A man on Bloomberg "Surveillance said that all of the recent Pharma mergers are all designed around avoiding the excessive US corporate tax rates.
Valeant buying alergan was an example and the last huge Pharma deal was to save 6 points on taxation.
As our politician argue about welth transfers - the wealth of corporate America is sliping out of the country.
These corrupt fools had better wake up.
The time to run our country as a business and not a social experiment has arrived.
This November will be a pivotal moment in US politics - I HOPE !!
Amat merging with Tokyo Electron and becoming a Netherlands corporation is another example.
Bob
Here's the gist as Washington DC sleepe:
Executives at a California chip maker, Applied Materials, highlighted a number of advantages in announcing a merger recently with a smaller Japanese rival, but an important one was barely mentioned: lower taxes.
The merged company will save millions of dollars a year by moving — not to one side of the Pacific or the other, but by reincorporating in the Netherlands.
From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship.
“It’s almost like the holy grail,” said Andrew M. Short, a partner in the tax department of Paul Hastings, which advises a number of American corporations on deals. “We spend all of our time working for multinationals, thinking about how we’re going to expand their business internationally and keep the taxation of those activities offshore,” he added.
Reincorporating in low-tax havens like Bermuda, the Cayman Islands or Ireland — known as “inversions” — has been going on for decades. But as regulation has made the process more onerous over the years, companies can no longer simply open a new office abroad or move to a country where they already do substantial business.
Instead, most inversions today are achieved through multibillion-dollar cross-border mergers and acquisitions. Robert Willens, a corporate tax adviser, estimates there have been about 50 inversions over all. Of those, 20 occurred in the last year and a half, and most of those were done through mergers.
When Applied Materials announced its deal for Tokyo Electron, it said that its effective tax rate would drop to 17 percent from 22 percent as a result. For a company that had nearly $2 billion in profit in 2011, that amounts to savings of about $100 million a year.j |
