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Burger King Shrugged
Progressives are outraged. “But that’s so unlike them, Jon.” I know, but this time they mean it.
Burger King, a fast food establishment I last visited during the Clinton administration, has determined that their tax bite is a bit lower if they incorporate in Canada rather than the U.S. Or something like that. I’ll let the experts explain:
Miami-based Burger King confirmed on Tuesday plans to buy Tim Hortons for about $11 billion, creating a new fast-food giant that will be based in Canada. The relocation of such a high-profile American brand drew new scrutiny to the debate over so-called tax inversions at a time when U.S. lawmakers look to stem the growing wave of company departures…
In an inversion, a U.S. firm relocates—usually through a merger with a smaller company—to a country where tax rates and rules are perceived to be friendlier, but it typically continues to be managed from the U.S.
To stem lefty anger and federal backlash, BK insists the move has nothing to do with taxation. However, it’s tough not to notice that the U.S. statutory tax rate is 35% and 15% in Canada. Wall Street noticed as well, sending Burger King’s and Tim Horton’s stocks soaring.
When Canada resembles a Caribbean tax haven, it might be time to re-assess America’s absurd corporate taxes. But the Left’s outrage machine is just getting started. Angry social media mavens are calling the executives “tax cheats” and “traitors” while left-leaning websites demand a boycott. Perhaps more disturbing are the comments by U.S. Senate Banking Subcommittee Chair Sherrod Brown (D-Ohio):
”Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders. Burger King has always said ‘Have it Your Way’; well my way is to support two Ohio companies that haven’t abandoned their country or customers.”
I imagine several Democrats are re-evaluating their opposition to a secure border. However, they prefer a fence on the northern border designed to keep Americans in. Perhaps Obama should simply ban businesses from leaving the country. That strategy worked great for Venezuela, though I recommend we create a Strategic Toilet Paper Reserve ASAP.
Thankfully one Democrat is fine with the move. Warren Buffett’s investment firm, Berkshire Hathaway, is helping to finance the deal. His overtaxed secretary was unavailable for comment.
Published in General
To the Left, a woman learning self defense is internalizing her victimhood and a company that uses legal means to reduce its taxes is a traitor. How do these people win, again?
I wouldn’t know. The entire Progressive philosophy seems propelled by the belief that people will act contrary to their nature and self-interest, and the constant surprise and outrage when people don’t act contrary to their nature and self-interest.
The funny part is that this arises at the same time that our government is going after McDonald’s for not empowering labor unions. What’s their beef with burger makers lately?
Perhaps they are frightened by the mascots. Clowns, you know. And there’s something about the Burger King…
Progressives are also filled with people who having never run a business in their life are convinced that they can run a business better than people who have.
These 19th-century burger barons are clearly on the wrong side of history.
Michelle Obama’s healthy food agenda?
Brown has called for a boycott of Burger King. That means we need to have an anti-boycott. Take the kids to Burger King today! We have one within walking distance.
Or, Burger King figured that as bad as things were already, they didn’t want to stick around and have the regulators start targeting them also. When the cowboys come to town, it’s time to get out of Dodge.
Right. Of course. Did they say it was to achieve “synergy?” That’s when you know their explanation is a load of … manure.
Actually, the REAL reason was that their HQ in Canada leaves a smaller carbon footprrint.
?So what will Sherrod Brown do when Wendy’s and White Castle wise up and do the right thing for their shareholders.
There’s something not quite right about a sitting Senator calling for Americans to boycott a private company.
Isn’t that like, I dunno . . . slandering American citizens from the Senate floor, as Harry Reid has done more times than I can count?
Of course, this will not harm him at all, but it should.
Speaking of anti-boycotts, here’s a smile-inducing story from Milwaukee.
What every good progressive needs on their smart phones:
The buypartisan app.
It’s all about the idea Burger King is “Stealing Their Money”. Think back a bit when one of Facebook founders cashed out and moved offshore. There was great outrage of supposed theft then as well. Seems some get loud when someone leaves town and takes the Candy away.
Oddly it was never their Candy anyway. Talk about entitlement thinking, grossly irresponsible behaviour to be kind.
Yeah, I smiled, and I laughed out loud at this:
The boycott even has the support of a radical leftwing blogger who wrote, “Apparently, the owners of Maria’s Pizzaria [sic] only support these freedoms for themselves and the rest of us can just shove a pepperoni up our backsides.”
…and laughed even louder upon realizing that I heartily agree with a conclusion drawn by a radical leftwing blogger.
But wait! Didn’t Burger King have the Pride Whopper? Did this earn them no points in the Oppression Olympics? Leftist memories are short, it seems.
Et tu, BK?
One of these days, I’ll walk out my door and find the roads painted like rainbows. Even a Care Bear would long for grey.
They need to have their views regularly affirmed, and seek daily tribute from the masses. A “Pride Whopper” yesterday . . . well that happened yesterday. What have you done for me lately?
I saw on Brett Baer today that Burger King is a subsidiary of some Brazilian multinational equity firm. So wouldn’t the patriotic thing be to move to Rio?
Wait…I thought corporations were horrible and evil…at least that is what all the lefties I know tell me (including my son) shouldn’t they be happy they have left the country?
El Guaper has a plethora of patties.
Dang! There goes the buycott.
My son asked if we could go to Burger King last night. We went. I didn’t want to be confused with a Democrat Senator.
One more blurb about the hypocrisy and stupidity of career politicians. Just for clarity’s sake, Large international corporations that “move off-shore” end up paying more US taxes, not less.
In practice LICs do not bring the funds they earn overseas into the US so they pay 0 $s tax on them. When they need extra funds for expansion or other purpose in the US, they borrow the money, i.e.; sell bonds, the interest they pay on the bonds is tax deductible, thus lowering the amount of tax they pay in the US. When they “move off shore” this practice is no longer necessary because their off-shore funds are available to finance US expansion. Their tax rate goes down, but the net amount of taxes they pay goes up. BK is a US brand, the company happens to be foreign owned.
Because amazingly and confoundingly, the GOP (aka, and fittingly, the Stupid Party) still doesn’t understand that it’s not primarily the message, it’s the means of communication.
The Left will win the Burger King battle in the court of public opinion, because the corrupt American “mainstream” media will make sure of it. Wet, lather, rinse, repeat. When will the braindead GOP braintrust figure this out??
I take this as yet another example of mind-numbing, bottomless incompetence that characterizes the present-day US government, although it well-suits the people who prosper from it.
It is blindingly obvious that the US corporate tax rate is too high- I recall that both George Bush and Barry Obama have said as much- but neither did anything about it.
It’s also fascinating yet completely typical that Warren Buffett- a loathsome individual and contemptible hypocrite- is happy to finance this deal. Plainly he has no trouble at all with the high corporate tax rate, or else he’d be attempting to get it changed much like how he attempted to set the inheritance tax for his own benefit.
And it ain’t just him. Remember, politically connected corporations are routinely able to write major sections of these thousand-page laws that no one reads. So I think if American corporations wanted the corporate tax rate lower they’d be able to get it lowered.
Especially when I recall that the party that supposedly wants a lower corporate tax rate ran the government a few short years ago.
Hey, I’ve got more.
So let me get this straight- or at least express my understanding of what I see above. I admit beforehand I may be misunderstanding it.
BK engages in some legal maneuvers, etc, moves its HQ to Canada, but retains its US operations in the US– and hence lowers its tax bill significantly.
Hmmmm. So an American corporation based in America- say McDonalds- pays one rate- and a foreign corporation based in foreignland pays another much lower rate.
Gosh. This sort of reminds of how Western powers used to force various non-Western nations to have a special legal regime for Western citizens, exempting them from many local laws.
Was the United States conquered by foreignland? Or, in this case, Canada? If not, then why are Canadian corporations allowed to operate in the US and pay a much lower tax rate than American businesses?
Something’s fishy there.
This seems like a fine opportunity for a political party to make hay, if only there was an American political party with a nationalist bent.
Or, at least, pro-American.
Burger King and every other company that has engaged in an inversion transaction pays the same corporate tax rate on all of its US sourced income as corporations that are operated as US corporations. The inversion transaction does not reduce the tax liability payable with respect to US sourced income. The opponents fail to memntion that fact. The tax savings are derived by not paying US corporate income tax on foreign sourced income. As a foreign corporation Burger King can use income earned offshore to reinvest in the US without incurring a US tax liability on the income that has already been taxed by a foreign country becasue it was earned in that foreign country.
If a Canadian company operates a business in the US, it will pay US coporate tax on its US sourced income at the same rate applicable to a US corporation. In fact if the Canadian company is ill advised and conducts that US business in a foreign subsidiary rather than a US subsidiary, the Canadian corporation will pay the US corporate tax rate on the US income plus a branch profits tax which is imposed to create the same double tax regime on foreign corporations doing business in the US imposed on US corporations and their shareholders.
Drew, please check your Ricochet InBox.
What virtually every American news outlet fails to mention is that Canada’s corporate tax rate was 21% as recently as 2008.
The 15% corporate tax rate is an aggressive move by Canada’s federal government specifically to encourage this kind of corporate merger.
In the past there was a “hollowing-out” of corporate Canada as firms were bought up by foreign companies and head offices moved to the US or Europe, costing the treasury lots of revenue.
Reducing the corporate tax rate is helping to get those corporate head offices back, and maybe even a few more than before.
Of course, the socialist NDP denounces the 15% corporate tax rate as “tax breaks for the rich”, even though it means more tax revenue for the federal treasury!
Something most Americans don’t realize is that American-based multinationals are holding untold billions in overseas banks rather than bring that money back where it will get re-taxed. What would it do for the economy if that money could be brought back without being taxed again?