WASHINGTON, D.C. – Ahead of the U.S House’s vote on President Biden’s widely popular Inflation Reduction Act that would lower costs for families and seniors by reducing the deficit and ensuring greedy corporations pay their fair share in taxes, a new analysis from government watchdog Accountable.US outlines how the corporate interests lobbying furiously to kill the bill exemplify why it is needed.
Among the industries behind an aggressive lobbying blitz opposing the Inflation Reduction Act is the pharmaceutical industry, which claims that allowing federal drug price negotiation would hamper their research and development spending – despite the Congressional Budget Office’s conclusion that the policy would result in only one less drug coming to market in the next decade. Accountable.US’ review of R&D spending by the five-biggest U.S.-based pharmaceutical companies found the $112 billion they spent on R&D over the last three years has been outpaced by the $125 billion they spent on stock buybacks and dividends, and the $159.8 billion in profits they reported over the same period.
The U.S. Chamber of Commerce, a trade group representing numerous major corporations, has taken umbrage with the bill’s excise tax on stock buybacks and its corporate minimum tax. Accountable.US reviewed companies with representatives on the U.S. Chamber board of directors that were highlighted in an April 2022 report on Fortune 100 companies that paid “next to nothing” or “nothing at all” in U.S. federal income taxes in 2021. The watchdog found several of these companies, including Ford Motor Company, Chevron, Microsoft, FedEx, and Dow, Inc., posted increased profits and shareholder handouts, while spending billions on major acquisitions – severely undercutting the Chamber’s suggestions that these corporations cannot afford to pay their fair share.
Multi-billion-dollar corporate special interests including Big Pharma claim the sky will fall if they finally pay their fair share in taxes or negotiate fairer prices. Industry rhetoric contradicts their own public filings which show record profits, virtually no reasonable taxes paid, and huge giveaways to wealthy investors and executives. The reality is highly profitable corporations can afford to contribute more towards an economy that works for everyone, but many would prefer to keep charging seniors and families whatever they please while paying virtually nothing in return. That is why Congress must finish the job of reining in corporate greed, lowering costs, and ensuring wealthy companies finally pay their fair share.
Liz Zelnick, spokesperson for Accountable.US
The analysis is the latest in a series from Accountable.US documenting how blatant pandemic profiteering and corporate greed – including from the big meatpacking, shipping, retail, clothing, food, trucking and railroad companies — are making inflation and supply chain problems worse for everyday consumers. Billion-dollar industries are compounding the problem by rewarding those in Congress that obstruct common sense measures to curb corporate greed, lower costs for families, and ensure tax fairness – no matter how widely public supports the initiatives.
- The five-biggest U.S.-based pharmaceutical companies’ $112 billion in R&D spending over the last three years has been outpaced by the $125 billion they’ve spent on stock buybacks and dividends and the $159.8 billion in profits they’ve taken over the same period.
- Pfizer has most recently reported that its Q2 2022 net income soared by 78% to $9.9 billion, while the company spent $6.5 billion on stock buybacks and shareholder dividends in the first half of its FY 2022. The company’s CFO boasted he was “‘very pleased’” to see “‘an all-time high in quarterly sales.’”
- From 2019 Through 2021, Pfizer spent $34 Billion on shareholder handouts, compared to $31.6 billion on research & development.
- In August 2022, Pfizer—”flush with cash” from its COVID-19 vaccine sales— announced a $5.4 billion acquisition after announcing at least $18.3 billion in other deals earlier in 2022.
- The U.S. Chamber’s corporate board members have spent $101.8 billion on stock buybacks in 2021 and have announced billions in new buyback authorizations.
- Meta––whose Chief Privacy Officer sits on the Chamber’s board of directors––spent $44.8 billion on stock buybacks in 2021.
- Microsoft––whose Corporate Vice President of U.S. Government Affairs sits on the Chamber’s board of directors––spent $32.7 billion on stock buybacks in its most recently completed fiscal year.
- AllState Insurance––whose Chairman, Chief Executive Officer, and President sits on the Chamber’s board of directors––spent $3.3 billion on stock buybacks.
- Bristol Myers Squibb––whose Senior Vice President of Global Policy and Government Affairs sits on the Chamber’s board of directors––announced a new $15 billion stock buyback program in February 2022.
- The Ford Motor Company––represented on the Chamber’s board––had an effective tax rate of just 1% and went on to spend $807 million on shareholder handouts in the first half of its FY 2022, seeing its Q2 2022 net income leap by almost 19% to $667 million.
- Chevron—whose Vice President and General Manager of Government Affairs sits on The Chamber’s board and paid an effective federal tax rate of 1.8% in 2021–– reported $15.6 billion in total 2021 net income and has continued to see financial success with its net income climbing by 301% in the first half of its FY 2022 as it spent $9.3 billion on shareholder handouts and completed a $3.15 billion acquisition.
- Microsoft—whose Corporate Vice President of U.S. Government Affairs sits on the Chamber’s board—paid an effective tax rate of just 9.7% in 2021 as the company saw $33.7 billion in U.S. pre-tax earnings. In FY 2022, the firm spent nearly $32.7 billion on stock buybacks and $18.1 billion on shareholder dividends and an additional $96.5 billion on major acquisitions, including acquiring Activision Blizzard for $68.7 billion in January 2022.
- Dow, Inc.—whose General Counsel and Corporate Secretary sits on the Chamber’s board—paid a negative effective federal tax rate of 3.1% in 2021 and received a refund of $46 million, as it rewarded its shareholders with $2.1 billion in cash dividends and spent an additional $1 billion in stock buybacks.