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Tags: Pfizer | tax | US | UK

Congress Proposes Third-World Tactics to Attack Corporate America

By    |   Wednesday, 14 May 2014 08:07 AM

Let me profess no lost love for big pharma or how medicine is practiced in America. Growing up in India, in a family where my dad was an army doctor, I was taught not to overmedicate. The usual cure was "Take two aspirin and see me in the morning."

In contrast, here in America, I had a root canal and the doctor asked me, "What kind of painkiller should I prescribe you? A large prescription of the extra heavy prescription painkillers?" Yes, he actually asked me that.

Treating us with symptomatic style of medicine, the large pharmaceuticals have turned our civilization into a bunch of pill-popping drug addicts.

Yet, I do believe in free trade and freedom for even these large corporations.

I am talking about the recent news of the attempted takeover of AstraZeneca, a U.K. company by Pfizer, the U.S. giant pharmaceutical.

One of the prime reasons that Pfizer is so interested in AstraZeneca is because the takeover would allow the company to migrate its headquarters from the United States to the United Kingdom.

Why do this? Because right now Pfizer is paying U.S. corporate tax, which is substantially higher than it is in the United Kingdom. So by moving the business headquarters abroad, the company would save shareholders billions.

The U.S. government, however, has a big problem with this. Sen. Ron Wyden, D-Ore., the senate chief tax writer, has issued a stern warning to U.S. companies that they will not be allowed to move out of the United States to save on taxes. He went even further by outlandishly suggesting that he would like Congress to enact legislation back-dating it to May 8, 2014, before Pfizer's announcement to offer to buy AstraZeneca.

RETROACTIVE legislation!

Once again, symptomatic cures. Instead of attacking the cause of why U.S. companies want to leave and settle overseas, instead of curing what causes rich citizens to abandon U.S. citizenship in droves, instead of simplifying tax laws and reducing taxes, the government adopts scare tactics and threats to cause harm and subject corporate America to financial repression.

The federal corporate tax rate alone can be as high as 38 percent, and that's before including state corporate taxes, or personal taxes on the dividend distributions to shareholders.

That is precisely the underlying cause: everyone is taxed to the hilt so that the government can continue squandering it all and indebting future generations.

The interesting fact is that what Pfizer is proposing is completely legal. There are no laws that prevent the company from acquiring another firm and moving the headquarters abroad.

This scare tactic will likely not work in Congress, as it is not likely to pass. For once the dysfunctional behavior of our congressmen will actually save the United States the embarrassment of passing tax rules that apply retroactively. Just like when India tried passing such regulation a couple of years ago when it wanted to punish Vodafone, the U.K. mobile phone operator, and tax them several billion dollars.

And this is something that should concern everyone. The United States is beginning to adopt — or at least think about adopting — policies that are clearly not rational or even just.

Have you had diversified your financial risks?

© 2021 Newsmax Finance. All rights reserved.

The United States is beginning to adopt — or at least think about adopting — policies that are clearly not rational or even just.
Pfizer, tax, US, UK
Wednesday, 14 May 2014 08:07 AM
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