SOURCE: Garza & Harris

April 11, 2016 06:00 ET

Attorney Joe Garza: Attacks on Corporations May Hurt American Citizens

The Crackdown on Corporate Tax Avoidance is Well-Deserved, but the Government Must Ensure That U.S. Citizens Will Benefit in the End

DALLAS, TX--(Marketwired - April 11, 2016) - The U.S. Treasury Department took another well-aimed blow at the pharmaceutical industry on Monday night when it announced significant measures to curb the use of "tax inversions." President Barack Obama added his support on Tuesday, calling inversions "one of the most insidious tax loopholes out there." Although the halt on tax inversions will affect all American corporations, American pharmaceutical companies will shoulder much of the burden.

"Nobody likes Big Pharma, and that's not by accident," said Senior Partner of firm Garza & Harris, Joe Garza. "But making things harder on U.S. corporations doesn't help ordinary citizens all that much. In fact, it may hurt them." According to Garza, making the cost of business higher for pharmaceutical companies will trickle down to the American people in the form of even higher drug prices.

"U.S. corporate tax rates are already the highest among competitive countries," said Garza. "If we punish corporations further, they will pass those costs down to consumers." In California, voters will decide on a November ballot measure aimed at holding down drug costs. Garza has expressed concern that the U.S. Department of Veterans Affairs, to whom the new drug costs would be tied, and taxpaying California citizens would take the brunt of such legislation.

Costs are passed down to U.S. citizens with each anti-corporate legislation, and Joe Garza offers two alternatives to current government action. "First of all, bring down the high corporate tax rate," said Garza. "Secondly, introduce heavy regulations on pharmaceutical direct-to-consumer advertising." Reuters states that pharmaceutical companies spent $4.5 billion on advertising in 2015 -- if such expenditures were made illegal, as they are in most countries, pharmaceutical companies could absorb price slashes without cutting spending on research and development.

Whatever the strategy may be, government officials are cracking down on tax avoidance. The beneficiaries of such a crackdown remain in question, however.

"While we all want corporations to pay their taxes, we want the U.S. citizens to win in the end, not necessarily the government," said Garza. 

Contact Information

  • Contact:
    Danielle Dawson
    (972) 332-0072