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Floor Speech
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Mr. WHITEHOUSE. Mr. President, I thank Chairman Wyden. This is a really important investigation, and it bears very exactly on the Republican tax scam that is being cooked up right now here in this Congress, because one of the keys to the Republican tax scam that is being cooked up right here in this Congress is giving big corporations the ability to move their profits--and even their jobs--offshore, away from America, and get a tax break for doing that. And the total value of this tax break--the award to big corporations from Republicans for moving American jobs and profits offshore--is running at about $140 billion that other taxpayers are going to have to make up.
Big Pharma is the big winner in this offshore tax scam. If you look at Big Pharma's numbers, most sales are to U.S. patients. They sell their pharmaceutical products to Americans. But when you look at their financial reporting, 75 percent of their profits are declared as coming from outside of the United States. So you have some funky math going on here because we know that Americans are charged more for Big Pharma's drugs than people are overseas.
They overcharge Americans, Americans pay the highest prices, and most of the sales are going to Americans who are paying the highest prices. So how is it that, when most of their sales are going to Americans, who are paying the highest prices, that is not where the profits are reported? The profits are reported from overseas, where they have fewer patients paying lower prices. How does that work? That works S-C-A-M, scam. And that is what the Republicans in Congress are trying to push forward into the future.
Thanks to the terrific work of our chairman, we have some specific examples. The Republican tax scam went into effect in 2017. So they had to move pretty quickly. So we are looking at now 2019. How quickly did pharma enjoy the benefit of this tax scam at Americans' expense?
Well, AbbVie is one company. In 2019, it declared three-quarters of its sales to American customers and essentially all of its profits offshore. As pharma does, they charged Americans the highest prices, and they sold 75 percent, nearly, of their drugs to those highly priced American customers, and yet they claimed that all of their money came from the small fraction of their sales that they made at lower prices offshore. Again, S-C-A-M.
Who gets hurt? Well, who gets hurt is American workers because, very often, the jobs go offshore along with the profits. So an American worker loses his job so that an American company can move that job offshore and pay some foreign person for the work that should be here and gets rewarded by Republicans in Congress for a tax break for doing that.
Who else gets hurt? Small businesses get hurt because, if you are running a small business, you can't set up this elaborate tax scam. You don't have the accountants. You don't have the lawyers. You may not even have the nasty motive to try to cheat your own government this way. So small businesses take it in the neck against the big businesses that can dodge their taxes through this complicated scam.
And even some big American domestic companies, like Rhode Island- based CVS, which are all-American companies, which don't fake their profits to be coming from Bermuda or the Cayman Islands or Singapore or wherever else, they suffer too because they are in competition with the big multinationals that are playing shell-and-pea games with their profits to hide it from the IRS.
So here is the racket: One, you overcharge Americans. Two, you use the money that you earn from overcharging Americans to come to Congress and buy massive amounts of influence and get the Republican Party to do exactly what you want. And what you want is stage 3, the tax scam that lets you pretend you are making money offshore when you are really not, and then you save money by not having to pay taxes. And then you keep overcharging Americans, you keep buying Congress, and you keep the tax scam going. It is rinse and repeat, and the big losers are Americans.
Where it comes home is where the chairman did his outstanding work for Pfizer. And $20 billion is what Pfizer sold in drugs in America; $20 billion is what Pfizer sold in drugs overseas. They charged more to Americans because pharma charges more to Americans. We know that. And yet Pfizer told the IRS that all--all--of its profits came from offshore--all of it--and, as a result, they got a huge, huge tax dodge.
So whether it is AbbVie or whether it is Pfizer or whether it is the industry as a whole, we need to shut down this tax racket. It is not serving anyone. It costs American jobs, it is unfair to small businesses, and it cheats the regular taxpayers who pay their taxes honestly and can't pretend that the revenue they made off American customers is somehow magically appearing out of the Cayman Islands or some other foreign hideaway.
I thank Chairman Wyden for his amazing work.
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