Pfizer merges with Allergan and becomes largest pharma in the world – Moves To Dublin – IOTW Report

Pfizer merges with Allergan and becomes largest pharma in the world – Moves To Dublin

Monday, 23 November 2015, 19:00 BFH Uncategorized 15

Reuters-

Pfizer Inc on Monday said it would buy Botox maker Allergan Plc in a deal worth $160 billion to slash its U.S. tax bill, rekindling a fierce political debate over the financial maneuver.

The acquisition, which would shift Pfizer’s headquarters to Ireland, would be the biggest-ever tax inversion. The news prompted Democratic presidential front-runner Hillary Clinton to promise to propose measures to prevent the increasingly popular and controversial practice aimed at helping U.S. companies lower their taxes by re-incorporating overseas.

U.S. President Barack Obama has called inversions unpatriotic and has tried to crack down on the practice.

Senator Bernie Sanders, another Democratic candidate for president, called on the Obama administration to stop the deal, which “would allow another major American corporation to hide its profits overseas.”

“Congress also must pass real tax reform that demands that profitable corporations pay their fair share of taxes,” Sanders said.

To avoid potential restrictions, the transaction was structured as smaller, Dublin-based Allergan buying Pfizer, although the combined company will be known as Pfizer Plc and continue to be led by Chief Executive Officer Ian Read.

The U.S. Treasury, concerned about losing billions in tax revenue, has been taking steps to limit the benefits of tax inversion deals, but it admitted last week that it would take legislation from Congress to stop such moves.

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Sanders said he will make a sweetheart deal with corporations looking to get out of one of the highest corporate tax rate countries in the world. (The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates.)

He’ll throw a dart at a board that says 88%, 89% or 90%. You might get lucky.

15 Comments on Pfizer merges with Allergan and becomes largest pharma in the world – Moves To Dublin

  3. At this rate, even with a slashed corporate tax rate, these companies will have so many sunk costs — facilities, labs, local (huge) payrolls, visa sponsorships, relocation costs (associated with moving people to Ireland, for example), it will take a lot of incentive to move them back to the U.S. So, in addition to lowered tax rates, there should also be some sort of negative incentive (I know I sound like a spin-weasel) in the way of import duties or something to make them think twice about leaving. It’s a tricky business on that end of things, though.

    And here’s another thing while we’re at it. Corporations, especially big pharma, should have to pay for the patents, licenses and so on to the schools (many of them state-funded schools like the University of Washington) for the research that went into new drugs. This business of the taxpayers funding research that results in new drug/device patents that are then owned, gratis, by corporations needs to stop. In many cases the heads of these school labs are majority stockholders in these companies. Look up Leroy Hood and the work products of mapping the genome. I think you’ll find him sitting also at the NIH (or he was) guarding the hen house.

  5. When reading that the move involved Botox, the phrase “The news prompted Democratic presidential front-runner Hillary Clinton to…” should have been followed with something like “…buy a stockpile Botox to ensure she would always have an ample supply”…

  6. Pfizer’s famous product “Udder-Tone” was not only great for chafed cow teats, but made Pappy’s hands as smooth as silk. Ma loved it, too! It soothed her chapped thighs in the Winter.

    * sigh *

    Good times back in Wisconsin. 😉

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