WHAT BENEFITS ARE THOSE AGAIN?

Eric Alterman writes:

"The White House today announced it would be spending another $18 million of taxpayer money on television ads promoting its new Medicare bill.  As David Sirota points out, that puts the Administration on track to spend more Medicare money on television ads than would be necessary to create a safe system to import cheaper, FDA-approved prescription medicines from abroad.  The White House is so desperate to protect its drug industry backers, it has deployed federal agents to search and intimidate low-income seniors traveling to Canada in order to fill their prescriptions.  On top of that, Pfizer CEO Henry McKinnell - a top Bush fundraiser - 'vowed to continue efforts to cut off supplies' of medicines to Canada in an effort to starve U.S. and Canadian seniors of medicine until they stop their push for a re-importation bill."

I asked my regular pharmacist last week why I was being charged the full price for a prescription instead of my usual co-pay, and she started giving me the tired old line "Canadians don't have to subsidize the research costs of new drugs like we do." When I asked just why she thought Americans should foot the bill for everyone else she said, "Why, because they're American companies -- we get the benefit of their taxes and employment, the Canadians don't."

Dave Farber:

"These are called 'unrepatriated earnings' and they are increasingly commonplace. Just go into Free Edgar or some other SEC search engine (I like10K Wizard5) and plug in the term 'unremitted earnings' or 'undistributed earnings' and search 10-K forms to see how many annual statements come up. What you'll find is something like this from Pfizer.

''As of December 31, 2003, we have not made a U.S. tax provision on approximately $38 billion of unremitted earnings of our international subsidiaries. These earnings are expected, for the most part, to be reinvested overseas. It is not practical to compute the estimated deferred tax liability on these earnings.'

"Pfizer says it added 15,000 U.S. workers through its recent purchase of Pharmacia. STILL, ONLY 37% OF ITS WORK FORCE IS IN THE U.S. [emphasis mine] Note that the $38 billion total of unremitted earnings is cumulative over the years. In 2002, Pfizer had $29 billion, so the increase was $9 billion in the past year, helping the company substantially shave its tax bill."