Growing up in Atlanta there was a Burger King right around the corner from our home on Kennesaw Ave NE on North Ave. I remember plenty of times being sent over to get a whopper for Dad. One of the streats I allowed myself on Fridays when I was stationed on Kandahar AB was a double whopper with cheese at the Burger King — it was a humble reminder of home. And so the recent news about my favorite fast food place considering moving its headquarters to Canada came as a shock — but not as a surprise.
As reported by Forbes, “Burger King is in talks to buy Canadian coffee-and-doughnut chain Tim Horton’s Inc., a merger that would be structured as a “tax inversion” which would effectively move Burger King’s headquarters to Canada. Tim Horton’s, the brand, is tantamount to Canada’s version of Dunkin Donuts and is no small coffee-shop chain. As Canada’s largest coffee-shop chain, it has a market capitalization of about $8.4 billion, while Burger King’s market capitalization is about $9.6 billion; the proposed merger would form a new entity worth about $18 billion.”
Now when you read the leftist media take on this story, you’ll find horrific condemnation of Burger King – but guess what? Obama’s buddy Warren Buffett has a hand in the whole venture. The progressive socialists and the Obama administration are attacking Burger King as being “unpatriotic” and “corporate deserters” — but that’s what socialists do, even as they’re benefiting behind the scenes.
We wrote here about “tax inversion” which enables private sector businesses to survive the onerous tax environment of the Obama administration. Instead of blaming Burger King, the blame is totally on President Obama.
The corporate business tax rate in America tops out at 39.6 percent (federal plus state) — and don’t give me the line about exemptions since Obama’s other buddy Jeff Immelt and GE paid no corporate taxes. Obama wants to close exemptions and loopholes but keep the tax rate high — dumb idea — and businesses aren’t going to sit back and allow themselves to get gouged by the “fair share” doctrine of Obama.
I agree with closing and eliminating all corporate loopholes and exemptions, but with that I recommend flattening the tax rate to 22-25 percent. My goal would be to create conditions for private sector economic growth and unleash the trillions of dollars of investment sitting outside of America. Progressive socialists maintain a premise of “you didn’t build that” and believe the earnings of these private sector companies are theirs to confiscate and squander on their welfare nanny-state schemes — or worse, promote insidious crony capitalist ventures, such as Solyndra, using hard-earned taxpayer dollars.
Here is the truth, as Forbes reports, “an American company that merges with a Canadian target company for share consideration can avoid U.S. residency for tax purposes as long as the shareholders of the Canadian target end up owning at least 20 percent of the shares of the new parent immediately after the acquisition. Canada’s corporate tax rate in Ontario of 26.5 percent (the federal rate of 15 percent plus Ontario’s provincial corporate tax rate of 11.5 percent) is considerably favorable to the American federal corporate tax rate of 35 percent thanks in large part to the conservative Canadian government led by Stephen Harper. The Harper government lowered the federal tax rate to 15 percent in 2012 down originally from 28 percent since it took office in 2006.”
In fact, Forbes says a recent KPMG Report, “Focus on Tax” ranked Canada number one with the most business-friendly tax structure.
Ok, get that — the conservative Canadian government lowered their corporate tax rate and that spurs economic growth — which benefits shareholders and most importantly, workers. What part of this do progressive socialists not understand? Oh, I forgot, they don’t want to understand because it’s not in conjunction with their ideology.
So stop blaming Burger King, and place the blame where it belongs: at the feet of President Barack Hussein Obama and his socialist acolytes. Tax inversions are not illegal, but have been forced on American private sector businesses in order to survive. The intransigence of Obama and his disciples will result in a loss of tax revenues for America — a big benefit for Canada.
Just imagine if Obama lowered the top-level corporate tax rate below Canada’s? What would happen if we became the place where corporations all over the world wanted to come and establish their headquarters? That should be the goal — a government that sets the conditions for investment, ingenuity and innovation — not the objective of the Obama crew.
Forbes says, “rather than taking the same stance on outright cutting the corporate tax rate, as the Harper government did, to keep the U.S. a competitive place to do business, President Obama calls tax inverting companies like Burger King“corporate deserters who renounce their citizenship to shield profits”. At the urging of President Obama, Congress is considering a bill to make it harder for companies to change addresses abroad. Treasury Secretary Jacob Lew called for a “new sense of economic patriotism,” asking Congress to pass curbs to inversions. The Treasury Department currently is also preparing options to deter or prevent corporate tax inversions potentially on its own. “
You see, Obama views taxation as a means of punishment, and that drives his little socialist engine.
So, I support Burger King and will continue to have it my way.