Democratic presidential frontrunner Hillary Clinton has blasted the proposed merger between two huge pharmaceutical companies.
Clinton claims that the merger of Pfizer and Allergan will “leave U.S. taxpayers holding the bag” as the massive new firm sets up headquarters in Ireland in order to avoid paying U.S. taxes.
Pfizer-Allergan will be headquartered abroad to reduce U.S. tax bill
The merger will create the largest drug company in the world, and one that aims to reduce its contribution to the U.S. tax base as much as possible. Companies continue to engage in a practice known as “inversion,” in which business is conducted in the U.S. but the legal headquarters is elsewhere in order to reduce taxes.
Under President Obama officials have made concerted efforts to combat the practice, but no full solution has been found. Clinton aims to change that if she is elected as the next U.S. president in 2016.
“For too long, powerful corporations have exploited loopholes that allow them to hide earnings abroad to lower their taxes. Now Pfizer is trying to reduce its tax bill even further,” Mrs. Clinton said in a statement.
Clinton aims to end corporate inversions if elected
“This proposed merger, and so-called ‘inversions’ by other companies, will leave U.S. taxpayers holding the bag. As President, I will fight to reform our tax system to reward growth, innovation, and job creation here in the United States. We cannot delay in cracking down on inversions that erode our tax base,” she added.
In addition Clinton said that she will release details of specific policy proposals that will combat inversions and preserve the U.S. tax base.
Republican presidential candidate Donald Trump claimed that the deal provided further evidence that the U.S. tax code needs to be changed. “These corporate inversions take capital and, more importantly, jobs offshore,” he said in a statement. “We need leadership in Washington to get the tax code changed so companies will be coming to America, not looking for ways to leave.”
Carl Icahn, a billionaire investor and endorser of Trump, claimed that a Pfizer-Allergan merger would mean that the U.S. loses its 10th biggest company to Ireland. Icahn has also invested $150 million in a political action committee advocating tax reform to eliminate inversions.