"You saw the excerpts from financial statements of several companies."
I don't think those excerpts mentioned "Federal Taxes". Likely they referred to the (what was it? 4 1/2 per cent) that the Puerto Rican Territory collects?
I cited you Joint Committee reports, articles from neutral and not neutral journalists, and so forth. I'm not really in the mood to phone Merck on a Sunday to ask how well they've done putting together their financials.
Puerto Rican Pharmaceuticals DO NOT pay Federal Taxes and they DO NOT pay import duties back to the mainland. They DO pay a small stipend to the Puerto Rican Territory.
"Lilly reported paying just $37 million in state and federal taxes last year, 1 percent of its worldwide pretax profit."
jsonline.com
OH...here is an update I just came across. They ARE now allowed to bring profits back to the U.S. if they pay a 5.25 % tax on it! According to Pfizer, you're making all your profits in International sales!! Why would they cut off our drug supplies! :-)
Pfizer, the world's largest drug company, said that in 2004 it had only $4.4 billion in pretax profit in the United States, compared with $9.6 billion internationally, though most of its sales came in the United States. The company says that its profit margins on international sales were almost three times as high as on U.S. sales.
Now how can most of a companies sales be to the American Consumer but most of their "profit" is outside the States! You had better start paying them a little more their wonderful drugs. For some reason their profit margin is 3 times higher over here in Canuck country. But we do like drugs and get polar bear sickness and all those exotic diseases targeted by Pfizer!
The biggest imbalance occurred at Eli Lilly, which reported that it had about $200 million in profit from U.S. sales in 2004, compared with $2.8 billion from sales everywhere else. LOL!!!
Do you think I'm making too much of your drug company Fat Cats? You ALL ought to be screaming bloody murder. They pocket billions in oversea havens. Lie with an invincible smirk while people sell their homes to lower their cholesterol. I just shake my head. How can such a great nation of great and wonderful people be so damn gullible.
iht.com
READ THIS THREE TIMES THOUGHTFULLY.
MONDAY, MAY 9, 2005
A new U.S. tax break for corporations is allowing the biggest American drug makers to return as much as $75 billion in profits from international havens to the United States while paying a small fraction of the normal tax rate.
The break is part of the American Jobs Creation Act, signed into law by President George W. Bush last October. It allows companies a one-year window to return their foreign profits to the United States at a 5.25 percent tax rate, compared with the standard 35 percent rate.
Any company with a profit in other countries can take advantage of the law, but the drug makers have been the biggest beneficiaries because they can move money overseas relatively easily, independent analysts say.
The money the companies are bringing home has come from many years of using legal loopholes in the tax law to aggressively shelter their profits from U.S. taxes, tax lawyers say. While the companies' tax returns are private, some information about their tax payments can be gleaned from their annual financial statements.
Those figures show that the drug makers have told the Internal Revenue Service for years that their profits come mainly from international sales, even though prescription drug prices are far higher in the United States than elsewhere and almost 60 percent of their sales take place in America.
Representatives of most of the big drug companies declined to comment beyond citing their annual reports, but in a statement, Eli Lilly said that several factors had depressed its U.S. profit, and Pfizer said that it was following the intent of the law.
Though the companies stand behind their accounting, financial analysts and tax lawyers say that the drug makers' assertions defy reality and that profit in the industry comes mostly from sales in the United States.
But the IRS lacks the resources to challenge the companies effectively, the analysts and lawyers say. As a result, the six major U.S. drug companies - Pfizer, Johnson & Johnson, Merck, Bristol-Myers Squibb, Wyeth and Lilly - collectively pay a federal tax rate of less than 15 percent on their worldwide profits, and some companies pay much less.
Already, four of the six drug makers have collectively announced plans to return $56 billion in profits to the United States. Two others say they are still considering the matter but could repatriate an additional $18 billion.
Had the six companies faced standard federal taxes on those profits, they would have paid $26 billion to the United States. Instead, they will pay less than $4 billion. Chris Senyek, an accounting analyst at Bear Stearns, said drug companies would probably account for about half of all the money repatriated by publicly traded companies.
During this window, returning money to the United States is to the advantage of the companies because they can spend the cash at home rather than having to use it overseas, as tax laws generally require.
Lawmakers have said their main intention for the law is to encourage U.S. companies to expand operations and hire workers. Congress passed the law in response to pressure from the European Union to resolve a long-running trade dispute.
Although the act is intended to create jobs, Pfizer said last month that it would cut its annual costs by $4 billion over the next three years. Pfizer, which will repatriate at least $28 billion under the act, did not say how many jobs it planned to eliminate, but analysts expect the company to shrink its work force by thousands of people.
Senyek said the law would create an insignificant number of jobs because companies could easily work around provisions in the law intended to stop them from using the money for dividends to shareholders rather than new hiring. After the break expires, companies will probably go back to stockpiling profits overseas as they wait for another tax holiday, tax lawyers say.
The major drug makers use a variety of complex but legal tactics to move profits from the United States to low-tax countries like Ireland and Singapore where they have large manufacturing operations, said H. David Rosenbloom, director for the international tax program at New York University Law School. "The law is complicated, but what's going on is perhaps less complicated," he said. "They're doing everything they can to maximize their profit in Ireland and minimize the profit in the countries where the sales occur."
The government can challenge the way the companies allocate their profits internally. But the companies have usually been able to defeat the IRS in legal battles, Rosenbloom said. "There's a limit to what they can do," he said, referring to the tax authorities, "because these cases are huge."
The companies declined to discuss specific strategies they used to minimize taxes. But the result of their efforts can be seen in a remarkable set of figures inside their annual financial reports.
Pfizer, the world's largest drug company, said that in 2004 it had only $4.4 billion in pretax profit in the United States, compared with $9.6 billion internationally, though most of its sales came in the United States. The company says that its profit margins on international sales were almost three times as high as on U.S. sales.
They are surely ripping us off taking a 300 % profit margin over fellow Americans. I surely can't afford to be ripped off like that any longer. No more erections for me. Either that or I will will get some American buddies to import me some of that inexpensive medicine before they mark it up 300% for the International Market.
Those drug companies. Gotta be the most honest class of people in the world. Integrity oozing from every pore.
Other companies reported similar trends. The biggest imbalance occurred at Eli Lilly, which reported that it had about $200 million in profit from U.S. sales in 2004, compared with $2.8 billion from sales everywhere else.
Because they report little in U.S. profit, the companies pay relatively little in American taxes. Pfizer reported paying $1.2 billion in state and federal income taxes in 2004, 9 percent of its worldwide pretax profit. Excluding a one-time payment related to its plans to repatriate money it has sheltered overseas, Lilly reported paying just $37 million in state and federal taxes last year, 1 percent of its worldwide pretax profit.
Now wouldn't you just LOVE to have a ONE % tax rate!!
You know what! I've said enough on this. You like what you got? You just keep buying the vaseline (after all you get it before the 300% mark-up for the International Market!). God knows we got our own Fat Cats and shysters down here.
CYA later, Alligator.
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