Yesterday, a whole lot of people paid a whole lot of taxes. It was Tax Day — filing day — for most Americans.
Truth is, American workers pay income tax with every paycheck. And they pay other taxes too.
Somehow, though, Pfizer — one of the world’s most profitable companies — did much better than we did. “Drugmakers make big profits in the U.S.,” explains Sydney Lupkin at NPR. “But many pay taxes far below the 21% corporate tax rate. Pfizer’s effective tax rate is so low it’s getting a big refund despite booking $59 billion in revenue.”
Did you get a big refund on top of a huge wage hike? No?
Well, you should lobby
Now, Pfizer’s long had a cushy/pushy relationship with the U.S. Government. The company’s had to pay loads of legal penalties for malfeasance, but it’s also received subsidies, immunities, and government-forced clientele — in the rollout of its most famous product. But through thick and thin it faces our byzantine tax code with ease, for it’s that tax complexity that really gives Big Pharma the advantage, compared to
I have never argued for more taxes. I wonder if corporations should even be taxed based on income, which gets complicated to figure since it’s based on profits and losses and investments etc., thus opening the door to corrupt insider politics. Plus, those taxes simply get passed on to us.
But if corporations are taxed, how indecent that small companies tend not to get huge refunds on years in which they make stellar returns.
Though I suppose if Congress keeps on awarding more to the bigger, that’s a problem that sort of solves itself.
With the smaller companies just dying out.
This is Common Sense. I’m Paul Jacob.
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5 replies on “What Pfizer Pfolks Got”
Having the state chose winners and losers is a terrible idea; and only those who romanticize corporatism or desire that economic rents be given to specific persons (typically themselves) want policy to favor large enterprises.
But, while I want liberty for all, I favor liberty for some over liberty for none. (I reject the notion that no one is free if anyone is not; were that proposition true, one criminal anywhere would always have the power to take freedom everywhere, and thus freedom would be an impossibility in any foreseeable future.) I become anxious when, in response to the inequalities of state encroachments, I don’t see proponents of equal liberty bracing their pikes against the device of increasing the encroachments against some, as a means of equalizing the intrusions.
Let us be sure always to move towards equal liberty by paring-back the state where it extends beyond what ought to be its ideal limits.
One party wants corporations to pay a fair share and the other party wants to give corporations more tax breaks! Guess which party is which.
Corporations don’t pay taxes. Taxes are on the expense side of the ledger. That ‘fair share’ is ultimately passed onto their customers.
Wrong!
“How much taxes do corporations actually pay?
21%
The corporate tax rate is a tax levied on a corporation’s profits, collected by a government as a source of income. It applies to a company’s income, which is revenue minus expenses. In the U.S., the federal corporate tax rate is a flat rate of 21%. States may also impose a separate corporate tax on companies.”
Pam, you utterly miss her point, though she is somewhat mistaken.
Regardless of who accountants treat as paying a tax, how much of it is really paid by buyers and how much is paid by sellers is a consequence of who is more responsive to changes in price. Notice how buyers almost always think of themselves as paying a sales tax, though it’s official owed by the seller? Prices shift in response to taxation. The truth is that, unless the buyers don’t change their purchases in response to any change in the after-tax price, and the sellers don’t change how much they offer in response to any change in the pre-tax price, the tax is shared, not paid just by one group.
A corporate income tax effectively changes the after-tax prices of whatever the corporation sellers; so they don’t sell as much unless they can get the consumer to bear the whole cost. That’s the scenario that Pat imagines. The truth more typically is that the customers pay some of the tax by way of higher prices, the stockholders by lower dividends, and the employees by lower wages, salaries, and benefits.