Sen. Raphael Warnock, D-GA, has introduced legislation that he says will close a tax loophole regularly used by pharmaceutical companies to move profits offshore and pay significantly lower corporate tax rates. He was joined by Finance Committee Ranking Member Ron Wyden, D-OR, Mark Warner, D-VA, and Peter Welch, D-VT, in introducing the ‘Close the Round-Tripping Loophole Act’ this week.
“We should not be giving tax breaks to major drug companies that exploit our laws to hide their profits,” said Warnock. “This critical legislation provides a commonsense fix that helps lower our deficit while forcing Big Pharma to pay their fair share. I urge my colleagues to pass this bill as quickly as possible.”
According to Warnock, the Close the Round-Tripping Loophole Act closes a loophole that large corporations, especially pharmaceutical companies, have used to shift their profits offshore. This legislation would help ensure that companies pay U.S. corporate taxes on profits made in the United States by making it harder for corporations to shift this income to low-tax countries.
No small businesses would be subject to these provisions, Warnock said. The proposal would only apply to corporations that average at least $100 million in annual revenue.
“I’ve spent years investigating Big Pharma’s many tax schemes, and round-tripping is one of their go-to dodges,” said Wayden, who teamed with Warnock on this bill. “This kind of loophole is what makes middle-class workers whose taxes come out of every paycheck feel like they’re getting ripped off, and the fact is, they’re right.”
Warnock said the introduction of the legislation is his most recent effort to “combat corporate greed and hold big pharmaceutical companies accountable.” In August 2022, Warnock introduced legislation to combat corporate greed and incentivize companies to lower prices at the pump for Georgians by raising taxes on oil and gas companies that utilized greedy practices.
In February 2022, Senator Warnock pushed to cap the cost of insulin and prescription drugs for seniors on Medicare.
