James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Possible Pfizer inversion raises questions among lawmakers
Author: James F. McDonough
Date: May 16, 2014
Key Contacts
Back
U.S.-based pharmaceutical company Pfizer has offered to buy British competitor AstraZeneca for $99 billion, according to The New York Times. In buying the company and moving its headquarters to Britain, Pfizer could avoid U.S. corporate tax liability on its income outside of the the country. Currently, the company pays an effective tax rate of approximately 27 percent – much higher than the British corporate income tax rate of 21 percent.
There are at least 50 American companies that have undergone the controversial inversion process, in which a U.S. company merges with a smaller foreign company in order to enjoy lower tax rates, almost half of which have occurred in the last two years, according to the news source. If successful, however, Pfizer would be the largest and best-known company to do so.
“Pfizer is the Coca-Cola of health care. It’s as American as apple pie,” Mark Schoenebaum, an analyst with the ISI Group, told the news source. “If there is a deal that is going to start a real dialogue in Washington, it might be a company like this.”
Such a move would result in the loss of tax income from the company for the U.S. government, which amounted to about $2.87 billion last year, Reuters reported. This has sparked serious concern from American lawmakers on both sides of the aisle.
“This further demonstrates the urgency for tax reform,” a spokeswoman for Democratic Sen. Ron Wyden, chairman of the tax-writing U.S. Senate Finance Committee, told the news source. “Now is the time to undertake comprehensive reform to ensure our country stays competitive on a global stage and continues to be the best place for corporate investment.”
The Obama administration included a proposal in its 2015 budget to more seriously regulate deals like the one that Pfizer is attempting, according to Reuters. With Congress deadlocked on tax issues, however, the proposal is unlikely to gain any real ground.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators
NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]
Author: Scarinci Hollenbeck, LLC
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
What Is Antitrust Litigation Law?
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.