Pfizer Inversion Stalled By Treasury Action
Pfizer, the giant drug company, was on the verge of finishing a move that would allow it to dodge some $35 billion in taxes, known as an "inversion" ... but the U.S. Treasury issued a new rule which should halt the planned inversion.
After Fair Share, in coalition with groups across the country, called for new Treasury action, they responded this week by issuing the new rule. Fair Share members sent in thousands of comments in support, and Americans for Tax Fairness, a coalition of groups working to make the tax code more fair, together reached more than 120,000 comments.
This is a big victory in our work to stand up to corporate tax dodging.
Pfizer, one of the largest pharmaceutical companies in the world, was finalizing a plan to merge with a smaller Irish drug company called Allergan. The move would allow it to declare itself an Irish company for tax purposes.
If Pfizer was able to renounce its status as a U.S.-based company, it would be taxed at a much lower rate than American-based companies in a scheme that is referred to as "corporate inversion." The crazy thing is, Pfizer doesn't actually have to move its CEO or any of its central offices -- it can just claim on paper to be headquartered in Ireland, much in the way that Burger King is now, on paper, a Canadian company.
Not only would this give an unfair advantage to Pfizer against other companies, it would also allow them to forgo paying taxes for $148 billion they have stashed offshore.
We can't let some big corporations continue to dodge taxes with high-paid tax lawyers -- everyone should play by the same rules. How can we invest in education or roads, bridges and public transportation if large, profitable companies are scheming to avoid paying their fair share?
The Treasury rules are a step in the right direction and will save taxpayers $35 billion in lost taxes. But further action is needed from Congress to finish the job.