014 had foreign origin.

As usual, this is a bunch of bluster making promises or justifications that completely ignore how the world actually operates.

Then educate us.

[JustWinBaby]

(03-22-2016, 06:46 PM)Mike M (the other one) Wrote: Then educate us.

The US has among the highest corporate rates in the developed world, but has created many loopholes and deductions (for the right price) to make the effective rate more competitive globally.  And inversions are legal, defined and spelled-out in the tax code...and tax considerations always have and always will impact where companies decide to incorporate (or move).  That's the reality, but politics are rarely about reality and more about feelz.

It all makes for juicy headlines and campaign bluster, but the reality is these huge deferred tax liabilities are on corporate books into the trillions, have been for a long time, and are never going to be paid.  In Phizer's case, probably 40-50% of their deferred taxes were legitimately earned, and taxed, overseas.  The US is one of only a handful of countries that assesses the difference vs. their higher corporate rates.

The real story here is the inversions are taking REAL cash taxes actually paid away from state and federal coffers. Period.  If it was actually about the $35B that was never going to be paid, you'd address transfer pricing to eliminate the illegitimate shifting of US earnings overseas. Phizer was and could continue racking up deferred taxes under current law - the inversion doesn't change that or rewrite history.

Mind you, if this goes through then Phizer will probably continue to increase its dividend....which will then go to federal coffers via - wait for it - capital gains tax.  

[fredtoast]

Way too many facts and policies being discussed in this thread.

Where is all the nasty name calling and Democrat/Republican blaming?