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 find myself reflecting on all the important investments that taxes make possible in our communities. I also can’t help but feel immensely frustrated that for so 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 seldom do, thanks to loopholes, lobbying and preferential treatment.
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 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.
Many of these corporations saw record profits during the pandemic, but paid no federal corporate income tax on those profits. Meanwhile, small businesses like mine were struggling to adapt and survive, and were holding our communities together in the process.
The special tax breaks and other perks we hand to prescription drug companies are especially infuriating. In addition to low corporate tax rates, drug companies also get a steady stream of tax money to fuel their business model, including significant National Institutes for Health funding 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. The COVID vaccine is now projected to make billions for these corporations, thanks to our investment.
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.
In other words, drug companies patent the drugs that we pay to develop and then turn around and charge us exorbitant prices for them that increase every year – sometimes twice a year.
This isn’t just about an unfair tax system; it’s about human beings who are denied the medicines their lives depend upon. I consider myself lucky that my family hasn’t yet had to make the difficult choices so many others have. Once my daughter got a terrible flu and we had to spend nearly $400 on medications to get her well. For many families, this expense could have meant not making rent or skimping on heat for the month. I cannot imagine the stress of that decision, and no American should have to.
It’s particularly galling when drug companies claim all these tax giveaways are the only way they can afford to invest in the development of life-saving medicine. Drug companies promised they would use their massive tax cuts under the Trump tax reform to lower prices and support jobs, but they mostly spent them on stock buybacks and increased executive salaries.
When my business makes a profit, it gets reinvested very differently. The vast majority of our business is done locally, which means we help move over a million dollars a year to local subcontractors, lumberyards, sawmills, etc. In turn, those businesses provide jobs that support families and grow our customer base. I’m proud to pay taxes, because I know they support the kind of thriving communities that healthy businesses like mine require. I just want Big Pharma to do the same.
Maine’s congressional delegation should push to make drug corporations pay their fair share of taxes, eliminate tax loopholes that allow this industry to dodge paying its fair share and stop rewarding it for profiteering while the rest of us invest in our collective well-being. We’ve let these companies get away with too much for too long.