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Call your senator about the awful tax bill

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Hello everyone

This tax bill is about  greed for the top 1% of the country.It also is going to vastly increase our debt and are children' s future .

It has no redeeming value to the middle and poor class.This is payback for all the billions given .

Healthcare is also being drawn into this fiasco bill.

Most corporations including drug companies today pay little taxes and many get billions in cash back from the goverment.

If anything these loopholes should be addressed before we make them worse

It does pay to call,one voice especially people like ourselves can go along way

Funny how activism  like this makes the PD blues so mute.

Senator Corker,Senator Flake,Sen.Collins Senator Johnson are on the panel which may vote today.

1-202-224.3121 is the number

Please call

Thanks

john

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The senate panel passed the bill today >now it moves to the full Senate for a vote.Most of the senators had their phones tied up and many wouldnt even take messages.I have called my senators in NY and I never got locked out as i was today.I hope many of you had better luck.This bill is even worse than anyone knew,but many republican senators also never took the time to know what their voting for which is typical today.We still have time to stop it in the full senate.

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On ‎11‎/‎28‎/‎2017 at 9:57 AM, johnny said:

This tax bill is about  greed for the top 1% of the country.It also is going to vastly increase our debt and are children' s future .

It has no redeeming value to the middle and poor class.This is payback for all the billions given .

Healthcare is also being drawn into this fiasco bill.

Most corporations including drug companies today pay little taxes and many get billions in cash back from the government.

Pure nonsense!  The top 1% of earners pay 45% of individual income taxes.  The top 20% of earners pay a whopping 84% of individual income taxes.  Forty five percent of Americans pay no taxes at all.  How much of a tax break should people get when they pay absolutely no taxes and when many get 'money back' (earned income tax credit, for example) when they didn't pay anything in the first place?

Corporations and businesses do not pay taxes.  Corporations and businesses pass their taxes on to consumers.  When the corporate tax rate is higher in America than other countries, corporations move off shore so that they have lower taxes to pass on to consumers and therefore lower prices giving them a competitive advantage.  

I don't remember you saying a word about the national debt when Obama was President.  He DOUBLED the debt.  Why didn't you complain about that?

 

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A relevant fact-not a point of argument because I don’t want to argue—almost half of the 45% who do not pay federal taxes are retirees who don’t have enough income to pay taxes. There are other points that deserve more scrutiny such as those who make the giant share of money should pay the giant share of the taxes. Also the statistics you have presented just go to highlight the fact that we have a huge wealth gap in this country and the proposed tax bill will widen this gap.  I will leave it there—no arguing intended.

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Senate Clears Procedural Hurdle on GOP Tax Reform Bill

 

The Senate cleared a procedural hurdle November 29 on the GOP’s tax reform plan, voting 52 to 48 to open debate on the fiscal 2018 budget reconciliation bill that includes the Tax Cuts and Jobs Act (H.R. 1).

The evening vote was preceded by hours of closed-door discussions among Republican lawmakers on how to secure the necessary 51 votes to pass the reconciliation package. Lawmakers also defeated a motion by Senate Finance Committee ranking minority member Ron Wyden, D-Ore., to send the bill back to the tax panel for further changes. Following the Wyden vote, Senate Majority Leader Mitch McConnell, R-Ky., was expected to offer a substitute amendment to swap in the Senate version of the tax bill.

Senate rules limit debate on the package to 20 hours, followed by a period of unlimited voting on amendments. Senate Republicans are looking to pass the legislation by December 1 in order to leave enough time to resolve discrepancies between the House and Senate versions of the proposal before the end of the year.

Some specifics of the Senate's tax reform plan remained fluid, as Republicans negotiated revisions to the bill in a bid for more support. Sen. Steve Daines, R-Mont., who previously pushed for changes to the bill to ensure it wouldn’t disadvantage small businesses, tweeted November 29 that he had secured a $60 billion tax cut for small businesses.

Details also have begun trickling out on another major change negotiated the day before — one that would set up a trigger mechanism to raise taxes in the event the bill doesn’t produce the expected economic effects. The Washington Post reported that the trigger proposal — which was added to win support from Sen. Bob Corker, R-Tenn. — would raise taxes by as much as $350 billion if the economy doesn’t grow by more than 0.4 percent annually above a baseline established by the Congressional Budget Office.

The rapid-fire changes to the bill before the floor debate began prompted Wyden to complain before the vote that Republicans had not shared updated details of the bill’s tax rates on passthrough businesses, the deduction for state and local taxes, repeal of the Affordable Care Act’s individual mandate penalty, and the fiscal trigger mechanism.

Senate Republicans are reportedly looking at a variety of options to offset the cost of the trigger proposal, including retaining the corporate and individual alternative minimum taxes, as well as an increase to the proposed 20 percent corporate tax rate, according to The Washington Post.

At least three Senate Republicans view the trigger proposal as a potential obstacle to passage. Sen. Thom Tillis, R-N.C., told reporters that the trigger idea is “well intentioned, but I don’t know if it’s well founded.” He added that when he served as speaker of the house in the North Carolina legislature, the state’s tax reform bill included a “reverse trigger” which would prompt additional tax rate reductions if growth exceeded projected numbers. Finance Committee member Dean Heller, R-Nev., and Sen. David Perdue, R-Ga., both said the trigger proposal would create an added layer of uncertainty for businesses, which may impede economic growth.

House Ways and Means Committee Chair Kevin Brady, R-Texas, declined to weigh in on the Senate measure, as he has repeatedly. “We’re going to let the Senate do their work,” Brady told reporters, reserving any judgment on the trigger proposal.

Democrats continued to rail against a provision in the Senate bill that would repeal the ACA’s individual mandate, citing a November 29 report from the CBO showing that a bipartisan healthcare compromise worked out by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., would not help 13 million Americans expected to lose insurance coverage as a result of the change or cover an estimated 10 percent rise in premiums for those with insurance.

“It is now crystal clear that if Republicans repeal significant parts of the Affordable Care Act to hand even more benefits to multinational corporations and the wealthiest, Americans’ healthcare will be devastated by hemorrhaging coverage and skyrocketing premiums regardless of any narrow measures Republicans push to try and soften the blow.” Wyden said.

Finance Committee Chair Orrin G. Hatch, R-Utah, disputed the CBO finding during a speech on the Senate floor, saying eliminating the mandate penalty would not harm people who choose not to have insurance. He said the mandate has failed to draw enough people to keep insurance rates low.

“Anyone going uninsured will be doing so voluntarily,” Hatch said. “We’re not kicking anyone off their insurance by zeroing out the individual mandate penalty, and it’s a blatant distortion of reality to claim otherwise.”

Some GOP senators view the tax measure as the last chance to pass major legislation before the 2018 midterms. After the vote to begin debate, Sen. Mike Rounds, R-S.D., told reporters that passage of the bill isn’t a simple formality.

“You never say never in this game, but for Republicans I think the vast majority of us truly believe that . . . failure is just simply not an option for us,” he said. “We have to find a way to get it done.”

Trump Stumps

President Trump spent November 29 trying to drum up support for tax reform, giving a speech in St. Charles, Missouri, extolling the benefits of a 20 percent statutory corporate tax rate found in both the House and Senate versions of the bill.

Trump described the current statutory corporate tax rate of 35 percent as “totally noncompetitive,” adding that, “For too long our tax code has incentivized companies to leave our country in search of lower tax rates.” The tax bill switches the tax code to a territorial system to bring profits back to the U.S., and it gives “a one-time lower tax rate” to repatriate corporate profits from overseas, he said.

He also contended that the bill would benefit middle- and lower-income families, saying that a family of four making $75,000, for example, would “see their taxes go down by as much as $2,000,” while many middle-income families would see their incomes rise by an average of $4,000.

“It’s not enough for the middle class to get by,” he said. “We want them to get way ahead.”

Trump also pledged to sign “a tax cut and reform bill” that Congress can get to his desk. “I will not veto that bill,” he said.

 

 

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Good morning

I got a alert last night the republican (corporate) party is sneaking this awful tax plan through,in the dead of night like usual.

Well a good contact would be Senator Susan Collins who is a great supporter for us and other people who have neurological conditions.

This plan is cloaked with big medicare and medicad cuts which will especially hurt us and most average Americans.

Her washington number is 1-202-224-2523

Make our voice heard now

Thanks

john

 

Edited by johnny
correction in phone #

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What fun reading. I was in top zone during working years. Because I saved and invest, I now have more than I need, but then my wife will need when I am gone, and my son and his family need some because he is college professor who earns about what a regular public school teacher makes in blue states. He earns more than most red state teachers, but big deal. Anyway, I am finished with fighting culture wars, race wars, economic wars, diversity wars, ideology wars, and all that crap. As for tax bill in congress right now, I could care less for me and my family, as I have mostly done all that I can do. As for future, I have little hope really, as neither Dems or Repubs are worth dry spit if you ask me. Folks, we are on our own here with these diseases I know for sure. Family helps, but that about it. My view is make the best of a bad situation, because what else can we do. I finished for today. Bill.

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I stayed up to watch the Senate vote on this social engineering project masquerading as a middle class tax cut.It had been hastily rewritten so few if anyone knew what was in it.

The democrats pleaded for more time till Monday but it fell on deaf ears.In bernie Sanders words This is the worst piece of legislation in the history of our nation.All the Democrats fought hard for all of us.

Good news there is still time to defeat this bill from becoming law so if you live in a state whose leaders voted for this awful bill let them know.

his bill also combined the healthcare repeal.Good bye coverage for preexisting conditions and now much higher insurance rates

I do so much better now cutting back on C/L as it tends to give us a false sense of security

Have a happy weekend

john

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So what is the difference between how Democrates do things? Does anyone remember the stellar behavior by the Dems on the healthcare bill. Nothing will ever change in Washington untill we vote for honest and Libertarian leaning educated people.

 

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On 11/29/2017 at 8:21 PM, Superdecooper said:

Senate Clears Procedural Hurdle on GOP Tax Reform Bill

 

The Senate cleared a procedural hurdle November 29 on the GOP’s tax reform plan, voting 52 to 48 to open debate on the fiscal 2018 budget reconciliation bill that includes the Tax Cuts and Jobs Act (H.R. 1).

The evening vote was preceded by hours of closed-door discussions among Republican lawmakers on how to secure the necessary 51 votes to pass the reconciliation package. Lawmakers also defeated a motion by Senate Finance Committee ranking minority member Ron Wyden, D-Ore., to send the bill back to the tax panel for further changes. Following the Wyden vote, Senate Majority Leader Mitch McConnell, R-Ky., was expected to offer a substitute amendment to swap in the Senate version of the tax bill.

Senate rules limit debate on the package to 20 hours, followed by a period of unlimited voting on amendments. Senate Republicans are looking to pass the legislation by December 1 in order to leave enough time to resolve discrepancies between the House and Senate versions of the proposal before the end of the year.

Some specifics of the Senate's tax reform plan remained fluid, as Republicans negotiated revisions to the bill in a bid for more support. Sen. Steve Daines, R-Mont., who previously pushed for changes to the bill to ensure it wouldn’t disadvantage small businesses, tweeted November 29 that he had secured a $60 billion tax cut for small businesses.

Details also have begun trickling out on another major change negotiated the day before — one that would set up a trigger mechanism to raise taxes in the event the bill doesn’t produce the expected economic effects. The Washington Post reported that the trigger proposal — which was added to win support from Sen. Bob Corker, R-Tenn. — would raise taxes by as much as $350 billion if the economy doesn’t grow by more than 0.4 percent annually above a baseline established by the Congressional Budget Office.

The rapid-fire changes to the bill before the floor debate began prompted Wyden to complain before the vote that Republicans had not shared updated details of the bill’s tax rates on passthrough businesses, the deduction for state and local taxes, repeal of the Affordable Care Act’s individual mandate penalty, and the fiscal trigger mechanism.

Senate Republicans are reportedly looking at a variety of options to offset the cost of the trigger proposal, including retaining the corporate and individual alternative minimum taxes, as well as an increase to the proposed 20 percent corporate tax rate, according to The Washington Post.

At least three Senate Republicans view the trigger proposal as a potential obstacle to passage. Sen. Thom Tillis, R-N.C., told reporters that the trigger idea is “well intentioned, but I don’t know if it’s well founded.” He added that when he served as speaker of the house in the North Carolina legislature, the state’s tax reform bill included a “reverse trigger” which would prompt additional tax rate reductions if growth exceeded projected numbers. Finance Committee member Dean Heller, R-Nev., and Sen. David Perdue, R-Ga., both said the trigger proposal would create an added layer of uncertainty for businesses, which may impede economic growth.

House Ways and Means Committee Chair Kevin Brady, R-Texas, declined to weigh in on the Senate measure, as he has repeatedly. “We’re going to let the Senate do their work,” Brady told reporters, reserving any judgment on the trigger proposal.

Democrats continued to rail against a provision in the Senate bill that would repeal the ACA’s individual mandate, citing a November 29 report from the CBO showing that a bipartisan healthcare compromise worked out by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., would not help 13 million Americans expected to lose insurance coverage as a result of the change or cover an estimated 10 percent rise in premiums for those with insurance.

“It is now crystal clear that if Republicans repeal significant parts of the Affordable Care Act to hand even more benefits to multinational corporations and the wealthiest, Americans’ healthcare will be devastated by hemorrhaging coverage and skyrocketing premiums regardless of any narrow measures Republicans push to try and soften the blow.” Wyden said.

Finance Committee Chair Orrin G. Hatch, R-Utah, disputed the CBO finding during a speech on the Senate floor, saying eliminating the mandate penalty would not harm people who choose not to have insurance. He said the mandate has failed to draw enough people to keep insurance rates low.

“Anyone going uninsured will be doing so voluntarily,” Hatch said. “We’re not kicking anyone off their insurance by zeroing out the individual mandate penalty, and it’s a blatant distortion of reality to claim otherwise.”

Some GOP senators view the tax measure as the last chance to pass major legislation before the 2018 midterms. After the vote to begin debate, Sen. Mike Rounds, R-S.D., told reporters that passage of the bill isn’t a simple formality.

“You never say never in this game, but for Republicans I think the vast majority of us truly believe that . . . failure is just simply not an option for us,” he said. “We have to find a way to get it done.”

Trump Stumps

President Trump spent November 29 trying to drum up support for tax reform, giving a speech in St. Charles, Missouri, extolling the benefits of a 20 percent statutory corporate tax rate found in both the House and Senate versions of the bill.

Trump described the current statutory corporate tax rate of 35 percent as “totally noncompetitive,” adding that, “For too long our tax code has incentivized companies to leave our country in search of lower tax rates.” The tax bill switches the tax code to a territorial system to bring profits back to the U.S., and it gives “a one-time lower tax rate” to repatriate corporate profits from overseas, he said.

He also contended that the bill would benefit middle- and lower-income families, saying that a family of four making $75,000, for example, would “see their taxes go down by as much as $2,000,” while many middle-income families would see their incomes rise by an average of $4,000.

“It’s not enough for the middle class to get by,” he said. “We want them to get way ahead.”

Trump also pledged to sign “a tax cut and reform bill” that Congress can get to his desk. “I will not veto that bill,” he said.

 

 

Please give a source for this article.  Is this your words, or is it from an unnamed source? I like to know where the information I read comes from.

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Here's the latest article I wrote on tax reform...

With Votes Lined Up, Republicans Release Final Tax Reform Bill

By David van den Berg and Asha Glover and Stephen K. Cooper

Congressional Republicans agreed to permanently cut corporate taxes and temporarily provide relief for individuals through 2025 in a comprehensive tax reform bill slated for House and Senate votes the week of December 18.

Republicans released their compromise tax package and related explanation of the Tax Cuts and Jobs Act (H.R. 1) on December 15, after days of negotiations to win support from the GOP’s 52 senators, some of whom fought for changes addressing child tax credits, small business taxes, and the federal budget deficit.

“The Tax Cuts and Jobs Act is now only two votes and a signature away from becoming the law of the land,” House Speaker Paul D. Ryan, R-Wis., said following the release of the conference committee report.

The Joint Committee on Taxation estimate shows the legislation would lose $1.46 trillion over the next decade, but GOP aides said the JCT is not likely to complete distributional tables until just before lawmakers vote on the bill. Republicans said in a summary that the bill would give a $2,059 tax cut to a family of four with the median income of $73,000.

House Ways and Means Committee Chair Kevin Brady, R-Texas, didn’t identify specific revenue raisers for last-minute changes to the bill during a press conference December 15. “It really was a combination of different adjustments in different areas, which we think is the most balanced way to do it,” he told reporters.

Immediate Corporate Rate Cut
The conference report would reduce the corporate tax rate to 21 percent effective January 1, 2018, and would repeal the corporate alternative minimum tax. It would also change the country’s current international tax system to territorial from worldwide and preserve the research credit.

Senate Finance Committee member Johnny Isakson, R-Ga., praised the legislation for overhauling the country’s corporate tax system “by lowering rates and adopting new international tax rules similar to our trading partners.”

For passthrough businesses, the measure would provide a 20 percent deduction that applies to the first $315,000 of joint income earned by S corporations, partnerships, limited liability companies, and sole proprietorships. Businesses in those categories with income above that level would generally be eligible for a deduction of up to 20 percent on business profits, reducing their effective marginal tax rate to a maximum of 29.6 percent, according to the summary.

Senate Finance Committee member Rob Portman, R-Ohio, said the final bill is more like the Senate’s version than the House’s, highlighting the treatment of passthrough businesses as an example. “The structure is a little closer to the Senate version because we kept our provisions for these passthroughs, which was viewed as simpler,” Portman said.

The conference report also follows the Senate legislation in its treatment of section 179 expensing. Taxpayers under current law can choose under section 179 to deduct the cost of qualifying property rather than recover it through depreciation deductions. The Senate called for increasing the maximum amount a taxpayer can expense under section 179 to $1 million and increasing the phaseout threshold to $2.5 million. Those amounts are indexed for inflation for tax years starting after 2018.

Another area where the conference report hewed closely to the Senate’s approach was on private activity bonds, retaining their tax-preferred status. The House had proposed making the interest paid on qualified private activity bonds includible in a taxpayer’s gross income. The definition of qualified private activity bonds includes exempt facility bonds. Those facility bonds include bonds issued to finance airports, ports, and other transportation projects, schools, and more.

The conference agreement rejected a House provision that eliminated the inflation adjustment of the wind energy production tax credits, which would have reduced the value from about 2.4 cents per kilowatt-hour to the base amount of 1.5 cents per kilowatt-hour, and changed how the beginning of construction was calculated.

Based on a ruling from the Senate parliamentarian, lawmakers were unable to include language that would allow churches and charities to engage in political activity.

Individual Provisions
Most individual provisions in the bill are temporary, scheduled to expire at the end of 2025.

The tax package would maintain seven individual income tax brackets: 10 percent for individuals making up to $9,525 and married couples making up to $19,050; 12 percent for individuals making up to $38,700 and couples making up to $77,400; 22 percent for individuals making up to $82,500 and couples making up to $165,000; 24 percent for individuals making up to $157,000 and couples earning up to $315,000; 32 percent for individuals making up to $200,000 and couples making up to $400,000; 35 percent for individuals making up to $500,000 and couples making up to $600,000; and 37 percent would apply to individuals making more than $500,000 and couples making more than $600,000

The bill would nearly double the standard deduction to $12,000 and $24,000 for individuals and married couples, respectively. The deduction for state and local taxes would be limited to $10,000, but taxpayers could split the write-off between property tax and either sales or income tax.

The child tax credit would be doubled to $2,000, and the bill makes $1,400 of that amount fully refundable. The credit would require that children have social security numbers issued before the due date for filing the return for the tax year.

The bill temporarily provides a $500 nonrefundable credit for qualifying dependents other than qualifying children. That credit begins to phaseout for individuals/families making over $200,000/$400,000 and is not indexed for inflation.

Sen. Marco Rubio, R-Fla., said increasing the refundable portion of the child tax credit swayed him to support the bill. The provision was added to secure the votes needed to pass the bill in the Senate, House Ways and Means Committee member Kristi L. Noem, R-S.D., told reporters after signing the conference committee report. Rubio said December 14 that he would not support the bill unless changes were made to expand the child tax credit.

The child and dependent care tax credit and the adoption tax credit were not changed by the legislation. However, the mortgage interest deduction will change for new homebuyers after December 31, 2017, and before January 1, 2026. For buyers of first and second homes, the deduction will be capped at $750,000 for couples and $375,000 for individuals.

Interest on home equity loans will no longer be deductible for tax years 2018 through 2025.

The bill would allow medical expenses to be deductible up to 7.5 percent of adjusted gross income for 2017 and 2018, before returning to the 10 percent in current law. The legislation also repeals the Affordable Care Act’s individual mandate beginning after December 31, 2018.

Parents will be able to use section 529 plans to save for elementary, secondary, and higher education, while graduate students would continue to be able to exempt the value of reduced tuition from their taxes.

The bill also would double the estate tax exemption to $10.98 million, adjusted for inflation after December 1, 2019. However, it would revert to current law after eight years, said Noem, who expressed dismay that negotiators were unable to repeal the estate tax.

Senate to Move First, House Tees Up
The Senate is expected to take up H.R. 1 before the House does, Rep. Don Young, R-Alaska., said after signing the conference report for the measure. Brady said the exact timing of the vote would be left up to Ryan and Senate Majority Leader Mitch McConnell, R-Ky.

The House Rules Committee is scheduled to consider the tax reform package December 18, setting up the lower chamber for a floor vote after Senate passage.

Portman told reporters that he believes the bill has enough support to pass both chambers. Sen. Bob Corker, R-Tenn., who was the sole Republican to vote against the Senate’s version of the bill, said that he supports the bill, even though it is “far from perfect.”

Portman added that he expects Sens. John McCain, R-Ariz., and Thad Cochran, R-Miss., both of whom missed votes the week of December 11 because of illness, will be available to vote on the bill the week of December 18.

A potential Senate swing voter, Sen. Susan M. Collins, R-Maine, had not indicated how she would vote on the bill by press time. She told reporters the day before that she would wait to review the conference committee’s bill over the weekend before making a decision. However, she did put out a release Friday evening applauding the inclusion of several provisions she fought to include.

Dylan F. Moroses contributed to this article.

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I hope some of you watched Senator Schumer last night on the TAXSCAM vote.he is a leader for all of us.In contrast gloating paul ryan actually brought up how Americans should be self supporting and not need government help blah blah blah.So you know what lies ahead and if this doesn't get people involved in government what will.I wish many people had what we have,PD courage and determination.When I get up now i leave old PD in bed for the most part I bet many of you feel that way also.Lots of calls a to get organized for next November.

have a nice Day

Happy days,happy days are here again 2018

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Organized to simply turn things back over to the Dems? In-house need a completEly different approach. Nothing is changing in the 2 party system.  things were no better under any previous administration.  just power grabs and both sides being stupid and acting like they always have.

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Dr Low said men suffer from their philosophy of life.There are two philosophy,One the world we live is positive and while their are challenges life improves.The other philosophy is mankind is doomed and not much will prevent it.he also said men live to act.

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Now this....

Column 

Pfizer, pocketing a big tax cut from Trump, will end investment in Alzheimer's and Parkinson's research

by Michael Hiltzik, LA Times Columnist

 

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-pfizer-20180108-story.html

 

ith every passing day, it becomes clearer who’s reaping the benefit of the huge tax cut handed over to American corporations by the Republican-dominated Congress in December.

Spoiler alert: Not workers or customers, but shareholders, especially the rich ones. (Don’t be fooled by those $1,000 bonuses handed out by a few big companies anxious to curry favor with the Trump White House — if they were serious about improving their employees’ lot they’d distribute the money in the form of permanent raises, not a bonus that you can safely bet will be a distant memory by this time next year.)

The big drug company Pfizer seems intent on being a pace-setter in cranking out the benefits of the tax cut to stakeholders who need them the least. In an announcement over the weekend, Pfizer said it was shutting down its research efforts on treatments for Alzheimer’s and Parkinsonism. The company didn’t say how much it was spending on the two conditions, but said about 300 researchers will lose their jobs as it redirects its research and development budget elsewhere.

It’s really alarming to see such a large pharmaceutical company deciding to abandon research into the brain and central nervous system.— James Beck, chief scientific officer, Parkinson's Foundation
 

“Pfizer routinely reviews its R&D pipeline,” the company said in its formal statement of the change. It said it was continuing its R&D programs for the drugs tanezumab and Lyrica. That’s a bit of non sequitur, since the first is a treatment for chronic pain from osteoporosis and other conditions and the latter is a drug for nerve pain caused by diabetes, shingles and spinal cord injury and is an anti-seizure medication for epilepsy patients. They do both fall within the neurology field, however, which also encompasses Alzheimer’s and Parkinson’s.

 

Pfizer’s announcement dismayed advocates for victims of central nervous system diseases, which have presented researchers with some of the most intractable challenges in the healthcare field.

Pfizer shows that its Allergan merger was only a tax dodge
 

“It’s really alarming to see such a large pharmaceutical company deciding to abandon research into the brain and central nervous system,” James Beck, chief scientific officer at the Parkinson’s Foundation, told me Monday. “It’s telling for how difficult it is to do research into neurodegenerative diseases.” Of even greater concern, he said, is that “having Pfizer exit does not augur well for what other companies are likely to do.”

Pfizer’s move also raises questions about what role Big Pharma should play in drug R&D, especially for conditions without known treatments or those with relatively few sufferers.

Research into these two diseases is about as risky as one could imagine, since no treatment thus far has been shown to have any promise in curing either disease or averting its onset; some drugs may delay symptoms for up to a year or temporarily alleviate symptoms, but patient advocates consider those to be modest advances at best.

 

On the other hand, an Alzheimer’s cure would be the very definition of a blockbuster drug, since 5.5 million Americans are known to suffer from the disease and the patient base is expected to expand markedly as the population ages. Parkinson’s afflicts about 1 million Americans, the Parkinson’s Foundation says.

Normally, that would place this research right in Pfizer’s wheelhouse. The company is explicit about basing its R&D strategy on drugs with “multi-billion dollar blockbuster potential,” as its R&D chief, Mikael Dolsten, told a J.P. Morgan healthcare conference on Monday.

 
 

No one would say that drug companies should engage in research as a philanthropic exercise, but within the context of the U.S. pharmaceutical industry, Pfizer looks risk-averse. The second-biggest U.S. drug company by sales (after Johnson & Johnson), Pfizer in recent years seems to have devoted more effort to financial engineering than biomedical engineering. In 2015, for instance, it announced a $160-billion merger with Allergan, the maker of Botox. The deal was a so-called inversion, aimed transparently at cutting Pfizer’s tax bill in part by eliminating U.S. tax on $147 billion in profits it had stashed overseas.

Although the company denied that the deal was “simply… a tax transaction,” the truth emerged in 2016 when the deal was canceled; the only thing that had changed was that the U.S. Treasury had implemented new rules that all but eliminated the tax savings. So, bye-bye, Allergan.

Pfizer is expected to be among the prime beneficiaries of the corporate tax cut. The measure allows companies to pay a tax rate as low as 8% on foreign earnings they bring home, a big discount from the 21% top rate the law assesses on domestic earnings, itself a big cut from the previous rate of 35%. By some estimates, that could be worth more than $5 billion to Pfizer alone, not counting any gains from the lower tax rate.

As it happens, Pfizer signaled how it would apply the tax savings even before the final passage of the tax bill: The company announced a $10-billion share buyback on Dec. 18, four days before President Trump signed the tax cut into law. That buyback was on top of $6.4 billion left to be spent from a previous buyback plan, and was accompanied by a 6% increase in the company’s stock dividend, which will be worth roughly another half-billion dollars a year.

 
 

For comparison’s sake, Pfizer’s entire research and development budget averaged about $8 billion a year from 2014 through 2016.

Pfizer’s diversion of its tax break to shareholders parallels its behavior the last time American companies received a tax holiday on repatriated foreign earnings. That was in 2004, after corporations promised to apply their tax savings to hiring more workers and investing in their business. Instead, they laid off workers, bought back their shares, and pumped up their CEO compensation.

Pfizer brought home more than any other company in that amnesty, $35.5 billion, according to a 2007 investigation by Sen. Carl Levin, D-Mich. From 2004 through 2007, Levin reported, Pfizer bought back more than $27 billion in stock and reduced employment by 11,748 workers.

This time around, the company is again gifting its shareholders and laying off workers. Abandoning a challenging research field is a new wrinkle, however.

What’s most discouraging to patient advocates is the dearth of alternatives to big pharmaceutical companies in brain research. Pfizer’s withdrawal, especially if it prompts other big pharma companies to flee the field, places more of the burden on small biotech firms, academia, foundations and government. The news “reinforces the urgent need for additional federal investment in Alzheimer’s research,” a spokesman for the Alzheimer’s Foundation of America told me. But the Trump administration has placed funding for government research projects in almost all scientific fields on the chopping block.

Some experts recognize that the big drug companies may have been less than sturdy partners all along. “Many groups have been hoping for quick wins in the [central nervous system] space and we haven’t succeeded,” Beck of the Parkinson’s Foundation says, “so there’s some frustration from the viewpoint of management that we’re not getting the progress we need.”

He says his organization and others will still focus on the most promising pathway to a cure: Trying to understand the mechanisms of these diseases, which are still very murky. Only once those riddles are solved can drug research truly move ahead.

But as long as purely economic considerations drive drug R&D, the prospects for progress are dim. The Republicans who drafted the corporate tax cut promised that it would lead to more business investment and therefore economic growth. But as Pfizer demonstrates, all the incentives run in the opposite direction: More investment in shareholder welfare, less economic growth, and less attention to what corporations are supposed to exist for — improving people’s lives.

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