Larry David impersonator, Senator from Vermont, and Democratic Party candidate for president Bernie Sanders is having a conniption over the Allergan/Pfizer deal. Pfizer said it would buy Botox maker Allergan in a record-breaking deal worth $160 billion to cut its U.S. tax bill by moving its headquarters to Ireland.
Reuters is reporting that Sanders is urging the Obama administration to block the deal.
“The Pfizer-Allergan merger would be a disaster for American consumers who already pay the highest prices in the world for prescription drugs,”
Despite Bernie Sanders’ claim logic dictates that if the merger does anything to drug prices it would drive them downward. Besides the usual economies created by merging companies, the move to Ireland will serve to drive down Pfizer’s taxes. In fact the tax aspect of the deal has been seen as critical. The U.S. corporate tax rate of 35 percent is among the world’s highest, while Ireland’s is just 12.5 percent. Allergan, itself is the product of a tax-lowering inversion deal, and has a roughly 15% tax rate.
Fox Business reports:
The U.S. Treasury, concerned about losing tax revenue, has been taking steps to clamp down on tax inversion deals, but experts have said these moves will do little to prevent Pfizer from shifting its domicile.
It’s time for liberals to wake up and smell the hummus–Corporate Taxes are too high and business is over regulated.
Being an international mega company Pfizer gets to vote on the United States corporate tax rate…with its feet!
So while President Obama, Bernie Sanders and their fellow progressives play class warfare the United States is losing jobs to other countries. Just look at the chart below–it represents the corporate tax rates by country per KPMG. The United States (in red) is the second highest, if you look at the right handed column near the bottom (in green) is Ireland. Heck China (25%) and Russia (20%) have lower tax rates than ours.
Why would any corporation stay in the U.S. when they can merge with a company from Sweden cut their taxes almost in half and possibly sponsor the Swedish Bikini team?
Thanks to higher taxes and growing regulation, the United States is no longer the easiest place in the world to operate a business according to the rankings prepared by the world bank in 2009 the U.S. was ranked third in their analysis of the most business friendly countries, the June 2015 report ranked America seventh. Countries are ranked on their ease of doing business, from 1–189. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm.
Based on the high taxes and the growing regulatory environment can you blame companies like Pfizer for wanting to move overseas?
If Bernie Sanders or any other liberal wants to reverse the trend of companies voting with their feet and moving out of the U.S. they have to make America more business friendly.
|Tax Rates By Country Per KPMG||Tax Rates By Country Per KPMG|
|LOCATION||2015 (%)||LOCATION||2015 (%)|
|United Arab Emirates||55||Uruguay||25|
|United States||40||St Maarten||24.5|
|Argentina||35||Korea, Republic of||24.2|
|Honduras||30||Jersey (Channel Islands)||20|
|Papua New Guinea||30||Thailand||20|
|Bangladesh||27.5||Hong Kong SAR||16.5|
|Jamaica||25||Bosnia and Herzegovin||10|
|Trinidad and Tobago||25||Paraguay||10|