‘It Takes A World' To Achieve Life-Saving Cures. Let's Not Penalize It

Forbes

7 days ago

The path to rapid attainment of pharmaceutical advances is a global endeavor. That's because the more hands, machines, and minds at work in the creation of that which will vanquish cancer in all its forms, heart disease, and surely future diseases we haven't lived long enough to get, the quicker we will arrive at those advances.
What's sad is that the above even needs to be said. Going back to the pin factory that Adam Smith visited in the 18th century, to the car factories that Henry Ford designed in the 20th century, to the iPhones (aka supercomputers) that are a consequence of innovative production on six different continents, it's long been known that rapid progress is an effect of spreading production across as many as possible. Applied to life-saving drugs, it will take the 'closed economy' that is the world economy to turn global killers of today into yesterday's afterthoughts.
Stop and think about this now, and with foreign income of U.S. pharmaceutical companies well in mind. They don't have overseas operations just because, or even to escape U.S. taxation, but instead because innovation doesn't stop at U.S. borders.
Much as the iPhone wouldn't be the iPhone without foreign cooperation, present and future pharmaceutical advances won't come to be without the collaboration of minds, hands and machines the world over. In other words, a tax on foreign pharmaceutical production is a tax on domestic pharmaceutical production in two ways.
To which some might say so what, American pharma is the best of the lot. No argument there.
Just the same, the best American pharmaceutical firms have acquired businesses around the world to compliment their own production, and product mix. Which means if the tax code penalizes what U.S. firms earn overseas to theoretically 'onshore' everything, they'll be taxing advances overseen by American pharma. Only for it to get worse.
The desire to excessively tax overseas production will put U.S. corporations at a disadvantage in acquiring foreign innovators in the first place. Never forget that taxes are a price, or better yet a charge levied on investment. Taxing what's not American will be paid for by American corporations.
Which calls for recognition that American production is American production no matter where it takes place. With the latter in mind, the ideal corporate tax is zero exactly because corporations as taxpaying entities are fictional. Shareholders own corporations, which means shareholders pay corporate taxes. A corporate tax is just double taxation of untaxed individual earnings. But that's a digression, and one imaging rationality about a tax code that screams irrationality.
Yet since wholly rational on the matter of taxes is an impossibility, let's at least acknowledge that great corporations generally are great because the avail themselves of global talent. That being the case, U.S. pharmaceutical companies should have their foreign production and profits taxed as it is stateside.
If so, the global cooperation necessary for pharmaceutical advancement will crucially pick up speed. The simple truth is that it takes a world to cure what ails us, so let's bring the U.S. corporate tax code up to speed with this truth.