Pfizer, Allergan Confirm $160 Billion Merger Deal

– Geoffrey Smith, Claire Groden, fortune.com

Pharmaceutical giants Pfizer and Allergan confirmed Monday they will merge…in a deal that is mostly, if not exclusively, about tax.

The deal…is structured in such a way as to reduce Pfizer’s tax bill by moving its domicile out of the U.S. to Ireland. The companies said they expect…to have an effective tax rate of 17% to 18% in the first full year after closing, compared to around 25% for Pfizer at present…

“Congress has been aware of the inversion virus for a long time. In fact, it passed legislation purporting to solve the problem a decade ago. But the underlying sickness continues to gnaw away at the American economy with increasing intensity…” – Senator Ron Wyden

“For too long, powerful corporations have exploited loopholes that allow them to hide earnings abroad to lower their tax rate…Now Pfizer is trying to reduce its tax bill even further.” – Hillary Clinton

“The company that Charles Walgreen started is reportedly considering a renunciation of its American citizenship and a move to Switzerland, just to avoid paying its fair share of taxes.” -Sen. Harry Reid (D-NEV)

“…nobody owes any public duty to pay more than the law demands” – Judge Learned Hand

We Respond & Your Comments

U.S. companies move abroad via inversions and mergers because liberals have imposed on them the highest corporate tax rates in the developed world!

Before the merger Pfizer could invest $.65 of every profit dollar in the U.S. Afterwards they can invest $.88. Not a bad deal for workers – but rat poison to Hillary and Harry, who think a company’s purpose is to generate as much money as possible for the government. No – the purpose of a company is to legally return to shareholders the highest possible profits.

Here’s how to stop inversions and mergers – lower our tax rate to make it competitive with other countries.

To Sen. Wyden’s credit, he also calls for “comprehensive tax reform.” But only after inversions and mergers have been stopped. Hey, Ron – once they’re stopped, what’s your incentive to lower taxes? Maybe we should do that first.

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