Burger King Flees US Taxes by Moving to Canada

home_of_the_whopper

Under Obama, the United States is turning into California and plenty of American companies are doing what California companies have been doing.

They’re headed for the exit.

Burger King may be the home of the Whopper, but Canada may be the new home of Burger King.

If completed, the deal would mean Burger King’s corporate headquarters would move to Canada, raising the specter of yet another American company switching its national citizenship to lower its tax bill.

Inversions have become increasingly popular, though the practice has come under fire from Washington as the Obama administration and lawmakers have complained that companies that do so are unfairly — though legally — cutting their tax bills. The practice gained new prominence when Pfizer, one of the biggest names in corporate America, pursued a takeover of AstraZeneca in an effort to find a lower tax rate in Britain.

The American corporate tax rate is about 35 percent, while Canada’s is about 15 percent. But people briefed on the deal negotiations said that the main driver in the talks was not taxes. Burger King already pays a tax rate of roughly 27 percent, and would shave off only a couple of percentage points by moving to Canada, according to the people briefed on the matter.

Even in taxes were the issue (and a few percentage points for an $18 billion company still amounts to a sizable sum. A very sizable sum.) Burger King won’t announce it out loud. Why irritate American consumers or Washington.

No company likes to look greedy, but the idea that such a move will have nothing to do with the tax advantages is simply denial.

One potential reason for the move may be to placate Canadian authorities. Deals in the country are governed by the Investment Canada Act, which allows the national government to block a merger if it is deemed to not be in the best interests of the country.

This is why I’m a protectionist. Every other country is. It’s not like there’s some imaginary open environment out there. China and Japan cleaned out clock largely thanks to protectionism. But protectionism doesn’t work if you don’t have an attractive business environment.

The White House called on Congress to take steps to prevent companies from pursuing inversions. The Treasury Department recently said it is assembling a list of options to deter or prevent the deals for Secretary Jacob Lew to consider.

They can do that in the hopes of making the current economic disaster look a little better, but building an iron curtain around America isn’t the answer to anything. There will always be ways around it and it creates disincentives for new businesses.

Instead of competing for their business, we’ll be warning the companies that we still have left not to leave. That’s exactly the kind of scenario likely to move companies faster out the door.

  • Hank Rearden

    Does the term “Berlin Wall” ring a bell?

    • http://sultanknish.blogspot.com Daniel Greenfield

      A siren actually

  • http://www.lie2us.com Lie2us.com

    To all you moronic liberals, you don’t want businesses to go abroad, stop the insane taxation, period! Even you morons seek out who is selling what you want at the lowest price, and you idiots expect business to differ? If Liberals were half as smart as they think they are, they too could see the obvious.

    The liberal trash are destroying our country and haven’t the brains to even realize it. This is just the tip of the iceberg, like those who scurried out of Detroit and those fleeing California, businesses are and will continue to go where the commie, tax grabbing liberals are not. Obama is a two-bit Marxist dictator and all you idiots are obedient little goose-stepping morons who follow him.

    • Leora Xu

      Agree. I hope Obama is watching. The last thing we need is a mass-exodus of businesses to Canada (and other countries)

      In an administration obstinately opposed to real growth policies, and an education system that generates workers that can barely read, the best anyone can hope for is part-time and minimum-wage jobs…. No wonder minimum wage increases are being pushed.

      Taking all of these forces together, you get Obama’s dream: a drop in the standard of living of the affluent accompanied, by redistribution of wealth to the Democrat-voting minimum wage employee.

      Just take myself for example – I was laid off in 2010 shortly after the start of the recession. I’m highly skilled in my field (chemical engineer), yet have been bouncing around from job to job all making starting salary numbers, despite being 40 years old.

      Paying my mortgage is a struggle. Paying my health insurance is worse ($375/month from Freelancer’s Union). I am forced to buy cheap bare minimum car insurance ($18/month from Insurance Panda). My daughter is forced to attend a public school that is in increasingly worse condition. Yet here I am, unable to afford a quality education for her. I can only assume it is MUCH MUCH WORSE for other people.

      Now if Obama manages to avoid any significant voter-identification legislation and manages to reduce/eliminate deportations while keeping open the border, all of his dreams come true!

      • Pete

        Chem Es make ~60k starting?

        Given what you put into your education and given your experience that really is not a fair shake. And depending on the metro area you live in, it isn’t much especially after the time & money spent in and on college (opportunity cost).

        Plus benefits accrue with time by staying at a good employer which does not happen bouncing around.

        Renumeration should be commensurate with responsibility and the difficulty of getting accreditation (learning the field and/or passing the professional tests)

        Of course Obama could pass his courses by reciting his late night BS sessions he had with his classmates to his commie profs. There is a reason we have not seen his college GPA or course work. We really would be better off with a drill sergeant picked at random.

        • http://www.lie2us.com Lie2us.com

          or any homeless drunk on any street corner…..as long as he’s an American at heart….

      • http://www.lie2us.com Lie2us.com

        Well said Leora – best of luck in finding employment equal to your skills!

      • truebearing

        A good friend of mine is a chemical engineer. I remember the many job offers he got when he graduated from the UW-Madison. Back then it was a very highly rated chemical engineering school, but his grades were pretty average. Nevertheless, he had a lot of opportunities. To hear that chem engineers aren’t in demand is a pretty serious indicator of how bad Obama has ruined this economy.

        Good luck.

      • MLCBLOG

        O watching?! Don’t you get it? He and his cohorts engineer this by raising taxes and hampering business operations. What their agenda is is anybody’s guess.

    • Pete

      “Even you morons seek out who is selling what you want at the lowest price, but you expect business to differ?”

      I think many archon Leftists know this. They merely spout to deceive the OWS types. They really want one rule for us and another for themselves.

      The Left dresses up their divine right and noblesse oblige in a new language.

  • truebearing

    Canada is doing much better than we are, but if you talk with Canadians, especially from the western half of the country, they’ll tell you the country is split in half and a new regime could destroy their prosperity in no time.

    • Squiggles

      It is all because of Ontario. They refuse to get their fiscal house in order. They are bleeding money left and right. Too bad they elected the Liberals. Again. They wrecked the economy and we lost a lot in the manufacturing sector.

  • Pete

    Socialist Senator Bernie Sanders says Burger King is unpatriotic.

    Idi0t Sanders is no different than the French Kings except in one regard. He does not have as much power yet.

    You think drug smuggling is bad? Consider salt smuggling.

    en.wikipedia.org/wiki/Gabelle
    en.wikipedia.org/wiki/History_of_the_British_salt_tax_in_India

    They hung people for taxes back in the day and Bernie Sanders may be the type that want to turn the clock back.

    New song and dance same jig.

    • MLCBLOG

      Bernie and his buddies wanted BK while they were paying taxes but then the proceed to make the business climate so unfriendly that businesses want to leave and now they call them unpatriotic. Liberalism truly is a mental disorder.

  • MLCBLOG

    What’s all this about Ontario? Highly liberal, high taxes as opposed to the rest of Canada?