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The primary incentive behind the corporate tax cuts back in 2017 was to stimulate the economy. By lowering taxes, corporate companies could theoretically earn more taxable income and use those tax savings to expand their factories, purchase new equipment, and raise business capital. Corporate expansion and growth would likely create a competitive atmosphere between companies, resulting in more jobs and higher wages for workers. Unfortunately, provisions to the tax code created a loophole that made it easier for large corporate companies to report substantial U.S. profits under a foreign subsidiary in order to take advantage of lower tax rates. This type of offshore profit shifting has enabled the large pharmaceutical company AbbVie to avoid paying billions of dollars in U.S. taxes. According to a report published by the Senate Finance Committee, AbbVie generated over $56 billion worldwide in 2021. 77% of those sales were made to consumers in the United States, but only 1% of AbbVie's income was reported in the U.S. for tax purposes. The company owns exclusive rights to the drug Humira and has raised the price of the medication 27 times since 2003. One syringe of Humira now costs $2,974, an increase of 470 percent since the drug entered the market. Additionally, multi-million-dollar bonuses have been given to AbbVie executives, which creates more incentive to hit rising revenue targets by continuing to raise the cost of the medication. (2022, July). Companies use tax planning strategies to minimize their tax liabilities, and as long as tax laws are followed, it is not illegal. While the report does not state that AbbVies actions were illegal, it does raise some serious concerns about tax avoidance and the exploitation of the system. Shifting U.S. profits to a foreign subsidiary with no employees or significant operations with the intent to avoid paying taxes could be illegal and indicative of tax evasion. AbbVie, while its tax planning strategies may align with the tax code, clearly avoids paying its share of taxes to the United States by shifting the majority of U.S. profits overseas. AbbVies actions from an ethical and moral perspective are concerning. Shifting profits to significantly reduce its income tax rate, not paying its share of taxes to the country where the revenues were earned, continually raising prices on essential medication, and distributing large million-dollar bonuses to company executives can lead to a negative public opinion of greed and dishonesty.

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