GOP PROVISION IN CARES ACT GIVES DRUG FIRMS MAJOR TAX REDUCTIONS FROM OPIOID CRISIS SETTLEMENTS

0
GOP PROVISION IN CARES ACT GIVES DRUG FIRMS MAJOR TAX REDUCTIONS FROM OPIOID CRISIS SETTLEMENTS
TheDigitalWay / Pixabay

(Washington, DC) Today, the Washington Post reported that four big drug companies plan to deduct opioid-abuse legal settlements from their corporate taxes, saving each company roughly $1 billion, at the expense of American taxpayers. And those deductions are supercharged thanks to a provision in the coronavirus-relief CARES Act enacted last March.

Play Quizzes 4

 

Companies generally may not write off amounts paid in legal settlements of criminal or civil fines. But they can write off payments made in legal settlements if those payments are defined as “restitution.” All four companies apparently structured their settlements to seize on that exception.

London Quality Growth Investor Conference: Buy Dassault Systemes

invest Southpoint CapitalAt this year's inaugural London Quality Growth Investor conference, Denis Callioni, analyst and portfolio manager at European investment group Comgest, highlighted one of the top ideas of the Comgest Europe Growth Fund. According to the speaker, the team managing this fund focus on finding companies that have stainable growth trajectories with a proven track record Read More

 

The CARES Act included a provision allowing companies to apply losses from recent years against profits from earlier years, including years prior to 2018, when the corporate tax rate was two-thirds higher than it is now. By applying the loss to those higher-taxed years and amending those prior-year tax returns, the companies pocket bigger refunds then they would ordinarily be entitled to. 

 

The fact that huge companies implicated for their role in the tragic opioid epidemic  can write off the cost of their wrongdoing is unconscionable,” stated Frank Clemente, Executive Director of Americans for Tax Fairness. “It’s even worse that up to 40% of the unjust tax breaks Cardinal Health, Johnson & Johnson, and other pharmaceutical manufacturers and distributors are seeking are permissible only because of the giveaway the GOP snuck into the CARES Act, which was supposed to be about addressing peoples’ basic needs in the pandemic.  Congress should immediately repeal this huge tax cut for these companies and other wealthy business owners.”

The Post story reads:

“In one example, Dublin, Ohio-based drug distributor Cardinal Health said earlier this month it planned to collect a $974 million cash refund because it claimed its opioid-related legal costs as a “net operating loss carryback” — a tax provision Congress included in last year’s coronavirus bailout package as a way of helping companies struggling during the pandemic.

 

“It is past time for Congress to serve the people, not the special interests, especially those companies that have contributed to drug addiction and deaths,” added Clemente.

Updated on

Anna Peel is a professional writer. In the past four years, she has written for many websites including BSC Kids, Wasabi Media Group, Boomtron, and many others. She currently live in Savannah, Georgia and occasionally blogs about fashion during her free time.
Previous article The Story of GameStop Stock
Next article The Latest on Economic Volatility Created by the Pandemic

No posts to display