Burger King Planning To Leave America

[mrjarrell]

For a better tax deal in Canada. WTF? Canada, a "socialist" bastion has a better business tax environment that the US. Sheesh. The money grubbing republicrats and dems have really managed to screw things up in this country. A 35% corporate tax rate is hardly what we could call business friendly and it's driving out businesses. Doesn't help when the current administration calls them "corporate deserters". Why should these businesses have any loyalty to America? All it's doing is bleeding them dry and sucking up their money. Maybe one of these days the .gov will realise what they've done, but I'm not going to hold my breath. The country is run by looters.

Burger King's Tax Inversion and Canada's Favorable Corporate Tax Rates - Forbes

 

[Baditude]

Wow this is eerie similar to what happens in Atlas shrugged, just check their thought process:
Treasury Secretary Jacob Lew called for a “new sense of economic patriotism,”

 

[pudly]

I've been reading about this for a few days now. Unfortunately, not a big surprise. The US has the highest corporate tax rates in the developed world. By performing a "tax inversion" (buy/merge with a foreign company and then declaring their home office as the new corporate headquarters), they will reduce their taxes by 1/3rd. When a state becomes sufficiently abusive, businesses will migrate out of that state. The United States is proving that the same thing can happen at the national level.

An interesting side note. Know who is advising Burger King on the tax inversion? Obama's old buddy Warren Buffet.

 

[JTScribe]

I'll have to go to Burger King more often if they end up doing it. Corporate taxes are idiotic, anyway. All it does is cause prices to increase.

 

[Classic]

Simple business decision.

 

[printcraft]

All new Canadian Bacon Whopper!

 

[ArcadiaGP]

It should be a red-flag with policy makers that more American companies want to become citizen companies of other nations.

 

[shibumiseeker]

I've been reading about this for a few days now. Unfortunately, not a big surprise. The US has the highest corporate tax rates in the developed world. By performing a "tax inversion" (buy/merge with a foreign company and then declaring their home office as the new corporate headquarters), they will reduce their taxes by 1/3rd. When a state becomes sufficiently abusive, businesses will migrate out of that state. The United States is proving that the same thing can happen at the national level.

An interesting side note. Know who is advising Burger King on the tax inversion? Obama's old buddy Warren Buffet.

Not to detract from your point, but as far as personal taxes go (all taxes on individuals of every sort), the US has some of the lowest in the developed nations. Income tax is in the low-middle but the other taxes such as VAT and sales are much lower which brings that number down. And the richer you are the smaller percentage you pay which is backwards from almost everywhere else:

How Low Are U.S. Taxes Compared to Other Countries? - The Atlantic

Further, though the corporate tax RATE is high in the US, the actual amount of taxes corporations pay tends to be a lot lower because there are far more exemptions and ways corporations can game the system. A better comparison would be how much similar business actually pay across the developed countries. IIRC from my econ class days, it's actually less than most for many businesses. Restaurants and retail establishments are in a tricky position because their physical presences are by necessity located within the US which gives them less advantage tax-wise than a business that can be more multi-national in its vertical integration.


*note: I have no dog in this discussion, it was just interesting to me to muse on how the media is spinning this story because it certainly isn't as simple as many make it out to be.

 

[Rookie]

-1 Burger King

 

[pudly]

It should be a red-flag with policy makers that more American companies want to become citizen companies of other nations.

Oh, they are very aware of it. There are dozens of companies that either have completed inversions or are in the process. Some well-known companies in this group are:

• Chiquitta
• CVS
• Medtronics

When you treat companies as the enemy: constantly denouncing "big business", over-taxing, increasing regulation and mandated expenses, extorting political contributions, etc., they can feel like they are not welcome and act accordingly. Companies such as Apple which do a lot of business outside of the US are reluctant to bring their profits back into the US to be taxed at the higher rates and have incentive to consider similar actions.

 

[RockofStrength]

Not to detract from your point, but as far as personal taxes go (all taxes on individuals of every sort), the US has some of the lowest in the developed nations. Income tax is in the low-middle but the other taxes such as VAT and sales are much lower which brings that number down. And the richer you are the smaller percentage you pay which is backwards from almost everywhere else:

How Low Are U.S. Taxes Compared to Other Countries? - The Atlantic

Further, though the corporate tax RATE is high in the US, the actual amount of taxes corporations pay tends to be a lot lower because there are far more exemptions and ways corporations can game the system. A better comparison would be how much similar business actually pay across the developed countries. IIRC from my econ class days, it's actually less than most for many businesses. Restaurants and retail establishments are in a tricky position because their physical presences are by necessity located within the US which gives them less advantage tax-wise than a business that can be more multi-national in its vertical integration.


*note: I have no dog in this discussion, it was just interesting to me to muse on how the media is spinning this story because it certainly isn't as simple as many make it out to be.

In that case, why would they leave for Canadia? It seems that the cost of moving, getting paperwork filled out etc would be silly if the U.S. were a better option. Now, it is possible Canadia is offering a sweetheart deal for a few years, but even that doesn't seem enough when you factor in the potential "anti-American business" backlash.

 

[pudly]

Not to detract from your point, but as far as personal taxes go (all taxes on individuals of every sort), the US has some of the lowest in the developed nations. Income tax is in the low-middle but the other taxes such as VAT and sales are much lower which brings that number down. And the richer you are the smaller percentage you pay which is backwards from almost everywhere else:

How Low Are U.S. Taxes Compared to Other Countries? - The Atlantic

Further, though the corporate tax RATE is high in the US, the actual amount of taxes corporations pay tends to be a lot lower because there are far more exemptions and ways corporations can game the system. A better comparison would be how much similar business actually pay across the developed countries. IIRC from my econ class days, it's actually less than most for many businesses. Restaurants and retail establishments are in a tricky position because their physical presences are by necessity located within the US which gives them less advantage tax-wise than a business that can be more multi-national in its vertical integration.


*note: I have no dog in this discussion, it was just interesting to me to muse on how the media is spinning this story because it certainly isn't as simple as many make it out to be.

I believe you are conflating business taxes with personal taxes. Remember that corporate profits are taxed twice- both at the corporate level and at the individual level. The Atlantic article is about individual taxes. I understand your point about the listed tax rates not being the true rates, but I'm sure these businesses have run the numbers to determine if there is a substantial gain in moving. Also, as my previous post notes, these moves are not strictly about taxes. Oppressive governments are a factor as well.

 

[seedubs1]

Can't blame them. Taxes in the US are ridiculous.

Right now, I'm working 4 months of the year essentially just to pay taxes. Kind of insane when you think about it. And I don't feel like my hard earned money is going towards anything I'd want it to go to, and I don't feel like my politicians are working for me at all. Essentially, taxation without representation.

 

[JeremiahJohnson]

It's pretty simple to figure out who's telling the truth here and what stats are the real ones. Corporations are in business to make money. If moving saves them money, they'll move.

 

[pudly]

Both tax articles are legitimate. They are just addressing different areas.

 

[JRPLANE]

I do agree with the savings that move can provide. BUT the price of there food will not go down one bit!!!!!!!!!

 

[PistolBob]

Can't blame them. Taxes in the US are ridiculous.

Right now, I'm working 4 months of the year essentially just to pay taxes. Kind of insane when you think about it. And I don't feel like my hard earned money is going towards anything I'd want it to go to, and I don't feel like my politicians are working for me at all. Essentially, taxation without representation.

If you think it's bad now wait until next year when more ACA taxes hit the books.

 

[shibumiseeker]

I believe you are conflating business taxes with personal taxes.

No, I was simply pointing out that the issue of taxation overall isn't as simple as many make it out to be. If one makes the argument on one hand it's a bad thing that corporate taxation is so high compared to other countries then it's logical that one should be happy with the fact that personal taxation is lower compared to other developed countries. If one just makes the argument that taxation is too high period then it wouldn't get any disagreement from me. Taxation, both business and personal, is so complex that some of the smartest people in the world studying it can't always agree on it, let alone reporters in the media or us commentators on InGO. The extent of my knowledge of such things are a few undergrad econ and accounting classes, an ex father-in-law who is an econ professor, and 12 years running a small business, which was incorporated some of that time. I don't even begin to pretend to understand the complexities involved. Which is why I also don't pretend that the issue at hand supports or detracts from any political agenda I may have (which I don't have in this case).

I DO think that a significant number of the inversions we have seen in the last decade have a lot to do with corporate regulations, but again, I have no evidence of this because those things too are far beyond my ken as the businesses involved have armies of very well educated lawyers to figure those sort of things out for them.

 

[MisterChester]

The tax burden is completely messed up in this country. Businesses that should be getting lower taxes are getting taxed to hell while there are other companies that pay effectively 0 taxes.

 

[MisterChester]

I'll have to go to Burger King more often if they end up doing it. Corporate taxes are idiotic, anyway. All it does is cause prices to increase.

Yeah, let's do that. I want to pay more taxes from my income to make up the difference!