Thousands of mainers and millions of Americans recently filed taxes. As a small business owner, I probably think more about taxes than the average Mainer, and every tax day I think about all of the important investments that taxes enable in our communities. Nor can I help but be immensely frustrated that the rules that apply to most of us have been bypassed for so long by the richest households and businesses – those who can afford to pay their fair share, but seldom thanks to loopholes do lobbying and preferential treatment.
“Drug companies patent the drugs we pay for to develop and then charge us exorbitant prices for them, which rise every year,” writes Emily Ingwersen. Gang Liu / Shutterstock.com
Every year dozens of Fortune 500 companies manage to avoid taxes thanks to Trump tax law and a network of corporate tax loopholes designed to help Wall Street keep as much profit as possible. The 2017 Tax Act lowered corporate taxes, brought massive profits to companies moving profits and jobs overseas, and resulted in the lowest corporate tax rates in 30 years.
Many of these companies made record profits during the pandemic, but did not pay state corporate tax on those profits. Meanwhile, small businesses like mine struggled to adapt and survive, keeping our communities together.
The special tax breaks and other perks we give prescription drug manufacturers are particularly annoying. In addition to low corporate tax rates, pharmaceutical companies also receive a steady stream of taxpayers’ money to advance their business model, including significant funding from the National Institutes for Health for research and development of new drugs. For the COVID vaccine alone, companies like Moderna, Pfizer, and Johnson & Johnson received over $ 16 billion to accelerate research and manufacture of vaccines and therapeutics. The COVID vaccine is now set to bring these companies billions thanks to our investments.
COVID vaccines are by no means unique. Most drugs developed and approved in the United States require taxpayer investment. Between 2010 and 2019, every single new drug approved by the Food and Drug Administration included tax-funded research by the NIH.
In other words, drug companies patent the drugs we pay to develop and then charge us exorbitant prices for them, which increase every year – sometimes twice a year.
It’s not just about an unfair tax system; It’s about people who are denied the drugs on which their lives depend. I feel lucky that my family has not yet had to make the difficult decisions that so many others have. One time my daughter got a terrible flu and we had to spend almost $ 400 on medication to get her well. For many families, this effort could have meant not paying rent for the month or saving on heating. I can’t imagine the stress of making this decision, and no American should have to do that.
It is especially annoying when pharmaceutical companies claim that all of these tax breaks are the only way to invest in developing life-saving drugs. Pharmaceutical companies promised to use their massive tax cuts under the Trump tax reform to cut prices and create jobs, but they mainly spent them on share buybacks and higher executive salaries.
When my business makes a profit, it is reinvested in a very different way. The vast majority of our business is done locally, which means we transfer over a million dollars annually to local subcontractors, lumberjacks, sawmills, etc. These companies, in turn, offer jobs that support families and expand our customer base. I take pride in paying taxes because I know they support the kind of thriving communities that healthy businesses like mine need. I just want Big Pharma to do the same.
The Maine Congressional delegation should urge drug companies to pay their fair share of taxes, remove tax loopholes that allow this industry to circumvent its fair share, and stop rewarding them for greed while the rest of us are in ours invested in common welfare. We’ve let these companies get away with too much for too long.
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