Wednesday, November 25, 2015

Politicians Have Taken A Huge Amount In Legalized Bribes To Allow This Pfizer-Allergen Inversion To Happen


Earlier today we looked at a proposition about Republicans enthusiastically backing Bernie Sanders for president, as so many of them in Vermont have backed him for Senate. Normally the number of votes down-ticket diminishes. So in 2012 Obama was at the top of the ticket in Vermont and he did incredibly well. He beat Romney almost everywhere and took 199,259 votes (67%) to Romney's 92,700 (31%). That same day Peter Shumlin was reelected governor and considerably fewer people voted, especially Democrats. Schumlin got 170,767 votes (58%) to Republican Randy Brock's 110,953 (38%).

But Bernie was also up for reelection that day-- and none of the normal political rules applied. He got more votes and a greater percentage of votes than Shumlin and Obama-- 208,253 (71%) to Republican John MacGovern's 72,629 (25%). Plenty of ticket-splitting for Bernie from Republicans who had voted for Brock and for Romney. Bernie won every single constituency in the state. Obama lost a couple and Shumlin lost a couple dozen. An exit poll showed that 27% of Republicans voted for Bernie. (By way of comparison, 11% of Republicans voted for Obama and 12% of them voted for Shumlin.)

In the earlier post Elizabeth Coggins, a professor at Colorado College who studies American political psychology and ideological identification, was quoted saying that "Sanders has focused primarily on economic issues on which Americans are not divided. There is a strong consensus in agreement with Sanders on many of his core ideas, and his rhetoric has been largely centered on these sorts of issues." I had that in mind today when I read Bernie's statement about the $160 billion Pfizer and Allergen merger announcement, the largest corporate inversion ever, meant to allow Pfizer to get away without paying U.S. taxes. Bernie immediately thundered that "the Pfizer-Allergen merger would be a disaster for American consumers who already pay the highest prices in the world for prescription drugs. It also would allow another major American corporation to hide its profits overseas. The Obama administration has the authority to stop this merger, and it should exercise that authority. Congress also must pass real tax reform that demands that profittable corporations pay their fair share of taxes." American as apple pie, right? No reason for any Republican to turn away from Bernie on that one, correct?

But congressional conservatives, particularly Republicans, who take immense amounts of legalized bribes from corporations and have steadfastly blocked legislation on inversions, see the problem differently, claiming that an across the board corporate tax rate decrease would de-incentivize corporations to move overseas. Yesterday's New York Times Editorial Board called the merger exactly what it is: "a tax-dodging maneuver that enriches shareholders and executives while shortchanging the public and robbing the Treasury of money that would pay for a host of government programs-- including education, scientific research and other services that also benefit corporations."
Pfizer, with a market value of nearly $200 billion, will be acquired by the smaller Allergan, which is run from New Jersey but technically headquartered in Ireland. This will allow Pfizer, which is based in New York, to pass itself off as Irish as well. Once the paper shuffling is complete, much if not most of Pfizer’s earnings-- including those that are made in the United States-- will be taxed at global tax rates that are generally lower than American tax rates.

...[I]nverted companies continue to enjoy the protection of patent laws in the United States, as well as their connections, official and unofficial, with federal research agencies-- all of which are crucial to drug-company profits. Contrary to popular belief, much high-risk, pathbreaking research and development can be traced not to the big drug companies but to taxpayer-funded research at the National Institutes of Health.

Traditionally, corporate taxation was a way to repay the public for benefits companies received from federal support. But in recent decades, corporate taxes as a share of federal revenue have shriveled. Inversions will only worsen that trend, effectively bolstering corporate profits at the expense of the public.

...It is not hard to write legislation and draw up rules outlawing inversions, and bills currently in Congress could put a stop to them quickly. What is lacking is political will to tell powerful corporate interests to stop. The Treasury Department under President Obama has issued rules to curb the practice. But the Pfizer and Allergan hookup is expected to get around these constraints. The administration could do more, but even more aggressive executive action would not be as effective as robust legislation.

Reincorporating abroad is a sophisticated variation on the old practice of avoiding corporate taxes by renting a post office box in the Caribbean and calling it corporate headquarters. Congress put a stop to those tactics in 2004. It is past time to shut down inversions as well.
Several weeks ago one of the most progressive Members of the House, Madison, Wisconsin's Mark Pocan introduced H.R. 3935, the Putting America First Corporate Tax Act, which was immediately referred to the Chamber of Commerce-controlled House Ways and Means Committee for unceremonious burial, just as Jan Schakowsky's earlier H.R. 1790, the Corporate Tax Dodging Prevention Act, was buried in the same ultra corrupt committee, then chaired by Paul Ryan, who has taken $650,959 from Big Pharma-- nearly half of which came after he because chair of the House Ways and Means Committee. Aside from Ryan, who has skipped off to be Speaker where he will get even bigger bribes from corporations intent on cheating America, these are the major players in killing the corporate inversion legislation; the money next to their names is how much they took from Big Pharma last cycle alone:
Pat Tiberi (R-OH)- $141,150
Charles "Lord Charles" Boustany (R-LA)- $85,800
Peter Roskam (R-IL)- $168,050
Kevin Brady (R-TX)- $124,332
Erik Paulsen (R-MN)- $239,179
Devin Nunes (R-CA)- $105,000
Tom Price (R-GA)- $104,600
Ron Kind (New Dem-WI)- $191,400
Joe Crowley (New Dem-NY)- $116,900
Crowley was also the crook who took the biggest legalistic bribes from Pfizer last cycle, $28,200, even more than notoriously corrupt Speaker John Boehner ($17,900). This year the chair of Pfizer's corrupt PAC, lobbyist Sally Susman is a "Hillblazer" (which means she has committed to raising at least $100,000 for Hillary Clinton's presidential run). Hillary's response to Bernie's denunciation of the merger was, as always, "me too, me too." Trump's following Bernie on this too, denouncing the merger but getting all the details wrong, as usual. "The fact that Pfizer is leaving our country with a tremendous loss of jobs is disgusting... Our politicians should be ashamed." Among the products Pfizer makes-- in case you're thinking about not doing business with them anymore-- are Advil, Lipitor, Viagra, Preparation H, Lyrica (which rarely works anyway and should be avoided), Zoloft, Chantix, Diflucan, Xanax, Celebrex, Zithromax and Prevnar. Some of the better known products Allergen makes are Botox, Linzess, and Restasis.

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