5 ms·

American pharmaceutical companies aren't paying tax in the U.S.

60 points by luu 2y ago

deleted 2y ago
[deleted]
mnemotronic 2y ago
I hope this isn't true. I'm very upset reading this.
- billy99k 2y ago
  Why? Many are reporting losses. Do you expect them to pay taxes on something other than profit?
  - like_any_other 2y ago
    > reporting losses "According to Lucasfilm, Return of the Jedi (1983) "has never gone into profit", despite having earned $475 million at the box office against a budget of $32.5 million." - https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting
    - kylehotchkiss 2y ago
      All this while our country has already cut antiretrovirals for children in Africa with zero warning or opportunity for private org or another country to take over. Our legacy as a country is going to look pretty gross.
      - gottorf 2y ago
        Yeah, pretty gross of the American taxpayer to not work harder to make you feel better about yourself being an American.
        ashoeafoot 2y ago
        Your son is a sex tourist, your daughter has it from a hostel stay too and you got it frim agnes, the secretary. And yes, your dick may rot off, cause everyone in the world is 5 "IdontGiveAFucks" away from it. Inability to deal with a complex world does not make it go away. Its like stopping to pay rent to saving up for a house.
      - octopoc 2y ago
        America shouldn’t have been spending money on that in the first place. Our role in this world should be to put ourselves first, just like every country is already putting themselves first.
        snypher 2y ago
        Why do we keep giving money to that one country then? Because the political benefits pay off for the politicians. So those same benefits could apply from foreign medical aid, but we don't value helping others less fortunate?
        wao0uuno 2y ago
        I find it both hilarious and sad that people are afraid to say Israel these days.
        octopoc 2y ago
        Ugh I hate that as well! But unfortunately they have bought our politicians. I’m hoping that after Trump both sides can bow up popular pressure to stop supporting them. In younger generations in both the left and right there is less star struck awe at the mention of that country, so I’m hopeful.
        maxerickson 2y ago
        Never mind that spending small sums of money to help control disease in other countries is pretty beneficial to America, diseases don't respect imaginary border walls.
        gottorf 2y ago
        > diseases don't respect imaginary border walls A non-imaginary border wall might work, then. Control the movement of the vectors of disease and you control the spread of the disease.
        consteval 2y ago
    - parineum 2y ago
      The implications of this is that that money was never taxed which is likely untrue. Just because the money left Lucasfilm, doesn't mean it wasn't taxed. There's a reason why the IRS isn't going after them. So called "Hollywood accounting" is a lot more about screwing actors out of royalties than it is about not paying taxes
      - like_any_other 2y ago
        The implication is that "reported losses" don't have anything to do with actual losses. Citing the corporations creative accounting results convinces no-one.
  - financetechbro 2y ago
    This is all just accounting nonsense and tax loopholes. Did you even read the article? FTA: > Merck reported a loss of almost $2 billion in the U.S. while making $22 billion abroad. Johnson and Johnson reported losing just under $500 million in the U.S. while making $17 billion abroad. Pfizer reported U.S. losses of around $500 million while making $9 billion abroad. AbbVie apparently lost nearly $8 billion in the U.S. while making over $11 billion abroad (mostly in Bermuda) and Bristol Myers Squibb reported a loss of $15 billion in the U.S. (tied to the accounting of an acquisition) and $6.5 billion of foreign profits.
yieldcrv 2y ago
This is a well researched article, my main disagreement in this field is the hubris necessary to even think greater tax receipts are the goal, and this is reflected in the language choice. I think this is a blind spot as it seems the only people interested would be those hoping for some kind of "tax justice" which taps into a popular sentiment: people choosing to wonder why we aren't being screwed equally, instead of wondering why we are being screwed at all. I get it, your tax bill comes and is inconvenient, someone else in a seemingly higher tax bracket seems to leverage a card or chess move that you don't have the ability to pursue. But this is all a red herring. To the Supreme Court, choosing to go to a gas station in a neighboring town for lower tax rates is just as valid as doing what some multinational does for lower tax rates by having a nominal structure in another country. (And that's from the Supreme Court you actually liked!) The aggregate priority of the US government is velocity within the economy. The speed that money moves within the economy, not the revenue collection from [ostensibly] facilitating it. And even detractors to this reality can never reach agreement on what a "fair share" is. A completely arbitrary and undefined sentiment, based on a misunderstanding of the world and that individual's own socioeconomic status or outright mediocrity. What is the most interesting is that these multinationals are sometimes paying tax somewhere else. Like the article mentions about how they are currently paying Denmark at 22% and have an inability to deduct enough. Ultimately, the state needs to figure out their revenues, taxing earnings is not the only way to do that and its only controversial to say that because some states can't balance their budget without it, and yet, others can by providing a good or service people are willing to pay for.
- like_any_other 2y ago
  Can you explain why you think wanting everyone to comply with the spirit of the (tax) law is "hubris"?
  - yieldcrv 2y ago
    I wound say the reaction when people don’t meet an observer’s understanding of “spirit” is where the hubris arises And I explained that earlier: people want others to suffer as much as them. But it doesn't make any sense. The government isn't entitled to your productivity, assuming otherwise is where the hubris arises. I mean look at the name of the regulation that was passed for using offshore entities: GILTI (“guilty”). And now it is ironically being used to nullify tax receipts. But the United States isnt entitled to be the recipient of all capital and productivity. No state is. It doesn't matter that they offer some semblance of stability and infrastructure, that doesnt justify any particular percentage. Their funding problem doesnt justify any particular percentage. Thats where the hubris becomes apparent.
bell-cot 2y ago
Um, yes? My impression is that huge corporations in a wide variety of industries are using various dodges to more-or-less avoid paying US taxes. (But they are paying their US lobbyists and politicians quite generously, so this situation isn't likely to change.)
bamboozled 2y ago
Sometimes it seems like the only people who actually pay tax are middle class, full-time employees. All my friends, even who have random part times businesses just seem like they have a lot more spare cash floating around than me. It's the only explanation I have, they're not being honest about the tax they pay and mostly getting away with it. If I had 40% more income I'd be cruising pretty nicely too.
- edmundsauto 2y ago
  This is a keeping up with the joneses tale. People with flashier spending habits often have rotten savings habits. Never judge yourself by what other people show you.
  - trdtaylor1 2y ago
    In a way; but even 'savings' are easily manipulated with business vs w2 income. You can do mega 401k contributions (60k-100k+ per year dependent on circumstances), can roll to IRA, use a self-directed ira for further investments in family land or businesses ($millions per year). Management companies in different states/countries work wonders to drop your tax and increase money you can spend. Even small guys $1mil rev are doing things like a Dubai management company nesting. article hinted at it via the IP onshoring talk.
  - bamboozled 2y ago
    Personally I just think it's the reality. The bulk of busy tax payers are middle income earners who just do the honest thing and don't have the time available to workout how to rort the system. Once you have enough disposable incoming, you can start to pay accountants to do money magic for you.
colingauvin 2y ago
>This, of course, is a big charade. The cost of producing a drug is low relative to its sales price (gross margins are high, see the pharmaceutical companies’ 10-Ks!) A drug is not a widget. You can't just make one. Almost all drug programs end in abject failure, usually far before even the clinical trial phase. Gross margins have to be high because you have to pay for 10 failed programs with the successful one. And one reason that profits are low in the US because that's where there R&D happens.
- sebazzz 2y ago
  I don't think we need to have any empathy for drug companies which acquire existing drugs and then bump the price multiple times.
- DrNosferatu 2y ago
  Big Pharma profits low in the US? Please. Their R&D happens wherever talent is cheapest, their tax havens wherever laws are loosest, and their profits—record-breaking year after year—safely deposited wherever shareholders are happiest. If only their medicines were as creative as their accounting. The real innovation is their business model: socialize the research costs, privatize the profits. Billions in taxpayer dollars fund the basic science, university labs, and early clinical trials that underpin 'breakthrough' drugs. Yet when these public investments strike gold, not a penny in dividends flows back to the public coffers that made it possible. Instead, we pay twice—first through our taxes to develop the drugs, then through world-leading prices to access them. That's not capitalism; that's a publicly-subsidized monopoly.
  - WeylandYutani 2y ago
    Exactly. We don't live in a cyberpunk world were corporations run their own universities and have their own private army. Everything that allows a company to exist- from electricity to roads to law enforcement of patents is funded by taxpayers.
    - ashoeafoot 2y ago
physicsguy 2y ago
The US blocked the treaty which would have prevented companies getting a meaningful benefit from profit shifting by agreeing a minimum corporate tax rate https://www.business-standard.com/world-news/donald-trump-effectively-pulls-us-out-of-global-corporate-tax-deal-125012100280_1.html https://www.business-standard.com/world-news/donald-trump-ef...

60 points by luu 2y ago

deleted 2y ago

[deleted]

mnemotronic 2y ago

I hope this isn't true. I'm very upset reading this.

billy99k 2y ago
Why? Many are reporting losses. Do you expect them to pay taxes on something other than profit?
- like_any_other 2y ago
  > reporting losses "According to Lucasfilm, Return of the Jedi (1983) "has never gone into profit", despite having earned $475 million at the box office against a budget of $32.5 million." - https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting
  - kylehotchkiss 2y ago
    All this while our country has already cut antiretrovirals for children in Africa with zero warning or opportunity for private org or another country to take over. Our legacy as a country is going to look pretty gross.
    - gottorf 2y ago
      Yeah, pretty gross of the American taxpayer to not work harder to make you feel better about yourself being an American.
      - ashoeafoot 2y ago
        Your son is a sex tourist, your daughter has it from a hostel stay too and you got it frim agnes, the secretary. And yes, your dick may rot off, cause everyone in the world is 5 "IdontGiveAFucks" away from it. Inability to deal with a complex world does not make it go away. Its like stopping to pay rent to saving up for a house.
    - octopoc 2y ago
      America shouldn’t have been spending money on that in the first place. Our role in this world should be to put ourselves first, just like every country is already putting themselves first.
      - snypher 2y ago
        Why do we keep giving money to that one country then? Because the political benefits pay off for the politicians. So those same benefits could apply from foreign medical aid, but we don't value helping others less fortunate?
        wao0uuno 2y ago
        I find it both hilarious and sad that people are afraid to say Israel these days.
        octopoc 2y ago
        Ugh I hate that as well! But unfortunately they have bought our politicians. I’m hoping that after Trump both sides can bow up popular pressure to stop supporting them. In younger generations in both the left and right there is less star struck awe at the mention of that country, so I’m hopeful.
      - maxerickson 2y ago
        Never mind that spending small sums of money to help control disease in other countries is pretty beneficial to America, diseases don't respect imaginary border walls.
        gottorf 2y ago
        > diseases don't respect imaginary border walls A non-imaginary border wall might work, then. Control the movement of the vectors of disease and you control the spread of the disease.
        consteval 2y ago
  - parineum 2y ago
    The implications of this is that that money was never taxed which is likely untrue. Just because the money left Lucasfilm, doesn't mean it wasn't taxed. There's a reason why the IRS isn't going after them. So called "Hollywood accounting" is a lot more about screwing actors out of royalties than it is about not paying taxes
    - like_any_other 2y ago
      The implication is that "reported losses" don't have anything to do with actual losses. Citing the corporations creative accounting results convinces no-one.
- financetechbro 2y ago
  This is all just accounting nonsense and tax loopholes. Did you even read the article? FTA: > Merck reported a loss of almost $2 billion in the U.S. while making $22 billion abroad. Johnson and Johnson reported losing just under $500 million in the U.S. while making $17 billion abroad. Pfizer reported U.S. losses of around $500 million while making $9 billion abroad. AbbVie apparently lost nearly $8 billion in the U.S. while making over $11 billion abroad (mostly in Bermuda) and Bristol Myers Squibb reported a loss of $15 billion in the U.S. (tied to the accounting of an acquisition) and $6.5 billion of foreign profits.

yieldcrv 2y ago

This is a well researched article, my main disagreement in this field is the hubris necessary to even think greater tax receipts are the goal, and this is reflected in the language choice. I think this is a blind spot as it seems the only people interested would be those hoping for some kind of "tax justice" which taps into a popular sentiment: people choosing to wonder why we aren't being screwed equally, instead of wondering why we are being screwed at all. I get it, your tax bill comes and is inconvenient, someone else in a seemingly higher tax bracket seems to leverage a card or chess move that you don't have the ability to pursue. But this is all a red herring. To the Supreme Court, choosing to go to a gas station in a neighboring town for lower tax rates is just as valid as doing what some multinational does for lower tax rates by having a nominal structure in another country. (And that's from the Supreme Court you actually liked!) The aggregate priority of the US government is velocity within the economy. The speed that money moves within the economy, not the revenue collection from [ostensibly] facilitating it. And even detractors to this reality can never reach agreement on what a "fair share" is. A completely arbitrary and undefined sentiment, based on a misunderstanding of the world and that individual's own socioeconomic status or outright mediocrity. What is the most interesting is that these multinationals are sometimes paying tax somewhere else. Like the article mentions about how they are currently paying Denmark at 22% and have an inability to deduct enough. Ultimately, the state needs to figure out their revenues, taxing earnings is not the only way to do that and its only controversial to say that because some states can't balance their budget without it, and yet, others can by providing a good or service people are willing to pay for.

like_any_other 2y ago
Can you explain why you think wanting everyone to comply with the spirit of the (tax) law is "hubris"?
- yieldcrv 2y ago
  I wound say the reaction when people don’t meet an observer’s understanding of “spirit” is where the hubris arises And I explained that earlier: people want others to suffer as much as them. But it doesn't make any sense. The government isn't entitled to your productivity, assuming otherwise is where the hubris arises. I mean look at the name of the regulation that was passed for using offshore entities: GILTI (“guilty”). And now it is ironically being used to nullify tax receipts. But the United States isnt entitled to be the recipient of all capital and productivity. No state is. It doesn't matter that they offer some semblance of stability and infrastructure, that doesnt justify any particular percentage. Their funding problem doesnt justify any particular percentage. Thats where the hubris becomes apparent.

bell-cot 2y ago

Um, yes? My impression is that huge corporations in a wide variety of industries are using various dodges to more-or-less avoid paying US taxes. (But they are paying their US lobbyists and politicians quite generously, so this situation isn't likely to change.)

bamboozled 2y ago

Sometimes it seems like the only people who actually pay tax are middle class, full-time employees. All my friends, even who have random part times businesses just seem like they have a lot more spare cash floating around than me. It's the only explanation I have, they're not being honest about the tax they pay and mostly getting away with it. If I had 40% more income I'd be cruising pretty nicely too.

edmundsauto 2y ago
This is a keeping up with the joneses tale. People with flashier spending habits often have rotten savings habits. Never judge yourself by what other people show you.
- trdtaylor1 2y ago
  In a way; but even 'savings' are easily manipulated with business vs w2 income. You can do mega 401k contributions (60k-100k+ per year dependent on circumstances), can roll to IRA, use a self-directed ira for further investments in family land or businesses ($millions per year). Management companies in different states/countries work wonders to drop your tax and increase money you can spend. Even small guys $1mil rev are doing things like a Dubai management company nesting. article hinted at it via the IP onshoring talk.
- bamboozled 2y ago
  Personally I just think it's the reality. The bulk of busy tax payers are middle income earners who just do the honest thing and don't have the time available to workout how to rort the system. Once you have enough disposable incoming, you can start to pay accountants to do money magic for you.

colingauvin 2y ago

>This, of course, is a big charade. The cost of producing a drug is low relative to its sales price (gross margins are high, see the pharmaceutical companies’ 10-Ks!) A drug is not a widget. You can't just make one. Almost all drug programs end in abject failure, usually far before even the clinical trial phase. Gross margins have to be high because you have to pay for 10 failed programs with the successful one. And one reason that profits are low in the US because that's where there R&D happens.

sebazzz 2y ago
I don't think we need to have any empathy for drug companies which acquire existing drugs and then bump the price multiple times.
DrNosferatu 2y ago
Big Pharma profits low in the US? Please. Their R&D happens wherever talent is cheapest, their tax havens wherever laws are loosest, and their profits—record-breaking year after year—safely deposited wherever shareholders are happiest. If only their medicines were as creative as their accounting. The real innovation is their business model: socialize the research costs, privatize the profits. Billions in taxpayer dollars fund the basic science, university labs, and early clinical trials that underpin 'breakthrough' drugs. Yet when these public investments strike gold, not a penny in dividends flows back to the public coffers that made it possible. Instead, we pay twice—first through our taxes to develop the drugs, then through world-leading prices to access them. That's not capitalism; that's a publicly-subsidized monopoly.
- WeylandYutani 2y ago
  Exactly. We don't live in a cyberpunk world were corporations run their own universities and have their own private army. Everything that allows a company to exist- from electricity to roads to law enforcement of patents is funded by taxpayers.
  - ashoeafoot 2y ago

physicsguy 2y ago

The US blocked the treaty which would have prevented companies getting a meaningful benefit from profit shifting by agreeing a minimum corporate tax rate https://www.business-standard.com/world-news/donald-trump-effectively-pulls-us-out-of-global-corporate-tax-deal-125012100280_1.html https://www.business-standard.com/world-news/donald-trump-ef...