Reed Statement on Proposed Pfizer and Allergan Tax-Inversion Merger
WASHINGTON, DC – U.S. Senator Jack Reed (D-RI) issued the following statement today after it was announced that pharmaceutical giant Pfizer plans to merge with Allergan, which has its corporate headquarters in Dublin, Ireland:
“The Treasury Department is making progress on thwarting inversions, but Congress needs to act to protect American taxpayers. This is an issue of economic fairness. Companies like Pfizer want to benefit from all the U.S. offers but they don't want to pay U.S. taxes. Instead of protecting companies that want to move their corporate addresses overseas, the Republican leadership should bring anti-inversion legislation up for a vote,” said Reed.
Earlier this year, Senator Reed and several of his colleagues reintroduced the Stop Corporate Inversion Act, which would amend the tax code to prevent U.S. companies to from moving their tax domicile overseas in order to evade U.S. taxes. In April, Reed and six of his colleagues introduced the American Business for American Companies Act, which would ban federal contracts for companies that move their headquarters overseas through inversion.
According to the bipartisan Joint Committee on Taxation, inversions could cause the United States to lose about $33.5 billion in tax revenue over the next decade. While “inverted” companies incorporate overseas, they remain majority-owned by shareholders of the old U.S. corporation and do not have substantial business activities in the foreign country in which they are incorporating.