“You’ve seen a recurring headline at the top of the business section this year: ‘ABC Corporation buys XYZ Inc. in multi-billion merger.’ When one company buys another, it’s typically done because there’s a fundamental belief that the sum is greater than the parts (Apple for Dr. Dre’s Beats Music, for example),” Trish Regan, anchor and editor-at-large for Bloomberg TV, writes for USA Today. “Or a belief that the target has a product the acquirer desperately needs (Valeant for Allergan, the maker of Botox). Or, the merger simply takes competition off the market (Comcast for Time Warner Cable – the No. 1 and No. 2 cable companies in America). In sum, there are lots of good reasons for two companies to get married.”
“But there’s a new reason corporations are merging – and it’s more akin to a mail-order bride arrangement. In these loveless transactions, American companies are buying foreign counterparts to get a new passport – and enjoy the lower corporate taxes that come along with it,” Regan writes. “The most recent example of a so-called ‘inversion transaction’ is Pfizer’s $106 billion battle to take over Britain’s AstraZeneca. Pfizer, a 165-year-old blue chip American healthcare company with its headquarters in New York City, plans to reincorporate in the U.K. as part of its AstraZeneca acquisition. Pfizer is voluntarily electing to give up its citizenship as a part of this deal — and the U.S. tax code is to blame.”
Read more in the full article here.
MacDailyNews Take: The U.S. corporate tax rate is way too high. Obviously.
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
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Since Corporations are now people.. as a foreign citizen they should also lose their ability to lobby and contribute to campaigns. If you want to give up your citizenship to save a buck thats fine. Just accept all that comes with that… enjoy your new socialized country..
American Express put it best.. Membership has its privileges !
Corporations will never be people if they can’t be imprisoned or executed for egregious crimes against humanity.
Declaring corporations people was simply a way of ensuring the corporation assumes the liability, instead of the real criminals, who usually walk away free.
Legally, the corporation always assumed the liability, except with respect to criminal or improper activities on the part of individuals. It may not appear to be so, but nothing has changed with respect to that characteristic of corporations. Sheltering shareholders (owners) from liability for the actions of the corporation is the reason that the corporate entity was defined. Upper management sometimes plays with corporate assets and wields power as if they own the corporation, which can be to the detriment of the shareholders (which is against the law). Unfortunately, they are seldom prosecuted except in the most egregious cases of fraud or criminal misconduct. They are generally shielded by the corporation, which pays a fine and admits no wrongdoing.
The “corporations are people” crap is an extension of that basic legal nature to ridiculous extremes. Specifically, corporations are now accorded First Amendment rights of free speech. Since participation in the political process has been deemed an element of speech, corporations are also now free to participate in the political arena (e.g., influence politicians and legislation) using their copious bank accounts. Make no mistake – the primary factor behind the “corporations are people” decision is to open the coffers of wealthy corporations to fill the pockets of like-minded powerful politicians and political organizations (and those who are willing to become supporters of a particular viewpoint given sufficient infusions of capital).
No need to give up citizenship. They’re simply foreign citizens with dual citizenship.
Everyone likes to talk about the “Global Economy” and “Global Partnerships”, but WDC doesn’t want to merge into a similar tax situation, because they WANT THE MONEY.
With the total take of all taxes, fees, levies and licenses in the US, State & local levels over 50% and lobbyists representing the richest in WDC, I dare say we are already in a form of Oligopoly economic system.
The only way to stop WDC from padding its pockets is a constitutional limit on how much the WDC government can spend out of GDP each year.
States rights will become a visible force in the near future as people more and more realize what oppressive taxes and fees are under Obamacare.
So who is the joker who will remark that they want to see her on a red ball?
(oops, guess that would be me)
How about a red sofa?
Wow!!! Socialized…..and with LESS tax.
Why would anyone in their right mind want the American “Pay As You Go” with HIGH tax???
I hope the Pfizer deal gets stopped by regulators. The idea of our most successful companies becoming nothing more than tax havens for debt-laden US corporates fills me with horror.
Although given how utterly spineless our government has always been on this front, I wouldn’t be surprised if the UK allowed Pfizer to take over and gut AstraZeneca and threw in Glaxo Smithkilne in a buy one get one free deal.
I am not sure how sticking to a bad tax policy despite all evidence that the US is not competitive is being spineless.
When the government has to start interfering with every foreign business deal in order to prop up taxes, it will inevitably make legitimate deals more difficult further handicapping US companies.
The right thing to do is simply and rationalize the tax code, not develop a spine (an new bureaucracy) for interfering in business.
Sorry, I should have been clearer there. I’m British. Pfizer have admitted that there will be UK job losses and a large cut in the R&D budget if this takeover goes ahead. They want a UK address and a listing on the FTSE in order to perform some clever accounting, and they’re willing to completely destroy a successful £63bn company to get it.
I say Pfizer should bugger off. I’ve nothing against foreign ownership of British companies. Some of them work extremely well, such at Tata’s ownership of Jaguar Land Rover. This Pfizer deal though is bad for competition, bad for research and bad for UK jobs.
Trish on a red ball?
good writer and babelicious.
Why don’t we see Trish quoted here more????
Or just see Trish more???
Are we going to start getting images of all the authors, or just the ones MDN takes the Kleenex out for?
The common cold can be a bitch or are we talking about Trish Regan?
They must have the hots for Rush Limbaugh
The U.S. corporate tax rate is way too high.
What’s the difficulty of understanding that 35% is too much; a tax rate that is way above 1/4. That uncle sam has gone out of proportion.
What if Americans simply forced a Constitutional change that forced a balanced budget (with limited exceptions for true emergencies) ? The biggest problem with the USA tax system is that it never balances — people demand more services than Uncle Sam collects, and this has happened practically every year since Eisenhower. It is unsustainable; such insolvency was a major factor in Rome’s decline.
Americans have to stop whining about tax burdens and pay off their accumulated debts BEFORE you can even consider lowering rates. In the short term, wasteful spending needs to be cut drastically (i.e., foreign nation building) and tax revenues need to INCREASE (i.e., close off tax loopholes like mortgage deductions for 2nd houses, corporate freebies, etc.) Then HAVE THE DISCIPLINE TO SPEND NO MORE THAN YOU HAVE.
The typical rants here about what the rate is shows how shallow the modern libertarian thinks. You do not have the luxury to avoid paying for the debts that your father and grandfather incurred. Get over it! If you care about national health, then you must pay off your accrued debts ASAP. Those payments can’t come from entities that have no money. So, corporations, stop hoarding wealth. The REAL corporate tax collections as a percentage of profits sits near record lows in all industries, and that MUST change if the USA intends to survive another century as a major world player.
You’re half right. We need to force a balanced budget.
But giving the government more money is not the solution. This has never resulted in a balanced budget; they just spend more.
The solution is to reduce the size of government and cut government spending. Our federal government spends way too much and it has too much power which is being abused more and more for political purposes. Nobody wastes money the way our government does.
You might want to re-read the all-caps sentence in my post. First pay off debt, then ratchet down tax revenues. That is the only order of operations that can possibly work. Doing it the other way accelerates insolvency. Whenever a politician proposes a lower tax rate, its because some lobbyist paid him to do so. Politicans should leave rates alone for a decade, and start eliminating special-interest loopholes, with all incremental revenue earmarked to debt elimination. Only then will America be free. Until then, all Americans are slaves to the bankers.
Democrat/Liberal tax policy is that all taxes should always be higher. Liberals love the 35% rate and don’t give a shit if businesses leave the country entirely. Their ideology – that capitalism is bad and must be punished – trumps everything. In fact businesses are leaving the US in droves. Manufacturing is being moved out of the country as fast as possible to avoid the deadly tax and regulations that Democrats promulgate to punish manufacturers for every particle that comes out of their smokestacks and downspouts. Liberals won’t be happy until all business is removed from America and they can frolic in pastoral bliss. Except they will demand Starbucks, expensive wines, BMWs, big houses, expensive electronics, lots of plane travel. Just no companies making any money or any products. That is their goal and they are making lots of progress under the big eared Ambassador killer.
I think you’re lost, as you clearly clicked on a MacDailyNews link by accident.
Here’s a link back to where you’re obviously being spoon-fed all your “news” and out-of-context sound bites:
http://www.foxnews.com
Have a nice day over there!!
No, I ma not lost you are a moron who does not care that the asshole with zero qualifications except a hatred for America let four innocent Americans die so he would not have to explain he was aiding Al Queda in Libya, right before an election. Then he spent months lying, which is now all known as lies. His hatred of capitalism is also well known. He loves his own money and doesn’t even give any to his destitute relatives. But he hates everyday Americans who succeed through free enterprise and hard work, instead of the graft and crony bribery he prefers. All documented facts and not even arguable for anyone who pays attention and is honest.
Which was the only news organization that got Benghazi right?
Oh yeah. It was Fox News.
You and your friends at the other MSM outlets were too busy sucking Obama’s ass to find any truth.
Your health and education systems are underfunded, you need to at a tax higher rate obviously.
Not paying for proper education will destroy you USA.
We overpay for educations. Education here was far superior when there were schoolhouses with McGuffey Readers a century ago. Then the kids could speak, write and do math. Now vast amounts of money are spent on religious training in our public schools – the kids are taught that the earth is sacred and man is evil and is destroying the earth we only have about 2 years until we are all dead. This passes for education in America now. If we would end the idea of public education run by union teachers and operating as monopolies we would have a chance.
Last time I checked the U.S. spends 7X more on education than all G8 nations resulting in the lowest G8 test scores.
Facts aside, not one Dem candidate that I know of has questioned an enormous waste of taxpayer dollars and ZERO accountability to educating children compared to funding (ROI).
So the next time you vote for a politician asking for more education dollars out of your pocket, remember where it goes (teacher union high salaries), not to helping young students that need it most.
The political sham-scam of the century …
Where are all these high paying teacher union jobs?
Every teacher I know is living damn near in poverty.
Teachers living in poverty? Please. Unless you’re living in one of the states with the lowest pay AND the teachers you know are all fresh out of college, spare us the histrionics. Even then, most have summers off which they can use to supplement their income and work all year around – you know, like the rest of us. Further, their pay typically increases steadily as they gain experience and seniority. The teachers I know are all paid quite well, especially considering the actual time spent on the job.
Quite right.
I personally know three teachers in early thirties, one a relation, in a small rust belt city in PA making base salaries of 61K a year. The master’s degree and extra courses taught pushes them closer to 68-71K a year.
I won’t even get started about taxpayer paid benefits and lifetime accruement of time off unused sick and vacation days.
Unbelievable.
I find it amazing that we always hear about how high corporate rates are, but never about how Americans who live as expatriates get crushed by the tax code. I am sure Pfizer can afford it more than some young American working overseas.
Next, there is a huge spread between the quoted US tax rate and the effective rate for corporations. We do have one of the highest base rates, but we also have one of the lower effective rates in the OECD- something Ms Regan of CBS/CNBC/Bloomberg has never reported over her career as it does not fit the narrative.
Finally, most political power in Congress and many campaign contributions are sourced in granting waivers, exceptions and changes to the tax code. The more arcane it is, the better it is for those who write it. Why would they want to kill the goose that laid the golden egg?
Obviously, in the USA, the cost of bringing home foreign made profits is crazy.
Obviously, Carl Levin and his ilk are crazy.
Way to hobble the USA Carl!
Repeal the Corporate Tax. Repeal the Individual Income Tax. Institute a flat 12% excise tax on everything except food, clothing, and essential utilities (gas, electricity, water, etc.)
The corporate tax code is actually American economic hegemony. The more America invests outside the US, the more influence we have in the world. Congress is not changing the laws SPECIFICALLY for this reason. US companies growing the world economy is ultimately good for the US and should have a downward impact on poverty, war, etc. Europe used to have wars all the time. American investment has virtually eliminated that. Same with Asia. We have only failed in the Middle East. Congress does not care about American corporate money overseas because it keeps the private sector developing their economies rather than the US taxpayer sending aid.