WASHINGTON, D.C.—Frank Clemente, executive director of Americans for Tax Fairness, made the following statement in response to the termination of Pfizer and Allergan’s planned merger, which would have resulted in the New York City-based Pfizer becoming an Irish corporation:
“The prevention of Pfizer’s inversion is great news for all American taxpayers: individuals, small businesses and large domestic corporations. Pfizer’s inversion would have meant that the pharmaceutical giant could have dodged as much as $35 billion it already owes in U.S. taxes on its offshore profits.
“Big corporations like Pfizer must be required to pay their fair share. The government cannot let them run away from their responsibilities to this nation. Treasury has taken an important step to improve the overall corporate tax system. These rules move in the right direction to level the playing field for domestic companies competing with multinationals.
“The end of the Pfizer-Allergan merger came after new anti-inversion regulations issued by the U.S. Treasury Department removed most of the tax benefit Pfizer was seeking in this merger.
“We are very encouraged by the new earnings stripping rules established by the Treasury Department, and believe they will take away a lot of the tax benefits sought by inverting U.S. corporations.
“However, we are concerned that the scope of the proposed regulation dealing with serial inverters is too narrow and would not apply to most U.S. corporations hoping to take advantage of the same ‘hopscotch loan’ tax loophole that Pfizer intended to exploit. A coalition of 55 organizations recently sent a letter to Treasury Secretary Lew urging stronger action to close this loophole.”
Americans for Tax Fairness is a diverse coalition of 425 national and state endorsing organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.