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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
Imagine the inflation as all that currency reentered circulation!
;-)
Leftist memories are non-existent!
I would contend they aren’t plagued so much non-existent memories, but rather they can’t be bought off for long. A single wrong is enough to condemn an entity – individual or corporate – and past virtues will be ignored.
This doesn’t apply to the Faithful Progressives. Their faults are much more easily set aside.
Plus, nothing changes for all the franchisees operating in US locales. They’ll still pay the taxes that any small business operating in that locale pays — payroll taxes, sales taxes on consumable supplies, and income taxes on whatever profit the location generates. The HQ move only affects corporate tax at the HQ level, not the thousands of franchisees.
Thank you for taking the time to enlighten me- you too, Fritz. I’m thrilled to have misunderstood this, but I still take it as yet another example of political incompetence on the part of people who should be making a strong case for lower corporate taxes, plus other reforms.
For the Left, taxes, and corporate taxes in particular are not for funding the government. They are for “leveling the playing field”, or punishing those who they see as enemies, or less worthy than the “working man”. If the most important purpose of taxes were funding the government, they would do everything possible to endourage economic growth, which is the best way to increase revenue from taxes. Their “economists” are not stupid, they know this. Witness the IRS scandal. Witness the “Buffett Rule”.
The media coverage of this issue makes it very easy to misunderstand. All stories focus primarily on the corporate tax rate which is only indirectly a factor driving the inversion transactions. The real problem is the double taxation of foreign sourced income imposed by the US system. The US tax Code subjects worldwide income to US income taxation with a complicated system of deferral and foreign tax credits. Yes the corporate tax rate should be reduced. The prinicipal reason for such a reduction is to encourage the investment of both foreign and domestic captial into businesses operating in the US. The reform needed to address inversions is a change to the way the tax code deals with income earned offshore. The tax reform proposals exist and there is bi-partisan support for the necessary changes. However, the current political climate uses problems to gain electoral advantage. Instead of solving problems through the legislative process, the parties would rather preserve the issue to use against political opponents. It my sense that this approach is used more by the Dems than by the GOP. However, there are probably examples on both sides.
Quip of the day:
http://www.nationalreview.com/article/386466/kings-critics-lose-their-heads-charles-c-w-cooke
Also, the fact that the new Burger King HQ will be in Ontario really blows my mind. Alberta or Saskatchewan I could understand, but Ontario?
Ontario’s public finances are way, way worse than California’s!!!
If Ontario, of all places, is a more inviting tax jurisdiction than Florida, y’all have really got some problems south of the 49th parallel.
Great point.