https://www.finance.senate.gov/chairmans-news/senator-wyden-continues-investigation-into-big-pharma-tax-practices

Following letters to AbbVie and Bristol Myers Squibb, Wyden requests information from Merck, which reports just 14 percent of pretax income in the United States despite U.S. market being home to 46 percent of global sales

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today continued his investigation into Big Pharma’s tax practices, and how loopholes in the tax code have allowed large multinational corporations headquartered in the U.S. to further abuse tax havens and avoid paying U.S. taxes on prescription drug sales. While U.S. sales account for 46 percent of Merck’s global sales, Merck reported just 14 percent of pretax income in the United States.

In a letter to Merck, Wyden wrote, “As you are aware, in addition to being Merck’s legal domicile and the primary location for Merck’s research and development activities, the United States is the market for nearly half of Merck’s total global sales. Although the United States accounted for $22.4 billion of Merck’s sales in 2021, Merck reported just $1.85 billion in pre-tax income in the United States. In contrast, in the same year Merck reported international pre-tax income of more than $12 billion on approximately $27 billion in sales. This substantial discrepancy between Merck’s domestic and international pre-tax income appears to be the result of Merck’s use of subsidiaries in several well-known low-or-zero tax jurisdictions, which yielded a ‘favorable impact on [Merck’s] effective tax rate compared with the U.S. statutory rate of 21%.’” 

Full text of the letter follows:

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Spotlighting IRS Customer Service Challenges

The United States Senate Committee on Finance held a hearing on February 17, 2022 tax professionals and taxpayers should pay attention to right now. During this hearing they were “Spotlighting IRS Customer Service Challenges”. You can watch the hearing at this link. However, it is recommended you start by viewing the statements of the following individuals:

Senate Member Statements:

Mike Crapo Statement (R-ID)

Ron Wyden Statement (D-OR)

Witness Statements:

Erin Collins, National Taxpayer Advocate, IRS Testimony

Jessica Lucas-Judy, Director, Strategic Issues, US Gov Accountability

Jan Lewis, Chair, Tax Executive Committee, AICPA

You will find it very valuable reading these statements to understand what is going on behind the scenes, yet right out in the open during this hearing and testimony. Being informed is the best lesson.

Job-Killing Tax Hikes Will Hurt Middle Class, Help China

U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, delivered remarks on the Senate Floor on the Democrats’ $3.5 trillion reckless tax-and-spending bill.  In his speech, Crapo says the efforts to reimagine America by imposing crippling tax hikes will stunt our economic recovery, further impede labor markets, and punish low-and-middle-income workers with higher prices for everyday goods and services.

On business tax hikes:  

A higher corporate tax rate would result in lower wages and reduced benefits; hit the nest eggs of everyone saving for retirement; and force consumers to pay more for everyday necessities. 

Hiking the rate indisputably hits the middle class.  Estimates suggest workers shoulder up to 70 percent of the corporate tax burden.   

And a recent analysis performed by the nonpartisan Joint Committee on Taxation says the burden on over 98 percent of Americans who make less than $500,000 a year increases over time.  Let me make that clear: 98 percent of the increase that is felt by labor, falls on those making less than $500,000 per year, and the vast majority of that on those making less than $400,000 per year.   

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