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WDEL Blog: Allan Loudell

If Pfizer absorbs AstraZeneca (with the resulting Del. job losses), could Del. blame U.S. tax laws?

Pfizer hasn't given up wooing (or perhaps later, threatening with a hostile takeover) AstraZeneca.

Almost certainly, more Delaware jobs would go down the drain.

It's revealing Pfizer has gone out of its way to reassure the Brits, but the Pfizer CEO wrote a non-committal letter to the governors of Delaware and Maryland, saying it would be "premature" to assess the impact here. Delaware's Congressional delegation has also fired off a letter to the Pfizer CEO, and doubtless will get the same mushy reply. The fix is in.

But, the current U.S. tax code -- which allows U.S. corporations that merge with foreign companies to shift their headquarters to lower-tax countries for tax purposes as long as shareholders of that foreign firm own at least 20% of the merged company -- may be the ultimate culprit. The process is called "inversion."

The Obama Administration favors lowering the corporate tax rate to 28%, but wants to toss out the loophole which allows companies to lower their actual tax rate. Other legislation is pending to make it tougher for corporations to skip across the ocean for tax relief reasons.


See this article from The PITTSBURGH POST-GAZETTE---



http://www.post-gazette.com/news/nation/2014/05/14/Overseas-acquisitions-alluring-for-U-S-drug-companies/stories/201405140111

Posted at 8:06am on May 14, 2014 by Allan Loudell

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Comments on this post:

kavips
Wed, May 14, 2014 8:39am
It always comes down to taxes... When we start making the wealthy pay their fair share of the tax burden, we will again return to the American Dream that lasted from WWII to that century's end...

The Bush tax cuts did a greater damage on America than NAFTA, by sucking out the life from our economy... and putting the money overseas where it does Americans no good.....

Simply taxing all income the same, no matter where produced, will erase the advantage of moving overseas....

If taxes go up on the wealthy, then everyone's taxes won't have to go up. If taxes don't go up on the wealthy, then guess who has to pay more out?

It is all Common Sense.

JimH
Wed, May 14, 2014 9:43am
Several weeks ago, I saw a tax story about the merger. I was so amazed that a corporation could lower the tax burden by moving to Britain. Apparently that nation is getting its act together.

I do not desire higher taxes on anyone: corporations, individuals, wealthy folks, etc. I dislike the un-American idea that if someone is doing better than me, LET'S GET-EM!!!

Punishing anyone, individual or corporation, with higher taxes, does not benefit me in any way.

EarlGrey
Wed, May 14, 2014 9:53am
"Simply taxing all income the same, no matter where produced, will erase the advantage of moving overseas..."

You mean a FLAT TAX on income?...sounds like the only fair tax system that exists. If everyone pays the same tax rate and no one has special loopholes. Only solution that sounds better is abolishing the 16th Amendment.


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