Pfizer-Allergan Merger Highlights Need For Tax Reform

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Investors Business Daily:

Tax Policy: The Pfizer-Allergan deal that will let the U.S. drug giant cut costs by renouncing its citizenship cries out for reform of an outmoded business tax system. Instead, our crackerjack regulators are pouncing into action.

 

The Treasury Department has announced it will create new legal restrictions on the ability of U.S. companies to merge with foreign firms in a tax-saving process called "inversion."

 

In this case, $48-billion-in sales Pfizer, now headquartered in New York City, will merge with $15-billion-in sales Allergan and move certain operations and jobs to Ireland.

 

But the administration wants to build a de facto regulatory Berlin Wall to prevent such moves.

 

We've got a better idea. Instead of strong-arming businesses to stay in the U.S., why not adopt policies that would not only incentivize them to stay, but also encourage foreign companies to locate here?