Monday, June 30, 2014

Ability-to-pay does not apply

A few years ago, Glaxo SmithKline, a multinational drug company, agreed to settle an American tax dispute by paying $3.4 billion and abandoning claims for refunds worth a further $1.8 billion. GSK used improper transfer pricing schemes to shelter profits outside the USA. It's a common practice but few coutries have the political will or the resources to challenge accounting practices of corporations that are wealthier than most nations. Additionally, Big Pharma spends huge amounts on lobbying and acquiring political support.

According to the Centre for American Progress,
"Recent analysis indicates that U.S. corporations are currently holding as much as $2 trillion in untaxed profits booked as offshore income."
In 2012, Canada lost a transfer price case against GSK in Supreme Court. Canada Revenue Agency claims that it enforces rules strictly but rather few signficant cases have been addressed. Part of the reason is that Canadian laws and regulations are friendly to multinationals. That was illustrated recently in the financial press:

Financial Post, June 18, 2014
Allergan Inc. is readying a bid for Irish drug manufacturer Shire Plc as it seeks to foil a hostile takeover from Canada’s Valeant Pharmaceuticals International Inc…

Shire is registered in Jersey while its corporate headquarters are in Dublin…

Unlike its U.S.-based rivals, Valeant pays a tax rate under 5%. The company benefits from a Canadian tax regime that allows companies to shift their intellectual property centres to low-tax jurisdictions such as Bermuda and repatriate the profits without incurring more tax.
Dow Jones News Service, June 30, 2014
LONDON--Shire PLC (SHP.LN) said Monday that its Canadian unit will receive tax refunds totaling $410 million from Canadian revenue authorities.
The Harper Government does not have much regard for science, but it has regard for multinationals companies and pays them to do research, even rewarding companies that do not pay income tax and shift intellectual property elsewhere after they create it.

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  1. There needs to be a lot of light shed on these companies. I have hepatitis c, which, until recently, was incurable.Gilead Sciences has developed a drug with a cure rate in the 90 + percentile cure rate. The cost for the 84 pills that can save my life and the lives of countless others? $66,000. The power these greedy bastards have is disgusting and the ability to put the dollars over saving thousands of lives makes me wretch. I understand the need for profit as I own a small business, but it needs to be tempered with some form of compassion.

  2. Welcome to the Blderberg - laissez-faire as practiced by the US Republican/Teas Bag Party, Herr Harper and his Neo-Cons and the Gordo/Photo-op, where the 1% deserve to be richer than the rest of the 99%. It is pure elitism on steroids. Gone is any notion of Democracy as today it is might is right.

    It is all going to come to a sticky end, s it always does, but millions if not billions will be badly hurt by the gluttonous greed by the very few.

    It used to be that government oversaw the peoples business, today, government ignores the peoples business and concentrates on enriching the few to unbelievable heights.

  3. Interesting reading. very informative. Wonder why the MSM isn't covering it? Oh, right now I remember why not. It might be a good idea if the opposition parties took this up in Parliament, it might get some legs there. We cut back on benefits to Veterans because the government can't afford it but they have money to pay wealthy corporations??????

  4. Yet the government is more than happy to go after the average Joe who has made a mistake and owes maybe $500 in taxes. Throw the book at the less fortunate but aid and abet the rich and wealthy eh !
    Methinks there will be a very real social cost to Harpers crooked dealings ! Northern Gateway and Kinder Morgan are but a start to social unrest that is a'coming.

  5. It a revised form of Dunne's famous quote.

    Today, government, "afflicts the afflicted, comforts the comfortable, buries th' dead an' picks thar pockets aftherward."

  6. Dunne's original quote concerned newspapers: "Th newspaper does ivrything f'r us. It runs th' polis foorce an' th' banks, commands th' milishy, controls th' ligislachure, baptizes th' young, marries th' foolish, comforts th' afflicted, afflicts th' comfortable, buries th' dead an' roasts thim aftherward".

    But I agree it's more reflective of government today.



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