Love them or hate them, most Americans pay their fair share of taxes into the government’s coffers as a basic duty. In return, we get roads, schools, law enforcement, health services, clean air and water and other public goods that benefit everyone.
But for too long, the rules that apply to most of us have been shirked by the richest households and corporations–those who can afford to pay their fair share, but thanks to loopholes, lobbying and preferential treatment, seldom do.
Every year, dozens of Fortune 500 corporations manage to avoid taxes thanks to the Trump tax law and a web of corporate tax loopholes designed to help Wall Street hold on to as much profit as possible. The 2017 tax law, Trump’s signature achievement, slashed corporate taxes, gave massive windfalls to corporations that move profits and jobs offshore, and led to the lowest corporate tax rates in 30 years.
It’s only gotten worse in the pandemic as corporations like Zoom Video Communications profiteered while giving nothing back in taxes even as millions lost jobs and healthcare because of COVID. Zoom’s pre-tax profits increased by 4,000% last year, from $16 million in 2019 to $660 million in 2020, but paid no federal corporate income tax on those profits.
Low corporate tax rates are just the tip of the iceberg, though, when it comes to tax giveaways for some corporations. Prescription drug companies, for instance, get a steady stream of tax money to fuel their business model, including significant funding through the National Institutes for Health (NIH) for research and development of new medicines. On the COVID vaccine alone, companies like Moderna, Pfizer and Johnson & Johnson received over $16 billion to speed up research and manufacturing of vaccines and therapeutics. That vaccine is now projected to make billions for the corporations thanks to our investment.
But COVID vaccines are by no means unique–most medicines developed and approved in the United States involve taxpayer investment. Between 2010 and 2019, every single new medicine approved by the Food and Drug Administration included taxpayer-funded research through NIH. Drug companies patent the drugs we pay to develop and then charge us exorbitant prices for them that increase every year–sometimes twice a year.
They also get tax breaks for marketing the medicines to us, which is a key strategy for driving demand for the products. There are only two countries on Earth that direct market prescription medicine to consumers–the United States and New Zealand. American taxpayers reward the drug corporations with annual tax breaks on the billions they spend for all the commercials we’re forced to watch on daytime or late night TV.
What do we get for all these tax contributions and giveaways to Pharma? Up until now, mostly we’ve gotten higher drug prices even on medicines that have been around for a long while like insulin and Epi-Pens. Although the drug corporations promised they would use their massive tax cuts under the Trump law to lower prices and support jobs, the biggest corporations mostly spent them on stock buybacks and increased executive salaries. Meanwhile a third of patients skip doses because they can’t afford the price of prescriptions.
The time has come to fix this broken system. No one should have to choose between food or medicine, rack up debt or go without insulin and blood pressure pills because they can’t afford the price of prescriptions. President Biden is right that we need negotiations and Congress should do it now. But Congress should also stop making taxpayers pay over and over again to support price-gouging: we pay for research, we pay at the pharmacy, we pay for tax breaks for the drug corporations.
Instead, Congress should make the drug corporations pay their fair share of taxes, eliminate tax loopholes that allow industry to dodge taxes, and stop rewarding these corporations for jacking up prices, aggressive marketing, and offshoring their profits.
Terry Minow is the vice chair of Big Sky 55+ and Alanna Wulf is the organization’s political and advocacy organizer.