Tax avoidance is the corporate American way. So spare us the Pfizer hypocrisy

US Outlook: American politicians feed hungrily at the Wall Street trough

Both Pfizer and Allergan, which is based in Ireland, are listed on the New York Stock Exchange (AP)

So Pfizer is now going to be an Irish company, despite being about as Irish as Vladimir Putin. Its “merger” with Allergan, which when completed will unite Viagra and Botox in a $360bn (£240bn) corporation, has attracted a lot of coverage this week. Not because of the enormous price tag, high-profile drugs or that it is a takeover disguised as a merger, but because of the tax implications of that Irish postcode.

By moving its official headquarters to Ireland, Pfizer could cut something like $2bn off its US tax bill by 2017. Good for Pfizer and for Ireland, less good for the burden on US taxpayers. Corporate tax receipts have been in sharp decline for 40 years and now represent a pitiful 1.8 per cent of GDP. Pfizer is just the latest to “invert” – where companies move headquarters to virtually meaningless addresses in low-tax countries while to all intents and purposes remaining based in the US. There is neat symmetry – Allergan is a New Jersey company and is only marginally more Irish than Mr Putin.

US Politicians across the divide are throwing a hissy fit. Democrats, such as Hillary Clinton, are unhappy that Pfizer is going to keep all of the benefits of being American while at the same time paying even less into the coffers that make being American attractive. It is unpatriotic, they claim, because it wants all of the benefits while contributing less to their cost. Fair point, perhaps. Meanwhile, Republicans are upset that high corporate taxes are driving American companies into inversions in the first place. The US rate is officially 35 per cent, although most (including Pfizer) pay far less. Due to the thousands of tax credits and loopholes, US corporations actually end up paying closer to 12 per cent. Less fair point, perhaps.

Either way, cry me a river. There are no hissy fits when foreign corporations move to the US, as many do and are encouraged to do. There are no hissy fits when American corporations pay pennies in tax in the UK, as companies like Starbucks, Facebook and Amazon do routinely.

American politicians feed hungrily at the Wall Street trough, and all of the current crop of presidential hopefuls pay homage to the US brand of free market capitalism that makes such inversions possible. The only one who doesn’t is Bernie Sanders, the independent from Vermont, whose brand of “democratic socialism” bears more resemblance to the French version of capitalism than the American.

Speaking of France, can anyone imagine a French company inverting into a Luxembourg-based minnow to lower its tax bill? Of course not. The French recognised long ago that business is part of national security, and only now are Americans cottoning on to that idea. Of course we Brits still like to think that everyone ought to jolly well play by the rules, old chap – and that has resulted in British businesses being international whipping boys.

Americans, politicians or otherwise, cannot complain. They created a rulebook that allows corporations to do almost anything in the pursuit of profit, and national interest be damned. The absurdly long and complex US tax code encourages avoidance on a grand scale and results in almost no company paying the full rate; Pfizer itself has been so adept at avoiding tax through foreign subsidiaries that it claims not to have made a dime in profit in the US since 2007. Yeah, right.

Don’t expect any real change either, despite this week’s outrage. In less than one year we have what is probably going to be the most divisive US general election in living memory. There is almost zero chance of a Republican House of Representatives doing a deal with the White House to amend the tax code in an election year. Thanks to the Supreme Court and its absurd Citizens United decision, corporations can spend as much as they want on elections. In a country where to be a politician is to spend most of your time fund raising, Congress is easily bought.

Pfizer is only doing what the system allows it to do, and when it comes to patriotism there is only one thing that matters to corporations: the bottom line.

Walmart is fighting a cold war against its own staff

New documents have emerged revealing that Walmart, the largest private employer in the US, takes its anti-labour stance very seriously. Of course the company is bound to recoil at the idea of organised workers; its biggest shareholders are all the offspring of founder Sam Walton who earned their billions the old-fashioned way. By inheriting them. But the depth of paranoia about a handful of staff trying to form a union, as revealed in Bloomberg Businessweek, is still something to behold. The documents were part of a case heard recently by the National Labor Relations Board, in which Walmart is accused of retaliating against employees who formed a fledgling union called OUR Walmart. A decision in the case is expected early next year.

Not only did the retail giant use surveillance technology developed by Lockheed Martin, a company better known for making weapons of mass destruction, it also managed to bring in the FBI Joint Terrorism Task Force when it heard that Occupy Wall Street might get involved. Apparently asking for better pay and conditions makes people terrorists these days. Donald Trump would approve.

Walmart is far from alone in being paranoid about the possibility that workers might actually one day organise themselves. Neither is it alone in paying wages that require full-time staff to seek government help. But even if it has company, it is the largest single offender. Meagre wages mean that almost all low-level Walmart employees are eligible for public assistance: according to the campaign group Americans for Tax Fairness, the company’s employees claim around $6.2bn per year in food stamps, housing assistance and other benefits.

What makes Walmart’s programme of surveillance all the more repulsive is that it probably spent millions of dollars on spying – money that could have been spent increasing pay and benefits for employees – while at the same time stiffing taxpayers for more than three times the amount for which Pfizer grabbed the headlines.

It’s probably only a matter of time before Walmart starts looking for an Irish postcode too.