Wednesday, July 23, 2014

Companies shouldn’t be able to “escape” U.S. taxes


You’ve heard this story before, here’s another one: 

A big U.S. drug company, AbbVie Inc., has purchased an Irish company and plans to re-incorporate in Great Britain, so it can cut its corporate tax bill by almost 50 percent.

Smart move, right?

Well, how about these apples?

For starters, AbbVie is currently paying an effective tax rate of only about 22 percent—forget the disingenuous squealing blather about the “high” nominal federal tax rate of 35 percent, almost no company pays that rate on its income after corporate tax breaks are factored in.

And this one: Yahoo Finance points out that Sen. Dick Durbin (D-IL) called out AbbVie for moving “after using taxpayer-supported medical research to become one of the United States’ most profitable companies.” The federal government provides almost $35 billion a year to subsidize drug research by Big Pharma.

And this one: Durbin also said "It was our government’s patent office which protected their discoveries and guarded their right to make a profit. Now AbbVie is ‘moving’ to an Irish island to escape paying the U.S. taxes it owes.”

Corporations are not people.

Corporations are wholly artificial creations of human beings and society and the governments which protect and regulate them.

For starters, our government should institute a “clawback” policy for the tax breaks and subsidies provided to business: if you legally move your business to a tax haven outside the United States, your company has to pay back all the income-enhancing benefits it enjoyed while under the protection of U.S. laws.

That’s the ticket.










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