Pfizer is trying to get out of paying billions in taxes. Bernie Sanders isn’t having any of it.
In an official press release, Sanders and his U.S. Senate colleague Tammy Baldwin (D-WI) called on Treasury Secretary Jack Lew to intervene to stop the drug manufacturer from avoiding taxes through a complex tax scheme called transfer pricing.
Through transfer pricing, Pfizer would identify as an Irish corporation for tax purposes by merging with Allergan, a newly acquired pharmaceutical company based in Ireland. Even though Pfizer makes its products in the US, uses American labor to manufacture and test its products, and depends on American infrastructure for everything from research and development to transportation, Pfizer would pay the Irish tax rate on its US profits. The move is estimated to deprive the U.S. Treasury of $35 billion in tax revenue on profits exceeding $118 billion.
“I find it ironic that some of my Republican colleagues, in their internal budget negotiations, claim that $30 billion in deficit-reduction is required for the coming fiscal year,” Sanders said in the release. “Preventing the inversion planned by just one company, Pfizer, could produce more deficit-reduction than the cuts they are demanding.”
Sanders cited a February 2016 study conducted by Americans for Tax Fairness (ATF), which concluded that Pfizer’s tax dodge could fund the National Cancer Institute for seven years. ATF also learned that Pfizer, which makes Celebrex, Lipitor, Lyrica, and Viagra, is wildly profitable, having increased profit margins by 50 percent since 2011.
In addition to the money the prescription drug kingpin makes from pharmaceutical sales, Pfizer also made $5 billion from contracts with the U.S. government in the past five years. And due to tax credits for CEO bonuses, American taxpayers have coughed up $21 million in subsidies to Pfizer executive salaries and bonuses.
Sanders introduced the Corporate Tax Dodging Prevention Act in 2015 to close the multiple tax loopholes regularly exploited by multinational corporations. Ending corporate tax avoidance is a key plank of Sanders’ presidential platform, and the Vermont senator claims the money made from ending corporate tax avoidance could also be used to fund a widespread public sector jobs program