Pizza, Expats and Drugs
By Renu Zaretsky :: May 13th, 2014
As expected, the Senate could vote today on tax extenders. Senate Republicans are likely to want to make changes on the floor—meaning even more tax cuts. Just extending the now-expired tax breaks through 2015 could increase the budget deficit by $84.1 billion over the next ten years.
Is a pizza a pizza before you bake it? That is the burning question, when it comes to “take and bake” pizza. It’s not exactly edible when you purchase it, but delicious when you take it home to your oven. Problem is: Does a state apply sales tax, or not? Can you use food stamps to purchase one, or not? (If it’s taxable, you can’t.) The Streamlined Sales Tax and Governing Board will make recommendations on the issue this month, given very blurred and conflicting states’ policies. Frozen pizza, by the way (inedible at the store, and at least decent after some baking) is not subject to sales tax, as it’s a grocery item.
Sales taxes aren’t dampening Japan’s spirit. Japan raised its sales tax from 5 percent to 8 percent last month, and reports of the nation’s poor economic reaction were greatly exaggerated. Bank of Japan Governor Haruhiko Kuroda stated in an interview that the negative shock from the higher tax “is as we anticipated or even slightly less than we anticipated.”
“Wherever we go, whatever we do…” Some Americans are not so happy to be “together, wherever” with the United States. The US is the only Organization for Economic Cooperation and Development member that taxes its citizens no matter where they live. Complying with U.S tax law is no simple or inexpensive feat, either for workers, employers, or foreign bankers, given the Foreign Account Tax Compliance Act. A foreign company’s compliance costs due to US rules are estimated to be $7,000 per hired American; accounting costs for expats are roughly $4,000 a year, according to the Swiss-American Chamber of Commerce.
It’s all about the taxes (and probably not the drugs). Is Pfizer trying to buy AstraZeneca because of the drugs the company manufactures or for the tax break? AstraZeneca does not make top experimental drugs for cardiovascular disease, diabetes, or cancer. Pfizer, however, stated that it did in its bid to buy the company. At the same time, a merger would make it possible for Pfizer to cut $3 billion in costs and get a lower corporate rate by receiving its mail in the UK. It predicts its earnings per share would rise by 14 percent three years from closing.
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