Quote:In a bid to prevent what has been called the biggest tax evasion scheme of its kind—and others like it—Sen. Bernie Sanders of Vermont has urged U.S. Treasury Secretary Jack Lew to use his agency's authority to block the planned merger of two pharmaceutical giants.


Viagra-maker Pfizer's proposal to acquire Allergan, which manufactures Botox, is "nothing less than a tax scam," Sanders wrote in a letter (pdf) sent to Lew on Friday.

The so-called "corporate inversion," which would allow Pfizer to profit from a lower corporate tax rate in Allergan's home country of Ireland, could starve the U.S. government of up to $35 billion in tax revenue, Sanders said, citing a recent report from consumer group Americans for Tax Fairness. 

"Enough is enough," Sanders said in a statement on Friday. "Pfizer and other pharmaceutical companies cannot be allowed evade taxes and rip off American patients who already pay the highest prices in the world for prescription drugs."

"The stakes are high," wrote the Democratic presidential candidate. "I find it ironic that some of my Republican colleagues, in their internal budget negotiations, claim that $30 billion in deficit-reduction is required for the coming fiscal year. Preventing the inversion planned by just one company, Pfizer, could produce more deficit-reduction than the cuts they are demanding."

In the absence of Congressional action to limit inversions, Sanders called on the Treasury Department to block tax-dodging techniques like "hopscotch" loans and "earnings stripping"—for Pfizer and other potential corporate tax dodgers, too.

As explained by The Hill: 

Quote:Hopscotch loans occur when an inverted company moves untaxed overseas profits to U.S. shareholders through transactions that appear to be loans to the foreign parent. Treasury has already blocked hopscotch loans for inverted companies in which at least 60 percent of the merged company is owned by shareholders of the American company, but Pfizer shareholders would only own 56 percent of the combined company after its merger, according to the letter.
Earnings stripping is when U.S. subsidiaries deduct interest payments made to their foreign parents.

The report released last month by Americans for Tax Fairness found that if Pfizer's inversion goes through, the company could avoid paying as much as $35 billion in taxes through such tactics, even while it continues to aggressively raise drug prices.

"By dodging taxes while boosting prescription drug prices, Pfizer squeezes American families and communities from two sides at once," said Americans for Tax Fairness executive director Frank Clemente at the time. "In the company’s biggest insult to America yet, Pfizer’s merger would allow it to go on enjoying all the benefits of being based here—everything from a publicly-educated workforce, to an excellent communications infrastructure, to a reliable patent system—without adequately paying to support them."

On Thursday, Americans for Tax Fairness delivered more than 270,000 petition signatures to Senate Majority Leader Mitch McConnell, as well as Sens. Richard Durbin (D-Ill.), Jack Reed (D-R.I.), and Elizabeth Warren (D-Mass), calling on Congress to support the Stop Corporate Inversions Act (S. 198).

Sanders' Corporate Tax Dodging Prevention Act (S. 922), introduced last year, also seeks to prevent offshore corporate tax avoidance schemes, including inversions.

(03-21-2016, 07:49 PM)StLucieBengal Wrote: Go to a 10% flat tax across the board and this all fixes itself.

Flat tax is actually communist idea anyway.   So all you Bernie people should love it lol

(03-21-2016, 07:49 PM)StLucieBengal Wrote: Go to a 10% flat tax across the board and this all fixes itself.

Flat tax is actually communist idea anyway.   So all you Bernie people should love it lol

(03-21-2016, 09:28 PM)Bilbo Saggins Wrote: How would a flat tax that would cut more deeply into the working and middle class's disposable incomes than those who have billions of dollars to play with like monopoly money qualify as a communist idea? And may I inquire how you can be so certain that a flat tax would solve each and every instance of tax evasion? Are there countries out there that have employed a 10% flat tax and have reported that all of their tax evasion problems have all fixed themselves? We really need some clarification on all of this because we need to throw more tax money down the most wasteful rathole of all time(the US military industrial complex) so as to keep it away from the moochers.

(03-22-2016, 09:25 AM)michaelsean Wrote: So what do you do to determine which country is someone's base?  Pfizer buys Allergen and says, OK we are an Irish country.  What is the deciding factor that says, "No you are not.  You pay here."  Sales?  Origination?  Or where your headquarters are located maybe?

(03-22-2016, 10:29 AM)GMDino Wrote: American company buys foreign company they are American.

Foreign company buys American company they are foreign.  

(03-22-2016, 09:25 AM)michaelsean Wrote: So what do you do to determine which country is someone's base?  Pfizer buys Allergen and says, OK we are an Irish country.  What is the deciding factor that says, "No you are not.  You pay here."  Sales?  Origination?  Or where your headquarters are located maybe?

(03-22-2016, 11:15 AM)michaelsean Wrote: Forever?    What obligates a company to remain American?  Can they move their headquarters to Ireland and become an Irish company?

(03-22-2016, 12:53 PM)Mike M (the other one) Wrote: Easy enough of a fix, if they declare themselves as an Irish company and no longer a US company, then all of their US patents become public and no royalties have to be paid for anyone that uses them.

Now you'll have US companies offering the same product at a cheaper rate, since they didn't have to invest in the research part. They will just be manufacturing and selling it. So eff you Pfizer.

(03-22-2016, 01:00 PM)Benton Wrote: It would take a while to look up, but I'd bet the patents on their biggest money makers are probably getting close to expiring and becoming generics anyway. I know Pfizer has been playing around with how to handle their generic market.

(03-22-2016, 03:15 PM)Mike M (the other one) Wrote: They have been, but they got Viagra in the US extended to December 2020. Lyrica is December 2018.
So they are free to move now and lose their top seller and a top 5 right away.

Lipitor expired in 2012, so they've already felt the loss of that one.
Celebrex was going to expire in December of 2014, but they got an 18 month extension (June 2016).

Beats losing them now, if they were to leave prior to Dec 2020

(03-22-2016, 03:40 PM)michaelsean Wrote: Is that how the patent system works?  I didn't think you had to be an American company to obtain a patent in America.

(03-22-2016, 03:49 PM)Benton Wrote: The big thing is protection of the patent. If some Chinese company steals your patent, the U.S. Attorney's office handles it. If some Chinese company tries to do a hostile takeover, the U.S. Attorney's office handles it.

If you're an Irish company and a Chinese company tries to buy you out, they let you touch the Blarney Stone.