By William Rice, Policy Consultant, Americans for Tax Fairness
The creator of Prozac is depressed about America’s economic competitiveness.
In a recent blog post, pharmaceutical giant Eli Lilly & Company (whose current products also include anti-depressant Cymbalta and Humalog insulin) claims that the U.S. is lagging globally on economic growth, and that high corporate taxes are the culprit.
The only thing is: We’re actually competing quite well globally, according to the very study Lilly cites. In the World Economic Forum competitiveness ranking, the U.S. came in fifth out of 148 nations, right behind Germany, the only other big country in the top five—and way ahead of low- or no-tax countries like Ireland and Bermuda.
What’s more, the ranking criteria include the quality of infrastructure and education — the kind of public investments we can only afford with effective taxation. That includes taxes from big multinational corporations like Lilly. Corporate tax rates were not among the dozen criteria judged.
But Lilly is hardly an expert on America’s official corporate tax rate of 35 percent, anyway. In several recent years it’s paid nothing close to it. Between 2008 and 2010, it paid just 4 percent in federal income taxes on $5 billion in profits, according to the watchdog group Citizens for Tax Justice. In 2008, the refund check it got from Uncle Sam was bigger than its net earnings.
If we really want to move up the world economic rankings—and more importantly, address the economic needs of middle-class working families—we need to stop the corporate tax dodging of corporations like Eli Lilly.