IMAGE SOURCE: GETTY IMAGES. Pfizer's foreign profits are stuck... for the moment The long and short it is that Pfizer has literally shown no interest in repatriating these funds. And instead, the drugmaker has repeatedly attempted to perform a so-called tax inversion by buying a more tax-friendly address abroad to unlock these trapped monies. So if you're still wondering, Pfizer's failed attempted to merge with Ireland's Allergan earlier this year really was all about the taxes, and this ginormous cash pile underscores why -- regardless of what the drugmaker's management may have said to the contrary. Now that the U.S. Treasury Department has put some rather aggressive measures in place to discourage companies like Pfizer from moving abroad, though, tax inversions may no longer be all that feasible. Pfizer, after all, abandoned its merger with Allergan as a direct result of the Treasury's actions, and the company has yet to openly consider alternative buyout targets to lower its effective tax rate. As things stand now, Pfizer basically has a boatload of cash stored overseas and very few ways to put it to work. That's a regrettable situation for the drugmaker and its shareholders for obvious reasons. But that may all be about to change with President-elect Donald Trump Donald Trump's proposed tax plan for businesses of all sizes implies a fundamental shift in policy moving forward. Digging into the details, the Trump plan is to reduce corporate taxes from 35% to 15%, putting the U.S. on par with tax havens such as Ireland. Most importantly for companies like Pfizer, though, his plan also includes a one-time tax rate of 10% on profits stored overseas. IMAGE SOURCE: FLICKR VIA DISNEY Can Trump push his tax agenda through Congress? What seemed at first like an unpopular idea has gained some support in Washington D.C. as Trump's political appointments are made and his ideas more fully fleshed out. It seems completely likely that the Trump tax proposal could see the light of day. Why lower corporate taxes matter to Pfizer's shareholders Pfizer is headed by CEO Ian Read, and that's extremely important to keep in mind. Cutting to the chase, Read's background is steeped in accounting, which is why he has run Pfizer like an accountant for the most part. Under his stewardship, Pfizer has placed a major emphasis on its bottom line, often at the expense of its top-line growth. In 2013, for example, the drugmaker spent $16.3 billion on share repurchases, compared with a mere $6.67 billion on R&D -- even though the company was facing on onslaught of patent losses. While Pfizer has revved up its R&D budget closer to $8 billion since then, the drugmaker still kicked off 2016 with a ginormous $16.4 billion in authorized share repurchases, perhaps revealing where Read's heart truly lies. And at the risk of beating a dead horse, Pfizer's somewhat questionable decision to call off its merger with Allergan over the loss of the upfront tax benefits drives this point home, especially as this merger would have brought in a diverse mix of new growth products. So the real question is whether a 10% one-time tax rate on foreign profits is enough to entice Read into bringing some or all of Pfizer's overseas cash back home. After all, these monies could be used for a diverse array of value-creating purposes, such as a special dividend payment or an acquisition bonanza. Take-home message The bottom line (pardon the pun) is that Read may balk at paying even an $8 billion tax bill because of his particular background -- implying that the drugmaker may attempt to hold out for a tax holiday on all foreign profits. Pfizer's stated position on the matter, after all, is that this $80 billion of unremitted foreign earnings is to be "indefinitely reinvested overse
you work here for the same reason we all work here....full time pay for part time work. Six figure income, benes ,car, and what do you really do all day every day......cater a lunch 4 times a week, and go home. Hell, some fays, send lunch and stay home. All pfizer drugs were pre- sold, we just reinforce the message, pfizer makes enormous profits and pays us shit compared to the big shits who do less than we do every day. It's truly comical that this much money can be made peddling other people's crap, but that's the American way, smoke and mirrors! It's all BS.
Do you actually get replies to this? Must suck to be a repressed homosexual looking for bites on the web. Pent up anger and frustration manifested in passive aggressive behavior towards strangers? Hiding much?
"...the Trump plan is to reduce corporate taxes from 35% to 15%, putting the U.S. on par with tax havens such as Ireland. ..." And since businesses are paying less, who do you think they're gonna come after to make up the shortfall?
