House Democrats Urge Administration to Take Immediate Action to Stop Corporate Inversions following Report on Extent of Pfizer Tax Dodging and Price Gouging
Washington— Today, several Democratic Members of Congress, along with the Executive Director of Americans for Tax Fairness, Frank Clemente, released a major new report on the extent of Pfizer’s tax dodging and price gouging, as well as a letter to Treasury Secretary Jack Lew urging the Administration to use its executive authority to deny the tax benefits of the proposed corporate inversion. Seven senators, led by Assistant Majority Leader Richard Durbin, sent a similar letter to Secretary Lew today as well.
“As a small business owner for over 29 years, I am especially concerned about big corporations that pay their accountants rather than paying their taxes,” said Representative Mark Pocan (WI-02). “Main street businesses play by the rules and pay their fair share continue footing the bill for offshore tax dodging corporations. This is exactly the sort of egregious corporate activity undermines the U.S. tax base and our economy and we urge the Administration to crack down on it.”
“Pfizer is not only America’s biggest pharmaceutical company, but also one of our biggest tax dodgers and price gougers. To finagle even more tax avoidance, Pfizer now wants to renounce its American citizenship. While Pfizer wants to pay lower Irish taxes, it refuses to charge Americans lower Irish drug prices,” said Congressman Lloyd Doggett (TX-35). “Today we are issuing a formal plea for specific Administration action, backed up with line and verse regarding how that can be accomplished. The US Treasury is suffering from a form of severe bleeding that no overpriced Pfizer medication can stop, but to the Administration, we say use existing law, ‘heal thyself.’”
“As if gouging the American people with overpriced prescription drugs wasn’t enough, Pfizer is now trying to dodge $35 billion in taxes. You can’t make this up.” said Rep. Peter Welch (VT-. “Pharmaceutical companies provide good drugs that are life-saving and pain-reliving, but their prices are killing us. And now, Pfizer wants to pay Irish taxes but they won’t give Americans Irish drug prices. The Administration should throw a monkey wrench into Pfizer’s plan, stat.”
“American taxpayers are fed up with big corporations shifting their tax obligations onto working families because Congress has failed to close the egregious inversion loophole,” said Congressman Chris Van Hollen (MD-8). “We cannot continue to allow companies to shortchange hard working Americans simply by changing their mailing address. We must work to end this egregious loophole and the tax games inverted companies play using every means at our disposal.”
Pfizer—maker of Celebrex, Lipitor, Lyrica, and Viagra—is attempting to permanently dodge an estimated $35 billion of U.S. taxes it currently owes by merging with Allergan, a drug firm based in Ireland, according to a new Americans for Tax Fairness report that was released today. The report also documents a rapid rise in Pfizer’s prescription drug prices in recent years, and it compares the vast difference in the prices Pfizer charges for the same drugs in the U.S. and in Ireland, the country to which it is changing its corporate address.
“By dodging taxes while boosting prescription drug prices, Pfizer squeezes American families and communities from two sides at once,” said Americans for Tax Fairness Executive Director Frank Clemente. “In the company’s biggest insult to America yet, Pfizer’s merger would allow it to go on enjoying all the benefits of being based here—everything from a publicly-educated workforce, to an excellent communications infrastructure, to a reliable patent system—without adequately paying to support them.”
“We cannot continue to allow Pfizer and other corporations to pretend that they are American companies, reaping the benefits this country has to offer, all while claiming to be another nationality when the tax bill comes,” said Congresswoman Rosa DeLauro (CT-03). “Corporations are cheating the American people out of revenue that could make a real difference in the lives of children and families, so that they can dodge taxes and gouge prices. The Administration must take action, but Congress also needs to work to stop inversions. We must do better.”
The tax benefits of these corporate inversions could be denied if Treasury revises a Notice it issued in 2014 intended to remove costly tax breaks U.S. companies receive when they merge or invert with a foreign company based in a tax haven. Johnson Controls had $8.1 billion in offshore profits in 2015 on which it will likely be able to avoid paying U.S. income taxes should the proposed merger be completed.
“What Pfizer is doing to the American taxpayer is not only unfair, it’s unpatriotic. Our country invests in research and innovation,” said Congresswoman Jan Schakowsky (IL-9). “We invest in education. Those public investments are major reason why companies like Pfizer find the workforce they need and develop new drugs. This new report from Americans for Tax Fairness shows how Pfizer takes advantage of all of this public investment, gouges consumers on drug prices and then seeks to move its profits overseas to avoid taxes while still reaping the rewards of public investment in the United States. This is simply unacceptable.”