With $160 Billion Merger, Pfizer Moves To Ireland and Dodges Taxes (arstechnica.com)

ourlovecanlastforeve writes: In a $160 billion dollar acquisition, drug company Allergan, a small company based in Ireland, "purchased" Pfizer, allowing the drug producing giant to move to Ireland and lower its tax rate from about 25 percent to 17-18 percent. Ars reports: "Such inversions, which are said to cost the American government billions in lost tax revenue, have drawn scorn from the Obama Administration and the Treasury Department. Last year, President Obama referred to the deals as 'unpatriotic' loopholes and proposed to close them. And last week, the Treasury announced new rules to make such deals more difficult. But Pfizer’s reverse-inversion skirts the rules, in part by keeping ownership split somewhat evenly between the two companies. After the deal is complete, current shareholders of Allergan, which has the majority of its operations in the US, will own 44 percent of the mega company. The remaining 56 percent will be owned by current Pfizer shareholders."

Comments

And we still can't import prescription drugs

[thrich81]

This is pretty bold (not really the right word) of Pfizer to move overseas, considering that they, along with the rest of big Pharma are the ones who lobbied to make it illegal for Americans to import cheaper prescription drugs. Maybe Pfizer should be required to sell their drugs in the USA for the price they charge in Ireland.

Re: Good!

[amiga3D]

Exactly! The only way to fix this problem is by taxing the products when they enter the country. It's ridiculous to allow corporations to hide billions overseas.

Re:Novel Idea

[PopeRatzo]

FWIW, the marginal corporate tax rate in the US is 35%.

And the effective corporate tax rate in the US is about 12%

http://money.cnn.com/2013/07/0...

That doesn't work

[rsilvergun]

when you have practical monopolies created when a small group of people own everything. Try to find something in your house you use day to day that isn't made by one of the Koch Brothers companies for instance. Played any of the Saints Row games? They own those (among others). You Toilet paper was probably made by them (there's a joke in there somewhere) and a lot of your food. Plus a tonne of your energy/oil.

Also for medical care you're not really free to make choices. For one thing without 6-10 years of study you don't really have enough information. For another thing if you have cancer and need chemo you're not exactly free to say no. This is a classic mistake folks make. You're comparing the decision making processes of buying a twinkie to the process of buying a heart transplant. While you might technically be 'buying' both, the processes are really nothing alike, and frankly you wouldn't want them to be.

Tax rates can be negative if the money comes somewhere else. Think of a retailer running scams. He doesn't scam his big clients because they will sue him or send thugs around to hurt him and his family. So he scams his little clients. Basically you and I pay our taxes so the big guys that own everything can own everything.

Now, I can already here you railing against taxes again so I'll say this: It's OK to pay taxes (render unto Caesar, yadda, yadda, yadda) , as long as you're getting something for it. What I hate about being an American is that I pay about the same a Europeans but without the free health care, social safety net and economic policies that raise my wages...

Re:The IRS keeps its hooks in US citizens who leav

[whoever57]

Your comprehension skill are lacking.

1. The $2M sum is only a test for eligibility.

2. Tax is payable on unrealized gains, not total assets:

IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date. Any gain arising from the deemed sale is taken into account for the tax year of the deemed sale notwithstanding any other provisions of the Code.

There is a $680k deduction, which is unrelated to any primary residence:

The amount that would otherwise be includible in gross income by reason of the deemed sale rule is reduced (but not to below zero) by $600,000, which amount is to be adjusted for inflation for calendar years after 2008 (the âoeexclusion amountâ). For calendar year 2014, the exclusion amount is $680,000