Pfizer Update: The Tax Coalition That Could
The good news just keeps coming. Yesterday we told you about new U.S. Treasury Department guidelines that would reduce the benefits and limit the number of companies that use the tax inversion loophole. These guidelines get at the tax-dodging strategies employed by Pfizer, which has been trying to dodge a $35 billion tax bill by merging with fellow drug firm Allergan, which operates out of New Jersey but is legally based in Ireland.
Today Pfizer and Allergan suddenly announced that they are terminating their $160 billion merger, which would have been the world’s largest-ever health care acquisition. In a statement, the companies said that Treasury’s proposed new rules drove the decision.
All of which is great news for Americans for Tax Fairness (ATF), of which CHN is a member. ATF and their 425 national and state endorsing organizations, including CHN, went out and gathered 120,000 signatures and submitted them to the White House, calling for strong executive action to prevent Pfizer from being able to pull off the $35 billion tax dodge. Remember, that’s $35 billion that our country could eventually use to pay for human needs.
Today, following Pfizer’s somewhat abrupt (albeit very welcome) announcement, ATF Executive Director Frank Clemente had this to say:
“The prevention of Pfizer’s inversion is great news for all American taxpayers: individuals, small businesses and large domestic corporations. Pfizer’s inversion would have meant that the pharmaceutical giant could have dodged as much as $35 billion it already owes in U.S. taxes on its offshore profits.
“Big corporations like Pfizer must be required to pay their fair share. The government cannot let them run away from their responsibilities to this nation. Treasury has taken an important step to improve the overall corporate tax system. These rules move in the right direction to level the playing field for domestic companies competing with multinationals.
“The end of the Pfizer-Allergan merger came after new anti-inversion regulations issued by the U.S. Treasury Department removed most of the tax benefit Pfizer was seeking in this merger.”
All of which goes to show that, yes, coalitions like ATF can make a difference. What was it that anthropologist Margaret Mead said about never doubting that a small group of thoughtful, committed citizens can change the world?