Companies Dodge $60 Billion in Taxes Even Tea Party Condemns

[Newsjock]

Source: Bloomberg

Tyler Hurst swiped his debit card at a Walgreens pharmacy in central Phoenix and kicked off an international odyssey of corporate tax avoidance.

Hurst went home with an amber bottle of Lexapro, the world’s third-best selling antidepressant. The profits from his $99 purchase began a 9,400-mile journey that would lead across the Atlantic Ocean and more than halfway back again, to a grassy industrial park in Dublin, a glass skyscraper in Amsterdam and a law office in Bermuda surrounded by palm trees.

While Forest Laboratories Inc., the medicine’s maker, sells Lexapro only in the U.S., the voyage ensures most of its profits aren’t taxed there -- and they face little tax anywhere else. Forest cut its U.S. tax bill by more than a third last year with a technique known as transfer pricing, a method that carves an estimated $60 billion a year from the U.S. Treasury as it combines tax planning and alchemy.

... Transfer pricing lets companies such as Forest, Oracle Corp., Eli Lilly & Co. and Pfizer Inc., legally avoid some income taxes by converting sales in one country to profits in another -- on paper only, and often in places where they have few employees or actual sales.

... “Transfer pricing is the corporate equivalent of the secret offshore accounts of individual tax dodgers,” said Sen. Carl Levin, a Michigan Democrat and chairman of the Senate’s Permanent Subcommittee on Investigations, in a statement to Bloomberg News. Levin has overseen hearings on tax shelters including those sold to wealthy people by KPMG LLP. “Now that progress has been made in addressing offshore tax abuse by individuals, transfer pricing is an issue that deserves scrutiny.”

Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=a7td7E8_4EeI&pos=10

[pnorman]

1. Try this URL

http://www.bloomberg.com/apps/news?pid=20601109&sid=a7td7E8_4EeI&pos=10

[Oldtimeralso]

2. OMG.

How can these loopholes be allowed. American company my ass! This must be stopped. It needs to be made public, how with the corporate media I don't know? Can a list of the companies doing this be made and passed along.
As a proud American union member I am constantly searching to "Buy American" if possible but not from these bastards. This problem should not be a partisan issue. It is an American issue!

[tomm2thumbs]

3. if Democrats don't cut loose this corporate trickery and start dealing with these things directly

then we have truly lost their way on the high road - to making this country what it should be

[JDPriestly]

4. We all need to be able to explain this to our right-wing family and friends.

This is the key to our deficits.

This is why we need a value added tax in this country. The companies will either have to raise their prices beyond what people will pay or lower them so that the government's VAT can be paid while maintaining the current overall price (the price of the product plus the VAT).

[SocialistLez]

6. I'm on the fence with the VAT. I mainly see it as regressive. NT

[JDPriestly]

11. OK, if we don't bring in the VAT, how can we

a) get a share of the taxes that companies refuse to pay on products and services they sell in the U.S.
b) compete in manufacturing and exports with nations like those in Europe who subsidize their economies with VAT taxes
c) make sure that our products can compete in our own markets.

As to c), my point is that we can reduce taxes that companies that hire Americans to manufacture goods and provide services to balance out the VAT taxes.

We are stupid not to impose VAT taxes when other countries are doing it.

If you exempt food, children's clothing and certain other necessities from VAT taxes, the tax is not that regressive. Low-income people do not spend a lot of money on consumer goods. They mostly spend it on food and children's clothing.

[SocialistLez]

12. If you exempt those items, I'm cool with it.

Thank you for your perspective. =]

[Scuba]

5. But if the poor paid more taxes, the rich could keep their money...

...then it would 'trickle down' to the poor. See?

[Javaman]

7. Wow, even the tea baggers? NOW I will read it...

:eyes:

giving credence to a moronic group because they are a member of the broken clock is right twice a day brigade is just insane. As if their opinion matters in any sane discussion.

[Blue_Tires]

8. kick

[Teka]

9. Disgusting practice - these loopholes need to end, now

[OhioChick]

10. K&R n/t