A massive $150 billion merger between Pfizer and Allergan has been called off after the Obama administration issued new rules designed to crack down on corporate tax avoidance.
The pharmaceutical tie-up was designed to allow New York-based Pfizer (PFE) to move its corporate headquarters to Ireland, and possibly reduce its tax bill. If completed, it would have been the second-largest merger in history.
The takeover was an example of an "inversion," a maneuver by which a U.S. multinational merges with a foreign company and changes its legal tax residence to another country with a lower tax rate.
New rules issued by the U.S. Treasury on Monday seek to discourage inversions. They change how the ownership percentage of the foreign company is calculated and crack down on a tax strategy called "earnings stripping."
Pfizer explicitly said that the new rules are the reason it and Allergan were scrapping the merger plans.
Good news for Irish tax payers, inversions rarley bring in huge profits and normally actually cost the taxpeyrs of that country.
Good news for Irish tax payers, inversions rarley bring in huge profits and normally actually cost the taxpeyrs of that country.
Well it would depend, how much was Ireland receiving from Allergan before? Even if they pay less tax as a percentage, there is more to tax (to Ireland). You also have to account for the creation of jobs, since when companies do this they make the Irish company into the EU headquarters for that company which usually involves hiring more people and building new facilities/offices. These inversions have actually overall been pretty good for the Irish economy, after all Ireland is the fastest growing economy in the EU and leaves most other developed countries in the dust.
Is Ireland?s Economy Really Growing Almost as Quickly as China?s? - Real Time Economics - WSJBut there are caveats. Lots of caveats. So many, in fact, that some economists question whether the GDP figures alone say very much about economic activity.
One issue is the profits made by all those multinational companies, many of which are American. They show up in GDP figures, and are likely to be exaggerated by tax-avoidance schemes, but don’t stay in Ireland. So gross national product is a more accurate reflection of Irish incomes. In the first quarter, GNP actually fell by 0.8%.
Not so fast as it seems it appears and certainly not in ways that benefit Irish workers. Most of the growth is by foreign businesses looking for a tax shelters like the one that Obama has targeted.
Is Ireland?s Economy Really Growing Almost as Quickly as China?s? - Real Time Economics - WSJ
Well according to this graph it has been steadily increasing.
But GDP growth is nowhere near the GNP growth and that is what is misleading
Their unemployment has been shrinking too but it is still at 8.6%. Not a very impressive number especially considering it was 5% in 2008. It still looks like their recovery is slower then the U.S. Not surprising since the Obama recovery was the fastest in the entire world. With all the complaining who would have thought?
Ireland Unemployment Rate | 1983-2016 | Data | Chart | Calendar | Forecast
See how easy that was? It shows how previous administrations have looked the other way while trillions in profits were moved off-shore.
Actually Canada's was the fastest recovery, we left recession a while before the US did. They have lost 1% of unemployment over 1 year, I woudl say that is impressive considering the state they were in after 2008. Ireland was one of the hardest hit countries in Europe and had to bailed out but is now leading the pack.
Canada "recovered" relatively quickly because they largely missed the financial meltdown altogether.
Canada largely missed the financial meltdown altogether because they had stronger regulations.
Are you saying Europe was not affected by the 2008 recession? They were very deeply affected, that is the whole reason the European debt crisis exists.
Are you saying that Canada is part of Europe?
The US recovered faster than every European nation other than Germany. No thanks to our "just say no!!!" Republican friends.
See how easy that was? It shows how previous administrations have looked the other way while trillions in profits were moved off-shore.
Pfizer-Allergan merger scrapped after Obama cracks down on tax breaks - Apr. 6, 2016
Well it would depend, how much was Ireland receiving from Allergan before? Even if they pay less tax as a percentage, there is more to tax (to Ireland). You also have to account for the creation of jobs, since when companies do this they make the Irish company into the EU headquarters for that company which usually involves hiring more people and building new facilities/offices. These inversions have actually overall been pretty good for the Irish economy, after all Ireland is the fastest growing economy in the EU and leaves most other developed countries in the dust.
Actually Canada's was the fastest recovery, we left recession a while before the US did. They have lost 1% of unemployment over 1 year, I woudl say that is impressive considering the state they were in after 2008. Ireland was one of the hardest hit countries in Europe and had to bailed out but is now leading the pack.
They seem to be leading in tax shelters to me. 8.5 % unemployment is not a good number.
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