Wednesday, July 16, 2014

Tax Reform, Not Tax Inversions, Will Rescue U.S. Medical Innovation

A Goldman Sachs research note explains the stakes in the current spate of tax-inversion deals by U.S. firms taking over foreign targets. Most of the listed firms in the pharma, bio, and medical-device industries have over half their sales outside the U.S. Because of our horrific corporate tax code, they end up with incredible chunks of cash overseas. Eli Lilly, for example, has 89 percent of its cash overseas. Edwards Lifesciences, Amgen, Merck, Varian, Covance, Baxter, and Abbot all have at least 80 percent of their cash offshore.

Because they cannot bring the cash back home without greedy politicians getting their hands on it, these firms’ ability to invest in the U.S. is limited.

Read the entire column at Forbes.com or the National Center for Policy Analysis Health Policy Blog

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