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OPINION
Mylan

Corporate taxes aren't corporate patriotism: Column

Robert J. Coury

For the last several weeks, President Obama, politicians, Washington insiders and some in the media have filled the airwaves with inflammatory rhetoric about "inversion" transactions, in which U.S. companies reincorporate overseas. They suggest that such companies are "unpatriotic" and "corporate deserters" — serious charges to level against companies that, even after inverting, will employ tens of thousands of Americans, play a vital role in the U.S. economy and pay significant taxes on U.S. income.

As the executive chairman of one of those companies, I've been stunned by the willingness of politicians to choose easy political sound bites over trying to solve the real issue.

As these politicians hit the campaign trail with misinformation, we want the facts to be known.

Mylan is a true American success story, one that started when two Army buddies launched a business in 1961 in rural West Virginia out of the trunk of their car with the goal of bringing access to medicines to those in need. Mylan remains committed to that same goal, and is now a leading pharmaceutical company with $7 billion in annual revenue and a workforce of more than 20,000, including 6,000 employees in the U.S.

America's system of worldwide corporate taxation was enacted the year after Mylan was founded. Since then, our industry and the global economy have changed dramatically, but our tax code has not. While we sell products in 140 countries, the U.S. is one of the only countries that taxes companies on income that was earned (and already taxed) in another country. All of our major competitors were either founded outside of the U.S. or have recently inverted, and benefit from more attractive tax structures. This significant competitive disadvantage could put our corporation, and all of our high-quality U.S. jobs, at risk.

To continue to succeed, we cannot stand still. Recently, we announced an agreement to acquire a business from Abbott Laboratories that will diversify and strengthen our business. It also allows us to implement a global tax structure that will enable us to compete more effectively in the global economy. Despite this transaction, Mylan will still pay U.S. taxes on the money we earn here.

Corporate taxes can be complicated, but this situation is really no different than how your family decides where to live. It's why many members of Congress live in Maryland or Virginia rather than Washington, D.C. The lower your tax rate, the more you have to spend on things like home improvements or college tuition. If your friends and family have a lower tax rate than you, they can afford to pay more for those things and you can't keep up.

The same applies here. Our competitors have significantly lower tax rates and therefore can afford to invest more in their businesses. This disparity in taxes potentially makes us an easier acquisition target, which could result in the downsizing or elimination of our U.S. facilities and workforce. This debate should not be about "patriotism." Calling an inversion unpatriotic is the equivalent of saying Americans are not patriotic when they don't buy American. This is simply not realistic in today's world. For example, antibiotics are no longer made in the U.S. because the influx of foreign competition has made it unsustainable to produce them here. Should Americans stop taking these lifesaving medicines because they aren't "Made in the USA?"

As sad as it is to hear people carelessly throw around words such as "unpatriotic" to describe our company, it would be sadder still to see our facilities in the U.S. boarded up because we were acquired by or unable to compete with companies that benefit from a more competitive tax structure.

We would rather continue to fight on behalf of American competitiveness, and we ask you to stand with us to compel politicians to stop the rhetoric and tackle meaningful tax reform.

If Mylan can find itself in this situation, so can any American company, or for that matter any citizen. Perhaps the next target will be individuals who seek professional advice to lower their taxes. Does that make them unpatriotic?

Patriotism is defined as having great love for your country. We do love this country — enough to fight for the jobs that are in it and push for the changes that are needed to save the American dream for the next set of buddies that set out to change the world.

Robert J. Coury is executive chairman of Mylan, Inc.

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Mylan headquarters in Canonsburg, Pa.
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