> How much did Pfizer pay in US taxes between 2010 and 2012? Zero. What was Apple's US tax rate in 2014? 3.7%.
That would be because Pfizer legally had no profits. Apple has a 15-39% tax rate (almost certainly closer to the latter), not a 3.7% tax rate, because that's the law in the U.S.
> Like most Fortune 100 firms, through legal maneuvering, Pfizer has been offshoring profits for years in order to avoid paying US taxes.
They do this because U.S. corporate taxes are absurdly high. Of course, it's only convenient for large multinationals to avoid taxes in this fashion; those same high rates bite their smaller competitors badly, making them far less profitable (imagine having to pay nearly half of your profits in taxes annually!). The situation works out well enough for the large companies.
The reason Pfizer legally have no profits is because they've structured the transactions between their subsidiaries so that all the profits are in a subsidiary in a low-tax country. Their particular method of achieving this is apparently buying their active ingredients from an Irish subsidiary of themselves that is so expensive that the main company actually loses money on them: http://www.reuters.com/article/us-pfizer-tax-insight-idUSKCN... (Except of course they're not actually losing money except for tax purposes, because it all goes to a wholly-owned subsidiary they control.)
There's another angle to consider here as well. How much do EPS and tax profits mean to investors? Very little so long as underlying cash flow is strong.
The new game for corporations has been to minimize their taxable profits while maximizing free cash flow and returning that cash somehow to shareholders. John Malone's cable companies have reported losses or minimal profits for decades, while at the same time beating the S&P500.
Part of that was due to favorable tax breaks on cable companies which purchased and sold cable system assets between one another. This was originally designed to support cable in rural communities, but was quickly co-opted. Competitors would frequently sell assets to each other every couple of years when the tax benefits ran out to re-roll them. One big shell game.
The code is broken and until we fix it the opportunities to game the system are going to multiply. Something about a finger in the dike...
That would be because Pfizer legally had no profits. Apple has a 15-39% tax rate (almost certainly closer to the latter), not a 3.7% tax rate, because that's the law in the U.S.
> Like most Fortune 100 firms, through legal maneuvering, Pfizer has been offshoring profits for years in order to avoid paying US taxes.
They do this because U.S. corporate taxes are absurdly high. Of course, it's only convenient for large multinationals to avoid taxes in this fashion; those same high rates bite their smaller competitors badly, making them far less profitable (imagine having to pay nearly half of your profits in taxes annually!). The situation works out well enough for the large companies.