03-23-2016, 01:47 AM
(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.
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