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Endo's Message To The IRS: "F#ck You"
Submitted by Michael Castor via MichaelCastor.com,
Endo Health Solutions just announced a big acquisition. The company’s rationale is to take advantage of a stunning tax loop hole.
First a little background. Warning: this is a little dry and technical, so if you want, you can skip the background (I indicated below where that ends).
—–background begins———–
The US federal corporate tax rate is 35%. There are a handful of countries around the world where taxes are much lower (most notably Ireland, Singapore, and Switzerland). Ireland, for example, has a tax rate of 12.5%. Who wouldn’t want a lower tax rate? Just pack up and move to Ireland, right?
Well, Congress (which authors the IRS tax code) is smart enough not to allow that. For a variety of reasons, Companies can’t simply change their address. The US would continue to identify them as US companies and impose the 35% tax rate. What if, however, a company were to be acquired by an Irish parent. That could result in change of domicile. In order to do this, all one would need to do is set up a shell holding company in Ireland (essentially of no value itself) and issue shares to acquire the US company. Voila, it’s now a new company domiciled in Ireland, right? Well, Congress figured this one out to. Congress passed Section 7874 of the Internal Revenue Code decreeing that this type of behavior is foul play. If an Irish holding company acquires a US company such that the former shareholders remain the same shareholders, the IRS recognizes this transaction as a sham and continues to treat it as a US corporation for tax purposes (the Irish company will be taxed at 35%, with taxes payable to Uncle Sam). However, the IRS set an 80% threshold, meaning that if the US target is less than 80% of the parent/acquiring Irish company, the IRS accepts the transaction as legitimate.
Here’s where Endo got clever. They identified a way to ‘re-domicile’ and move to Ireland. They just need their newly-conceived Irish parent holding company to make two acquisitions simultaneously. One acquisition is Endo itself (which, by being acquired, effectively moves to Ireland). The other acquisition needs to be a non-US company and also needs to be of sufficient size that it will comprise at least 20% of the newly-formed Irish company. That way, the Irish holding company absorbs Endo, but Endo is less than the critical 80% of the new entity.
It is seriously brilliant.
Endo found a Canadian company, Paladin, to also be acquired by a new Irish holding company. Paladin will be about 22.5% of the new company (which will conveniently be named “Endo”) and existing Endo will be 77.5% of new Irish Endo. Perfect.
Endo paid a premium to induce Paladin to be acquired as part of this transaction. Normally an acquirer-company pays a premium because they can cut costs (ie eliminate some duplicate sales people, accounting people, etc). In such cases, the cost savings exceed the acquisition premium and it makes sense for all parties involved. Endo conceded that there won’t be much in terms of cost synergies from Paladin. However, by moving to Ireland, the tax rate will immediately move down from around 30% to 20% and then will gradually shift toward to the Irish rate of 12.5%. Endo’s tax savings vastly exceed the premium paid.
Financially, here’s the math rationale. If Endo has a pre-tax profit of $100 (purely by way of example) and is taxed at 30%, profit to shareholders = $70:
$100 (pre-tax profit) minus $30 (taxes) = $70 (final profit)
If the tax rate falls to 15%, profit to shareholders = $85:
$100 (pre-tax profit) minus $15 (taxes) = $85 (final profit)
Thus, the amount shareholders keep rises from $70 to $85 from this tax-accounting wizardry, a boost of about 20%.
———background ends————
There are a couple of implications to highlight.
- Endo’s shareholders are the clear winners. With lower taxes, more profit stays in shareholder pockets.
- The USA is the big loser. It’s not just that taxes go down. From the US point of view, taxes go away almost completely. Before this transaction, the US was collecting taxes at a rate of 30%. The tax rate will fall to less than 20%, but even more significantly, it won’t be the US collecting taxes. Endo is becoming an Irish company. Taxes will go to mother Ireland.
In my mind, this begs the question as to whether there are any moral issues raised by Endo’s actions. In answer, I assert that Endo has not breached any ethical boundaries. To the contrary, Endo has a fiduciary responsibility to its shareholders to maximize corporate profits. If the US government offers a legal mechanism by which Endo can lower its tax burden then it is Endo’s obligation to take advantage of this. (If the IRS had opined that transactions like this may be in violation of the spirit of the law, that might be a different story, but it does not seem to be the case.) Ultimately, Endo merely took advantage of a striking loop hole in the flawed US tax system.
Even so, there is an element about this transaction that is unseemly. The culture in the US encourages fairness. Endo operates entirely within the US. It gets to enjoy all the infrastructure and benefits that the federal government pays for with tax dollars. Going forward however, Endo won’t be paying much taxes, and what it will pay mostly won’t go to the US anyway. The absence of Endo’s tax payments (about $265m in 2012) will either be added to the deficit or somehow get made up by increased taxes on the rest of us.
Extrapolating beyond Endo, if one accepts the premise that companies are obligated to use legal means to minimize tax costs, and if one then takes this precedent to the logical conclusion, this transaction could/should be a road map for other companies to follow. While Ireland would delight in its new resultant tax revenue, the implications for the US are less sanguine. Is Congress paying attention?
In closing, I’ll point to a certain irony in all of this. My thoughts turn to the saying, “The only things certain in life are death and taxes.” Endo Health Solutions has focused its efforts on the latter.
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How many lobbyists do they have? In the 'merican slave state, the amount of tax you pay is inversely proportional to the number of lobbyists you have. Duh.
Fuck you, bitchez! (Sorry, I couldn't resist.)
This article would be highly relevant oh, 2,3 decades ago?
Author is wrong. Endo still pays taxes on all of it's US business, even if parent co is in Ireland. Sorry to burst your bubble.
ENDP has $3bn in sales, almost all of that is US-based (95%). The company they just acquired has $200M in non-US sales, so doesn't really change that profile of overall co.
What this DOES is allow ENDP to avoid the "cash trapped offshore" problem that many tech co's face. But only if they actually grow/acquire non-US businesses.
O/T
Saudi nuclear weapons 'on order' from Pakistan
http://www.bbc.co.uk/news/world-middle-east-24823846
Replace all corporate, payroll, and income taxes with a single point-of-sale transaction tax on new goods and services. Businesses would come stampeding into the US and setting up shop here, and bring their money with them.
and then we can bail them in and take all that cash!
Fuck You IRS:
I like the way that sounds
Endo's Game
Checkmate!
Endo still pays taxes on all of it's US business
That's too bad.
Let everyone who can, escape.
It's probably pretty easy to get around the paying tax on income from the US issue, if Google can do it somehow I'm sure they can too.
Author's math is wrong too.
If company spends $90 to make $100 of pre-tax revenue, they have a pre-tax profit margin of 10%. If you tax this income at 35%, it would be a 6.5% after-tax profit margin instead. If however you manage to swing a tax rate of 12.5%, the after-tax profit margin only falls to 8.75%, which means that after-tax profit margin just increased by 34%. If the non-US company they were buying which will be 22.5% of the new company was completely worthless, and if they paid for the acquisition entirely by share dilution, which is a worst case scenario for the shareholders, that would mean the shareholders get diluted 22.5% but own a company that just increased profit margins by 34%.
Endo's HQ (er, um, FORMER HQ) is right up the road from my house. A rather non-descript office center near the intersection of Rt. 1 and Rt. 202 in Chester County, PA., behind a car dealership (where my best friend from high shool happens to be the fleet and heavy truck service manager).....
Although you'd be hard pressed to find it on their website, they were born from a single drug- Percocet. DuPont didn't know what to do with it and patents were expriring so they rolled it out on it's own. Then Endo discovered something AMAZING... take the same drug, repackage it and get a brand new 25 year patent!
Notice anything similar about that history and this new "tax dodge"? Yep, they KNOW how to work the system. ANY system.
I live near their new headquarters which is certainly not non-descript. They were able to get money from PA to move from one end of the county to the other. Corporate welfare at its finest. All for a company that produces a drug that is abused and causes more OD's than heroin, cocaine and ecstasy combined! If sanity ever returns, I hope the overpaid stewards of this criminal enterprise are in the first round of persecutions.
The solution is lower taxes so that this is no longer worthwhile.
The free shit army needs to go and get a job...
and then I read this, 'The culture in the US encourages fairness'... LOL, you must be pissed. What the fuck is fair about taking my money and giving it to some arsehole who does nothing?
You're looking at it from the wrong perspective.
From the FSA's point of view, its all fair, yo!
ENDO!!?? HERE'S THE REAL ENDO YOU MOOKS!
http://www.youtube.com/watch?v=L-edzAh0A0s&feature=c4-overview&list=UU68...
And BTW.. Did I tell y'all THE FUCKING CRASH IS UPON US NOW!!
http://www.zerohedge.com/news/2013-10-28/dallas-fed-dumps-19-month-high-...
Why yes I did say that!
Fuckin A sick n'all, ain't it??
Oh my my my.. That S and P Fih Hunderd is down 22 points today.. And it ain't even a NASCAR race now is it??
Of course we then would have the new transaction tax as well as all the other taxes. If you think the government is going to relinquish any taxes then I have a nice new money saving health plan to sell you.
Another reason why corporate taxation is stupid.
Clearly the Saudis (KSA) do NOT like Iran. "If they get one, so will we!" seems their motto.
/ Will Israel and the US now sanction the Saudis? Or do they enjoy being the World's #1 and #2 Ranked Hypocrites? Followed by KSA in close 3rd. /sarc
The US thought it was a wonderful idea to station tactical nuclear missiles in Turkey.
Russia should place 200 nuclear missiles in Iran and tell the troublemakers in the ME to behave.
Yeah really.Pakistan also plays both sides of the street,
Uncle Scam might also be put off declaring SA as a 'terrorist nation"when they end
the petrodollar monpoly.
Entropy is a bitch.
there is the portion that is end-of-year corp profit that will not be taxed at 30% and that is the point. huge savings.
The US is the only major country that taxes non-domestic profits. It is a huge competitive disadvantage.
That tax only hits when profits are "repatriated", hence what happens is that when US co's make profits in their non-US subsidiaries, they just keep the cash offshore. They don't reinvest it in the US, and they don't pay it out to shareholders.
Non-US co's don't have that problem. For instance, if a Canadian company makes money in the US and Canada, it pays the IRS 36% of it's US profit, and Canadian gov tax on its Canadian profit.
The IRS needs to change this...by eliminating the taxation of non-US profits.
ergo author is not "wrong" as per your above.
plus, there are many other significant incentives for going over to Ireland, not limited to future changes in policies and laws. trust me on that...
Yes author is wrong.
Year-end corporate income earned in the US is taxed by the IRS and paid to the US gov. ENDP may be able to transfer some IP to the Ireland co (a taxable event) and avoid some US tax through transfer pricing on future profits.
What the IRS can't get it's hands on now, and shouldn't anyway (because the law needs to be changed), is the non-US income that ENDP will earn in the future.
that too. but ENDP will avoid the 30% on corp profits even here in US via transferring and other methods.
edit: if you're not a corp tax attorney, you may want to consider speaking with one, bc ENDP didn't do this deal to not save tax money. very simple actually: there are many benefits.
I never said that it wouldn't save taxes. The author said that ENDP would pay NO tax to the US since it is now an Irish co. That is wrong.
And thanks for the tip, I'm pretty sure I understand exactly why ENDP did this.
yes i agree, but remember, the author qualified the $100 example for simplicities' sake. there are many other nuances that he knowingly did not get into, one would think.
can't do that. too easy to make it all overseas profit and pay no tax at all, for access to by far the most profitable market in the world. it's happening right now. make a car door in china for fifty bucks, sell it to an american assembler for 500., then count it's value on the car at 550. most of the profit on a car 'built' and sold in america just became non taxable overseas profit. there is a cost to our civilization. someone has to pay it. might as well be the cocksuckers with no allegience to their country or fellow americans. do you really think it has been healthy for our country to give these type of scum tarriff free access to our consumer markets while paying no wages or taxes?
Right, no more US taxation of Endo's non-US profits.
@notbot
Yes, that's right. To continue to operate in The US they will need a US registered legal entity, which will now be a subsidiary Company. That Company WILL be liable for US taxes on US profits at the standard US rate. However, they will probably be able to "Transfer Price" substantial costs intoThe US by providing "Services" to the US affiliate (Management, accounting, trademark and copyright agreements etc.) from Ireland, thereby reducing profits in The US and thus also reducing taxes paid. The "IP" industries (Pharma, IT etc.) have specialised in these practises for decades.
Ireland Endo can charge USA Endo interest on all the capital assets it holds in the USA - the interest expense will be deductible against USA earned income - they can also charge consulting fees.
This could reduce the USA income to near zero and shift the income to Ireland.
There are books written on how to legally shift income between taxing locations - it is how Apple ended up with $150 billion in cash outside the USA.
yeah no shit. At this point this is all that's left.
http://www.youtube.com/watch?v=768h3Tz4Qik
The only thing certain in life is death..
and taxes for those who choose state coercion.
How long before it becomes that the only certain thing in life is death for those who don't pay their taxes?
..that probability is directly proportionate to the co-efficient of friction.
How about Endo buys a chunk of Bitcoin - becoming a capital expense, which is then sent across the globe in a blink of an eye to a tax-free shell company that liquidates and retains the capital for future use?
Or any other variant thereof.
Its coming, whether the lawmakers know it or not.
To me, it seems like the author is implying that there is something morally wrong with Endo's actions.
I would like to remind the author of the dire need in this country to "Starve the Beast".
It is every man's moral obligation to pay as little Tax as possible by any means necessary, to our Tyrannical overlords.
What people fail to realize the the truly rich hide all their money in corporations and therefore pay very little tax relative to their assets and income.
They use income trusts (which is why the money is offshore from the US).
Most people do seem aware of the use of shell corporations, how many does GS have again, few thousand?
It's not hidden, it's retained i.e the owner of said wealth already has so much that they just haven't gotten around to taking delivery yet. The "US government" knows exactly how much is retained and precisely where, and yet they never seem to help the legislators or regulators in government find it...
Probably because most of it is theirs to begin with.
If I change my nationality from Polish and German to Irish and Canadian do I have to pay taxes anymore? The IRS can kiss my Blarney Stones, ay?
excellent. and let's also not forget that Ireland does not have equivalent of ObamaCare TAX; quite the opposite actually.
Articles like this are populist pablum. Corporations do not pay taxes only people do.
Corporations ARE "people" according to SCOTUS, brah.
It's pretty easy to tell someone to fuck off as you are running away. Yawn.........
Is it me or are gas prices starting to reflect that this depression/recession has started to take a leg lower? I know CNBC wants to pitch it as great news but with the dollar being so weak lately it just seems to reflect how broke everyone has become.
I was noticing that too. We are real close to breaking below $3.00 a gallon here.
$3.39 here. Insane Doc. We are actually finally getting a small bout of deflation and no one can take advantage of it.
Don't tell kito, we'll never hear the end of it.
he's been buying gold. What a putz!
LMAO. He sure hasn't been buying sandwiches.
It's deflationary, but no worry, the hyperinflated dollar will fill the short term vacuum and the cycle will come round full.
It really isn't deflationary, as the money supply is still expanding. It's just a shift of capital into something that is needed more which drives down the demand. Most likely it's people stocking up on food and ammo that is driving the cost downward.
Once again Price Inflation is not real Inflation, it is merely a symptom or side-effect of real Inflation.
I bought premium at $3.35 yesterday. I'm in Tampa Bay. A chunk of the price drop is due to winter formulations though.
What is really sad is that we've become so used to being gouged (be it by inflation or fraud) that we are now calling $3 per gallon "cheap".
Isn't that the truth?
I think a more telling way to view it is to determine what percentage of our take home pay is being spent on gas. I'm fairly certain that by that calculation, the vast majority of the people in the US are getting hammered.
Well it is hammer time, can't touch this!
Paid 2.86 here in the DFW area the other night Doc.
I wish that diesel would see a bit of a drop, but it's been holding up. Oh well, I'm heading off-peak times for running my diesels, in which case I wouldn't see any big plus out of it: I'm not going to look to fill storage tanks- I've got too much to manage as it is (and my coffers are a bit low).
Fonz, I can always rely on you for spotting the canarys :-)
And keep in mind what this will mean to the oil and gas industries as their margins start becoming strained. This is the shifting of our heretofore misconception that "economies of scale" is only positive in direction... what happens when less and less people can afford to keep the volume pumped up? Attracting more "demand" would require to drop prices even lower... If all of this doesn't point out that shareholders will become a dying breed I don't know what will.
Regulations will be cut. Drill-baby-drill will become plastered everywhere. All to no avail. Welcome to the other side of the parabola...
The culture in the US encourages fairness?
WTF planet is this guy coming from? Has he been paying attention at all ? Here's a name for you C-O-R-Z-I-N-E !
Well, all is fair in love and war...
I certainly feel no love for these pricks, and the war hasn't really started yet.
He must have missed the transformation into Orwellian fairness.
Good for them! Shows how stupid US administration is to cling to confiscatory tax rates. If they dropped corporate tax rate to 15%, they'd collect more revenue than they do now.
What the hell does Congress care. They don't get paid by the government.
This needs to be added to the "best of" quotes!
"Is Congress paying attention?"
It doesnt matter whether Congress is paying attention. As long as the First Miscreant and Indefatigable Liar is in office (and that is another 3 long years assuming a hero fails to appear who can end the fucker's life for the good of mankind) nothing is going to happen. Democrats do not see the destructive result of setting taxes for corporations at 35% nor do they see the intellectual problems with doing so (double taxation, inefficieencies). To them corporations and profit are evil so the higher the rate the better, damn the consequences. Hell half the republicans or more probably dont even begin to understand why 35% is a problem. They are just that stupid. In any event, nothing positive will happen. Cannot afford to do the right thing now frankly or else employment and the economy would actually improve and then the Fed would be in a pickle with those by then 3 trillion in excess reserves itching to explode the money supply in the real world in which case you get Volcker 2 and a sharp recession. Cant have that on your conscience so just muddle along as is methinks.
Someone already noted that the tax implications in this article are really small in scope (suggesting that it's for other reasons). Anyway, that there is "one" example doesn't make it a model.
BTW - Drop rates to ZERO and everyone is STILL heavily in debt and unable to buy shit. Anyone who thinks that corproate CEOs would go on a hiring binge in such an instance is clueless. Margin compression until it all blows: the tax shit is more or less a distraction, a bump on a road that leads directly to the cliff (the bump/shitty road is IN the path, it is not THE path [which is dictated by our quest for perpetual growth on a finite planet]).
You are not new here, so what gives? Why are you so clueless still?
Very few corporations pay anywhere near the marginal US tax rate. I doubt the savings are as great as stated in the article.
If this practice became widespread and actually hurt federal tax revenue sufficiently, I'm sure Congress would respond in kind. For example, Endo's patents would no longer be enforced by the State Department by twisting arms of foreign countries, etc.
is there no moral or ethical wrong doing by congress attempting to trap companies within its' borders?
Only if one is coherent enough to recognize that taxation is nothing but pure theft.
Are you sure you've got things correct? It's not that companies (large corporations) have Congress traped? (look up Finance and Energy industries)
As we fall over the edge of the growth parabola we'll be pointing at anything and everything being "the cause," except, of course, the actual cause itself (which is our inability to grasp simple math- that perpetual growth on a finite planet is not possible).
Did Bruce Krasting include this "income" in his post about the top 10% not having enough "income" to pay the cost of the Federal government's entitle programs?
WB7: Could I please see this T-shirt on a fetching strawberry blonde:
"Fuck You, I'm Irish"
"Only the little people pay taxes." -- Leona Helmsley
LEONA!
"If you murder somebody, tell me. I'll help you hide the body. But don't you lie to me."
Endo also has negative EPS. . . so how is this relevant?
Anyways, the people who work for endo still pay tax and they are in the US.
Finally, corporations don't pay tax, the people who own them do. So it is management's duty to help the owners minimize the double taxation that occurs with taxing corporate profits and then taxing the distributions/capital gains faced by owners.
Corporations don't pay taxes, their customers do.
BRAVO!
It's really all a wash. Sure, we could cut all "fees" that help regulate and could possibly be for the "greater good," but that would only last until it crashes on its own account anyway.
Let's face what the real reality is. Folks in the US are becoming poorer. The US won't be the big market that it once was. If one runs around screaming that this is the reason for bailing then they might be targeted (seems the preferred method for anyone who speaks poorly about the great USA).
I believe Perrigo (PRGO) did something quite similar to this, and well before ENDO.
Endo gonna get Friend-o'd by Uncle Sam?
When are people going to lose faith in this institution known as government ?
Once we do - we as a people will be applauding any and all instances where hard earned cash is kept away from the greasy klepto hands of the State.
Re: When are people going to lose faith in this institution known as government.
When the majority of the people realize that they are all self-actualized induviduals who can compete in the market place freely, and not starve to death when (not if) they get beaten by a better sociopath.
Can that order come with a side-dish of "keep hard-earned cash away from klepto hands of Big Corp?"
Not that govt does much to shield us from the big powers (if one could even stretch it this far to include all those words in the same sentence!) But I'm thinking that we might want to navigate away from the Robber-Baron days/model: and most of the genetics that precipitated that are sitting on all the controls today (think they'd behave any differently today?).
Even so, there is an element about this transaction that is unseemly. The culture in the US encourages fairness. Endo operates entirely within the US. It gets to enjoy all the infrastructure and benefits that the federal government pays for with tax dollars.
The author needs to read Larken Rose's "The Most Dangerous Superstition".
If people don't want to purchase or borrow the book from someone, here's a one hour interview with Larken Rose on Red Ice Radio:
https://www.youtube.com/watch?v=2WirZPJtosc
Endo to the IRS: If you like your tax revenue, you can keep your tax revenue. Period.*
Tyler, so, we can do this also by (a) changing our Employee status to (b) Consultant/Contractor status, then... (c) Incorporating our consulting services into an LLC, and (d) do an "Endo"?
Is this an Endo-run, or will we get an Endo-scopy from the friendly IRS agents, who will show up on our doorstep?
That's it!
I could then charge myself for talking to myself. AND, I could also file for medical aid to help me with my issue of talking to myself!
You had me up until "The culture in the US encourages fairness."
Inn-U-Endo IRS!
In-Yer-End-Oh!, IRS!
There should be no federal income tax...
IR and COO are just a companies that have doen things like this.
Correction: Endo is saying, "F U-CK YO." 1-800-F U-CKYO, to be precise.
US corporations are incentivised by the tax code to undertake this sort of thing as its in the best interests of their shareholders. The simplist solution is to eliminate corporate taxation then this gets rid of all this financial and taxation engineering b/s. Then all you do is tax distributions to the end owners (shareholders). There is already precedence in the US tax code for this e.g. LLC's. Then companies might actually focus on maxmizing profits rather than minimizing taxes. Too simple right?
"companies might actually focus on maxmizing profits rather than minimizing taxes. Too simple right?"
I think that the financial sector is the canary-in-the-coal-mine. It long ago discovered that there wasn't any more natural growth to be had, in which case the only way forward was to create virtual-growth. Now that the financial sector can no longer keep this going the actual producers are discovering that they have to resort to such playing with numbers in virtual space.
I figure that things will (de?)evolve such that producers are only near their markets. As noted above, US markets have no place to go but down: staying in the US market means a commitment to gobble up your competition- more "virtual" playing. Rushing elsewhere is more about filling a void than about figuring there's going to be an on-gowing growth market.
Endo didn't invent this. A much bigger company did it earlier this year.
http://www.bloomberg.com/news/2013-05-21/actavis-lowers-tax-rate-to-17-a...
All companies should start doing this by default. If they don't, they're not looking out for their investors. Investors should take their money out of companies that aren't watching out for them, right?
Endo is out of it's mind to think Uncle Sam will let them get away with this unscathed. There are myriad government agencies (FDA, CMS, DOJ, EEOC, etc.) that will shut Endo down for any number of infractions. The fines and penalties will exceed any tax savings Endo thinks it will reap.
It will turn out badly for Endo. You can take that to the bank.
Endo is out of it's mind to think Uncle Sam will let them get away with this unscathed. There are myriad government agencies (FDA, CMS, DOJ, EEOC, etc.) that will shut Endo down for any number of infractions. The fines and penalties will exceed any tax savings Endo thinks it will reap.
It will turn out badly for Endo. You can take that to the bank.
Every day that I read Zero Hedge, I discover something new about Obamacare, which I did not previously know, that then boggles my mind even more than the day before! I WONDER how long can that process continue, as researchers in the mines of absurdity discover more, the deeper they dig?
I understood from this video:
http://www.youtube.com/watch?v=E9r93OxpE8g
that Obamacare had something like 11 million words of law, to which were added something like 11 million words of regulations! There are probably lots more astonishing absurdities yet there to be discovered and communicated to those of us standing on the edge of that deep pit of excavated social insanity. I feel like we probably have already passed beyond the event horizon of that social black hole, but have only just started accelerating towards being crushed beyond recognition by it.
Hockey stick. Exponential curve/function. It's all compounding. No way would I feel shocked by things continuing to get more absurd. At some point it ends...
Did no one else notice this little tid-bit in the press release?
In addition, pursuant to the plan of arrangement, for each Paladin Labs share owned at closing, shareholders of Paladin Labs will also receive one share of Knight Therapeutics Inc., ("Knight Therapeutics") a newly formed Canadian company that will be separated as part of the transaction. Knight Therapeutics will hold Impavido®, Paladin Labs' product for the treatment of leishmaniasis.
I know Steve Leishman is a complete tool, but I was unaware he had a syndrome named for him.
From Wikipedia:
Leishmaniasis is a disease caused by protozoan parasites that belong to the genus Leishmania and is transmitted by the bite of certain species of sand fly (subfamily Phlebotominae).
Looks nasty.
Just wait until those sand flies are jumbo-sized like Godzilla, thanks to Fukushima et al..
That's funny!
I sense that this will increase US/Canadian tensions (been lots of pharma battles going on behind the scenes for some time now).
Brings jobs home. Eliminate corporate tax levies.
Corporations don't pay taxes, ever. Customers of the corporation pay taxes.
You would also reduce the burden on the company and the government for all the cat-and-mouse games which result from forcing companies to collect taxes in their sales price.
"Brings jobs home."
Robotic jobs perhaps.
I wish that I could have documented this somewhere, but many years ago I forecasted a move to "bring back our jobs" which would really only be a cover to subsidize companies that would otherwise get kicked out of the foreign countries that they were operating in (think China as trade wars heat up). We'll give all sorts of tax breaks (shit that's not even offerered to existing small, local, loyal companies) for the dogs to come running back home with their tails between their legs. And we'll find that when they made their shift abroad that they incorporated a lot more automation which significantly reduced their levels of human labor required in manufacturing: yeah, right, we're going to magically employ thousands of people to assemble micro-circuits... (on one hand we're barking for smaller and smaller gadgets and then on the other hand we're barking for more jobs- can you say "cognitive dissonance?").
"The US federal corporate tax rate is 35%. There are a handful of countries around the world where taxes are much lower (most notably Ireland, Singapore, and Switzerland). Ireland, for example, has a tax rate of 12.5%. Who wouldn’t want a lower tax rate? Just pack up and move to Ireland, right?"
does any megacorp pay 35%?
what's wrong about asking for a flat tax... for corporations worldwide?
all tax code pages after the few principals are about lobbying for special, mostly big interests
either there are simple moochers and tax moochers or none
I have a serious problem with the following LIBTARDIAN statement from the article:
"Endo operates entirely within the US. It gets to enjoy all the infrastructure and benefits that the federal government pays for with tax dollars. Going forward however, Endo won’t be paying much taxes, and what it will pay mostly won’t go to the US anyway. The absence of Endo’s tax payments (about $265m in 2012) will either be added to the deficit or somehow get made up by increased taxes on the rest of us."
1. The Federal Government does not pay for all the infrastructure and benefits enjoyed by Endo. Have you looked at what the US Govt spent money on last year? Most of it went to SS, Medicaid, and Medicare. Name at least one benefit or infrastructure that the Federal Government provided to Endo. Crickets....
2. The future absence of Endo's tax remittances does not need to be added to the deficit or somehow made up by increased taxes. Since when did we have a balanced budget? Even if we did, the Federal Government should never count their chickens before they hatch anyway.
So, what if the company that is being acquired to lower the % of the also-acquired US company below 80% of the assets of the acquiring company has only one asset - an amount of gold bullion equivalent to 25% of the deal. I can see some interesting potential here.
"...Even so, there is an element about this transaction that is unseemly..."
Nonsense. Judge Learned Hand (Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934). "...Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes...."
"...The culture in the US encourages fairness..."
Nonsense on stilts. Maybe there was such a culture 100 years ago, before the rise of the Total State, but not anymore. The U.S. Federal Government is our enemy, never more than today. Do what you can to avoid their oppression, including financial oppression via taxes.
Why is it this statement is always an excuse to commit fraud and be unethical? This view is what is wrong with this country. Endo has a responsibility to do what is best for customers and stakeholders.
And then again, corporations were always supposed to be limited in charter/scope (our of concern over abuse), so indicated the wise men founding the US... I'm no longer certain of what I'm seeing wagging, the tail or the dog's body (and, with all the blurr, which one is which).
the foolish parrots who brainlessly repeat the line 'a corporations only duty is to make money for their shareholders' really are the dumbest of the dumb. really? so bernanke prints a trillion a year and lends it to the tarp banks at zero per cent so they can go buy more and more shares of our increasingly monopoly productive industries. so they get it all, and you morons have no more intelligent comment than that? we are in trouble, and it ain't just the folk shopping at walmart.
Yeah, somewhere along the line we managed self-deception, we allowed ourselves to believe that we could magically transform from animals by setting standards for conducting trade... Given all of this I'd have to say that we didn't do too bad, we DID escape direct dog-eat-dog for quite some time...
Capitalism, like all other constructs of the human mind, was always subject to the lower-order animal brain in all of us. I often wonder what it would have been like had we never allowed ourselves to fall under the spell of masters and gods (and had we never deviated from the original mechanics of "interest"). Sigh... we're still nothing more than a bunch of children, we won't stop until someone gets hurt...