The tax level of American pharmaceutical enterprises is likely to rise sharply

Source: Financial Times 2015-2-4 US President Barack Obama will propose a one-time tax on the high amount of cash left overseas by US enterprises, so as to obtain US $238 billion in income for repairing the damaged roads and bridges in China The White House said on Sunday that the move was a key part of the president's budget, which he will outline on Monday, and would impose a 14 per cent "transit" tax on about $2 trillion in profits accumulated overseas by US companies The proposed one-off tax is less than half the corporate tax rate in the US Critics claim that the 35 per cent tax rate for domestic companies gives them an incentive to keep their profits overseas rather than invest them at home Obama's proposal is likely to be met with opposition, and it will mean a significant increase in tax levels for US companies, especially technology and pharmaceutical companies Both groups have been shifting profits to low tax countries such as Ireland and Bermuda Mr Obama will also propose a 19% tax on U.S companies' overseas profits in the future, giving them a foreign tax credit, and allowing them to reinvest their overseas profits in the U.S without any other penalties Under the current tax system, as long as the overseas profits of American enterprises are not brought back home, they are basically or completely exempt from tax The revenue will be used to meet half the funding requirements of an ambitious six-year Road, bridge and transportation upgrade project, one of the main tasks of Obama's last two years in office, to some extent attracting bipartisan support The rest of the project will come from the existing road fund In the list, U.S pharmaceutical companies performed strongly, with 17 companies shortlisted Among them, the top 10 companies are Pfizer, MSD, Johnson & Johnson, Lilly, and Aberdeen.