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Assessing The Impact Of Possible Transition Tax On Pfizer's Bottom Line

On Monday, President Barack Obama proposed nearly a $4 trillion budget for the fiscal year 2016. One of the proposals in the FY2016 budget is a one-time 14% tax on U.S. companies' overseas earnings. The U.S.'s high corporate tax rate has prompted a number of companies, especially in the technology and pharmaceutical sector, to not repatriate their foreign earnings. Unlike most countries, the U.S. levies a tax on foreign earnings of U.S.-based companies. In fact, this was one of the reasons why many pharmaceutical companies last year tried to complete tax inversion deals that would have allowed them to shift their headquarters outside the U.S. and in the process bring down their effective tax…