Rx for Rip-Offs: Pfizer Tax Breaks Benefit No One but Themselves

It’s enough to make you reach for your blood pressure medications. The PhRMA giant Pfizer has been pocketing “yuge” tax breaks, only to raise drug prices, cut back essential research, lay off workers, and raise its CEO’s salary to stratospheric heights.

Tax Windfall, Price Hikes. With an $11 billion windfall from President Trump’s tax cuts, Pfizer reported $12.27 billion fourth quarter profits last year.

  • These eye-popping profits came after Pfizer raised prices on 20 drugs by almost 10 percent, including Pristiq, Lipitor, and Zoloft, which are available as generics.
  • Earlier in the year, Pfizer jacked up prices for another 91 drugs by an average of 20 percent.

Cutting Back Research, Laying Off Workers. Meanwhile, Pfizer is ending its research programs for new medications for Alzheimer’s disease and Parkinson’s disease.

  • The PhRMA giant is laying off 300 employees in Cambridge and Andover, Massachusetts, and Groton, Connecticut.

CEO Gets 61% Pay Raise. But it isn’t all layoffs and long faces at Pfizer. Chairman and CEO Ian Read is getting a 61 percent pay raise to $27.9 million. His pay package includes:

  • A base salary of $1.96 million;
  • A $2.6 million bonus;
  • $13.1 million in equity awards;
  • And an $8 million special equity award.

Can’t Afford to Lose Him. At a time when older workers are being discarded and younger workers suffer from “no-compete” contracts, Read, who is 65, is benefiting from both.

  • Pfizer’s board approved Read’s lavish pay package to offer him a “compelling incentive” not to retire.
  • As part of the deal, he agreed not to work for a competitor for two years after eventually retiring.

States’ Trickle-Down Tax Cuts Shortchange Schools, Prompt Protests

Inspired by West Virginia teachers’ successful strike, educators around the country are taking a stand for the raises, resources, and respect that they need. These teachers—and the communities they serve—are coping with the consequences of trickle-down tax cuts that are shortchanging their schools and students.

Statewide Actions. In Arizona, teachers held a statewide day of action on Wednesday, March 28, including a late-afternoon rally at the state capitol in Phoenix, to protest low teacher pay and school funding.

  • In Oklahoma, in response to educators’ protests, the state House of Representatives approved a $447 million tax increase to fund pay raises for teachers, school support staff, and state employees.
  • The measure—which now needs the state Senate’s approval—provides first-year teachers with a $5,000 pay raise, along with future increases based on experience.

Irresponsible Tax Cuts Shortchange Schools and Students. As the Center on Budget and Policy Priorities reports, the protests in Arizona and Oklahoma were prompted by “excessive state tax cuts that have shrunk state revenues and thereby made it harder to devote adequate resources to education.”

  • Arizona’s schools are the nation’s second-worst-funded schools, and Oklahoma’s are the fifth-least adequately funded.
  • Both states passed huge tax cuts before the Great Recession that tilted toward big business and the rich. And then they cut taxes even more.
  • Arizona cut corporate taxes by 30 percent in 2011 and also reduced taxes on capital gains.
  • In 2004, Oklahoma cut the top income tax rate, with the last reduction taking effect in 2016, in spite of a $1 billion state revenue shortfall. The energy-rich state also substantially cut its taxes on oil and gas companies.

Workers Get Wise to GOP Tax Scam

The Republican tax scam doesn’t fool Bryan Barkalow, a lumberyard worker in Dayton, Ohio. President Trump is “pulling out jazz hands [razzle-dazzle] and shiny stuff up front and will screw us on the back end,” he warns. Dan Marker, a worker at a machining and welding shop, says, “Probably my biggest concern here is that, if Washington cuts taxes, fine, what services are they going to do without?”

Tax Scam Support Stalls. Barkalow and Marker are among two dozen workers in the Dayton area who expressed growing doubts about the GOP tax plan.

  • Recent national polls show support for the law stagnating, in spite of multi-million-dollar advertising campaigns promoting it, including a blitz bankrolled by the billionaire Koch brothers.
  • The latest Quinnipiac University survey shows 50 percent opposed and only 36 percent in favor.
  • Only 24 percent of working Americans say their paychecks have increased because of the tax plan.

Social Security, Medicare, & Education on the Chopping Block. Working Americans understand they’re being stuck with the bill for $1 trillion in tax cuts for large corporations and the super-rich. The Trump administration’s budget cuts Medicare, Medicaid, Social Security, public education, and college aid from working families.

Benefits Go to Shareholders, Not Workers. More than 70 percent of the corporate tax cuts are enriching shareholders without raising wages or creating jobs.

  • Companies are on track to buy back a record $800 billion of their own shares, artificially boosting stock prices.
  • The other perks for Wall Street—increased dividends and costly corporate mergers—aren’t promoting economic growth, new jobs, or pay raises.

 

Tax Scam Swells CEOs’ Portfolios, Not Workers’ Paychecks

Two months after President Trump signed the Republican tax bill with promises of big raises and new jobs, 98 percent of workers aren’t even getting bonuses.

Instead, the “tax scam” encourages giant corporations to reward their CEOs and major shareholders while shedding tens of thousands of employees and shortchanging customers.

  • Buybacks Balloon Stock Prices: Since President Trump signed the bill into law, corporations have spent more than $120 billion on buying back their own stocks, thereby inflating executives’ and investors’ holdings.
  • Only 2% of Workers Get Pay Boosts: These billions of dollars in buybacks total 20 times the much-ballyhooed bonuses and all-too-rare raises that have been credited to the tax law. Only two percent of working Americans have received such bonuses or raises, according to a survey by Reuters.
  • Banks Make Out Like Bandits: Wells Fargo ripped off its customers with over 3.5 million unauthorized bank accounts and credit cards. It pocketed a $3.35 billion bonanza from the Republican tax bill. And now, it’s closing over 800 branches. Meanwhile, after getting a $2.7 billion tax cut, Bank of America bought back $5 billion of its stock and hiked its fees on low-income customers.
  • Tax Scam Subsidizes Layoffs: With at least $2 billion in tax savings, Walmart laid off over 12,500 employees. And Kimberly-Clark even bragged that the tax law gave it the flexibility to lay off over 5,000 workers.

Trump’s Budget Makes Working Families Pay for Tax Cuts

In December, President Trump and the Republican Congress pushed through $1.5 trillion in trickle-down tax cuts, with big business and the super-rich pocketing 82 percent of the benefits. Now we know who Trump wants to pick up the tab: YOU.

Working Families Forgotten. In next year’s proposed budget, Trump cuts $1.5 trillion from core government programs, like the ones that help working families afford medical care, educate their kids from kindergarten through college, find and keep new and better jobs, and put a roof over their heads and food on their tables.

Let’s review that again: Under the Trump plan, corporations and the super-wealthy get to pocket nearly $1.5 trillion—that’s TRILLION—and pays for it by cutting $1.5 trillion in programs that help average families.

Americans Oppose These Cuts—What Will the Republican-Controlled Congress Do?  By overwhelming margins, Americans oppose cuts in these programs, especially Social Security, Medicare and Medicaid, which Trump promised not to harm. Now, Congress will have the last word on the budget.  Will they stand with working families or the billionaires?

Using Tax Cut, Kleenex Maker Wipes Out Jobs

The $1.5 trillion Republican tax cut was supposed to create jobs. But giant corporations are using their savings to kill jobs and reward investors.

Record Profits. No hardship case, Kimberly-Clark—which makes Kleenex, Huggies, Kotex, and other popular brands—racked up $3.3 billion in profits last year. This year, it’s shooting for even more by taking aim at the American workers and communities who built the company.

Tax Breaks Pay for Layoffs. Adding insult to injury, Kimberly-Clark is using its tax breaks to get rid of 10 manufacturing plants and wipe out about 5,500 jobs. In an earnings call, its chief financial officer said “cash flow benefits” from the tax cut will fund “the restructuring program over the next few years.”

Enriching Investors. But, while workers are getting the shaft, investors are getting a goldmine. After buying back $900 million of shares last year, the company is repurchasing another $700–900 million this year and increasing dividends for its shareholders.

Socking It to Wisconsin. Republican House Speaker Paul Ryan pushed through the corporate tax cuts that paid for the plant closings. Now, his home state is taking the hit: Kimberly-Clark is shuttering two plants in Wisconsin, destroying about 600 jobs.

Republican House Leader Thinks $1.50-a-Week Increase is Just Fine for Workers

Rebublican House Speaker Paul Ryan took to Twitter this week to boast that a school employee’s $1.50-a-week raise proves the Republican tax law is delivering pay increases for working Americans.

On Saturday (February 3), Ryan tweeted: “A secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week … she said [that] will more than cover her Costco membership for the year.”

As you’d expect (but Ryan didn’t), the angry responses “broke the Internet” before he deleted his tweet hours later. Social-media users reminded Ryan that the super-rich are getting supersized tax cuts, while working Americans are being shortchanged.

  • The school secretary’s raise adds up to $78-a-year. That’s enough to afford a $60 Costco Gold card but not a $120 Gold Star Executive membership.
  • In the meantime, as a thank you for their massive tax cut, right-wing, billionaire mega-donors Koch Brothers gave Ryan $500,000 in campaign donations right after the House passed the tax bill. They’re getting tax cuts of at least $1 billion each this year—enough to buy themselves a Congress full of Paul Ryans.