US companies look overseas for tax bill relief

[Judi Lynn]

Source: Associated Press

Jul 14, 3:43 PM EDT
US companies look overseas for tax bill relief
By TOM MURPHY
AP Business Writer

A growing number of U.S. companies are looking to trim their tax bills by combining operations with foreign businesses in a trend that may eventually cost the federal government billions of dollars in revenue.

Generic drugmaker Mylan Inc. said Monday it will become part of a new company organized in the Netherlands in a $5.3 billion deal to acquire some of Abbott Laboratories' generic-drugs business. The deal is expected to lower Mylan's tax rate to about 20 percent to 21 percent in the first full year and to the high teens after that.

The Canonsburg, Pennsylvania-company's deal follows a path explored by several other U.S. drugmakers in recent months. AbbVie Inc. has entered talks with Shire Plc. over a roughly $53.68 billion deal that would lead to a lower tax rate and a company organized on the British island of Jersey.

But drugmakers aren't the only companies looking overseas for better tax deals.

Last month, U.S. medical device maker Medtronic Inc. said that it had agreed to buy Ireland-based competitor Covidien for $42.9 billion in cash and stock. The combined company would have executive offices in Ireland, which has a 12.5 percent corporate income tax rate. And drugstore chain Walgreen Co. - which bills itself as "America's premier pharmacy" - also is considering a similar move with Swiss health and beauty retailer Alliance Boots.



Read more: http://hosted.ap.org/dynamic/stories/U/US_OVERSEAS_DEALS_TAX_BREAKS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-14-15-43-24

[7962]

1. So do we want revenue or rates that make us "feel good"?

LOWER the tax rate and drop the deductions. Its that damn simple. Govt gets more money and more of it stays here.

[LoisB]

6. How many of them pay anything at all now?

[7962]

7. Some pay none, smaller ones pay most, but US has the 2nd highest corp rate in the world

Not to mention one of the few if not the only country that double taxes foreign profits. Which is why corps will hire a bunch lawyers to get out of them.
Cut the rate, wipe out deductions, and this will stop. More money spent here instead of keeping it over there, wherever "there" is.

[PSPS]

8. Simply not true

The effective tax rate (i.e., the tax rate actually paid) in the US is among the lowest in the world. And the "double taxes foreign profits" is a worn out RW distortion which, of course, is also not true.

If these companies want to become "overseas" companies, that can be easily accommodated with tariffs, which we used to have before Reagan and which every other country still has.

[7962]

9. Then raise the rate to 50%. The end result is the same; low revenue. Unless you do what I said.

Get rid of the deductions and cut the rate in half. It looks good to foreign companies and the govt gets MORE revenue. No more hundreds of lawyers looking for every little loophole to avid paying.
As I said to start with, do you want more govt revenue or a tax rate that makes you feel good?

[msongs]

2. great! companies that do this should be treated as 100% foreign owned and run, which they will be nt

[TygrBright]

3. How patriotic! n/t

[L0oniX]

4. Eventually they will pay no taxes ...anywhere.

Only the serfs will pay taxes ...that is the plan.

[americannightmare]

5. Who are these companies?

If we don't boycott them, we only have ourselves to blame. Clearly the government isn't going to lift a finger to stop them.

[sinkingfeeling]

10. They're looking to line the pockets of the 1% while shafting America.