In mid-March, senator Bernie Sanders sent a letter to the secretary of the treasury, Jack Lew, calling on him to block the inversion of American pharma company, Pfizer, and Irish pharma company, Allergan. The merger would allow Pfizer to claim Irish citizenship and would save them $35 billion in taxes unpaid to America.
It appears that Sanders’ efforts will not go unnoticed as President Obama has taken swift and decisive action to alter inversion regulations. As a result, the merger between Pfizer and Allergan has been terminated.
Going forward, it will be much more difficult for companies like Pfizer to skip town to avoid paying massive shares of taxes while still profiting off of American citizens.
“Inversion is when a company moves its tax residence overseas on paper, typically to a low-tax country, to avoid paying their fair share in taxes here at home,” Said Obama. “When multinational corporations exploit these loopholes — enjoying the many benefits of locating in the United States without responsibly paying into the system — it erodes the American tax base, undercuts businesses that play by the rules and ultimately leaves the middle class and small businesses to pay the tab.”
Watch.