Free Markets, Free People

Politicians feel businesses work for government and their only function is a source of tax revenue

I’m not sure how else you interpret this “inversion” nonsense.

Burger King Worldwide Inc. is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc., a deal that would be structured as a so-called tax inversion and move the hamburger seller’s base to Canada.

The two sides are working on a deal that would create a new company, they said in a statement, confirming a report on the talks by The Wall Street Journal. The takeover would create the third-largest quick-service restaurant provider in the world, they said.

The point of this sort of a merger, beside the business aspect, is to move the headquarters of Burger King to a lower tax nation:

Inversion deals have been on the rise lately, and are facing stiff opposition in Washington given that they threaten to deplete U.S. government coffers. A move by Burger King to seal one is sure to intensify criticism of them, since it is such a well-known and distinctly American brand.
[…]

By moving to a lower-tax jurisdiction, inversion deals enable companies to save money on foreign earnings and cash stowed abroad, and in some cases lower their overall corporate rate. Even though many of the headline-grabbing inversion deals of late have involved European companies, Canada has also been the focal point for a number of them, given its proximity and similarity to the U.S. Canada’s federal corporate tax rate was lowered to 15% in 2012.

And surprise – Canada’s economy is picking up steam and corporations are eyeing it as a place to locate.  Imagine that.

Canada’s corporate tax rate in Ontario of 26.5% (the federal rate of 15% plus Ontario’s provincial corporate tax rate of 11.5%) is considerably favorable to the American corporate tax rate of 35% thanks in large part to the conservative Canadian government led by Stephen Harper. The Harper government lowered the federal tax rate to 15% in 2012 down originally from 28% since it took office in 2006.

In fact, a recent KPMG Report, Focus on Tax, ranked Canada as the #1 country with the most business-friendly tax structure among developed countries when adding up a wide range of tax costs to businesses from statutory labor costs to harmonized sales tax. When comparing developed countries to what companies pay in the U.S.; Canada came in at 53.6%, the U.K. came in at 66.6%, and the Netherlands at 74.5% of the U.S. corporate tax burden.

Meanwhile, our politicians are trying to find a way to prevent that, because, well because they apparently think corporations work for them and exist to pay whatever tax rate they deem necessary.  Of course, in a free country, this wouldn’t even be an issue.  Corporations, like people, have the right to move wherever they wish.  It is their call, not the government’s.

But, here that’s not the case:

Burger King’s possible merger to obtain the favorable Canadian corporate tax rate is a true reflection of the American corporate tax rate being the highest in the OECD. However, 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.

“Corporate deserters”.  “Economic patriotism”.  It’s Orwellian Newspeak at its finest.  Imagine anyone trying to “shield profits” from a grasping and out-of-control government. It is also another, in a long line of indicators, that this is no longer a free country in the sense we used to believe it was.  It is now a country where every other entity is subservient to the needs or wants of intrusive, controlling government.

~McQ

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26 Responses to Politicians feel businesses work for government and their only function is a source of tax revenue

  • “corporate deserters who renounce their citizenship to shield profits.”
    .
    But wait, according to their reaction to Citizen’s United, progressives rage that Corporations aren’t ‘citizens’.
    .
    I’m so confused.

    • It is confusing because there’s no principle behind it.  According to Progressives, the USA should emulate the rest of the world with respect to universal health care and capital punishment, but not the taxation of profits made on foreign soil.  No, then “patriotism” is invoked like a weapon.

  • The corporate rate is only a very ‘visible’ tax American businesses are burdened with. Many…maybe most…of the remainder are never seen or appreciated by consumer, though we all pay them in the cost of goods and services we buy.
    .
    This could go very far to explain why sparsely populated Canadian provinces have outpaced the entire U.S. during the Obamic Decline in terms of job growth.

  • IF the Feds manage to close the gate on American businesses seeking LESS HOSTILE tax environments, guess what happens next…???
    .
    One, new businesses will NOT organize under the laws of the U.S.
    .
    Two, some of the existing businesses will just feather their domestic operations and transfer their business off-shore anyhow.

  • IIRC the Communists built a wall in Berlin to keep productive members of society from fleeing. Echo?

    • Now that traffic jam at the border would be interesting to watch. Unless we have one-way borders. Go north, young man, go north.

  • Reminds me of the {questionable} joke: “Dang — If you’d just agree to let me **** you, then I wouldn’t have to rape you. Why force me to do that?”

  • Next, I expect to heard that the federal government will be building a wall/fence around Texas.

  • So…just who is the parasite and who is the producer?

  • Remember, corporate greed is awful but governmental, union and politican greed is just SWELL. And the greed of the free sh*t coalition is even better!

  • Statist politicians are nothing more than Ramoras, but at least Ramora can swim on their own (quite well, in fact).

  • Well, government and the taxpayers built the infrastructure!
    like,
    the power grid, and the phone system and the rail lines and the canals….
    .
    no? Private enterprise? Really?

  • “CBS Report: People In Ferguson Will Loot And Destroy Businesses Until Businesses Give Them Jobs:”
    .
    And…like their Collectivist leaders…they’re doing it wrong…
    .
    BIG GOVERNMENT cannot “create jobs” except as part of a temporary delusion.

    • Or…
      they will loot and destroy businesses until there are no more left to loot and destroy – that’s how it usually works, but the physical evidence of destroyed buildings and empty weed grown lots where businesses used to be apparently doesn’t register on them.
      .
      To hell with working, just destroy or loot the businesses until they pay off. Come by once or twice a month for the protection money like the mob would.
      .
      racketeering anyone? I’m SURE the Holder Justice department would be interested in sending people to Ferguson to check up on that, they probably already know all the good eating places and half decent hotels.

      • Ferguson under Federal scrutiny + a few years = Detroit

        • I wonder if they’ll take time out of their busy looting and destroying days to vote in their local elections.
          or if it will still be too hard for them to stir themselves to go down and vote on a day that doesn’t allow them to vote for Hillary or Fauxcahontas at the same time they’re voting for mayor, city council or school board.

    • OMG – priceless.

      “And of course the reporter ends with saying they don’t want a handout but a hand-up. Because that’s what he wants to believe.”

      Read more: http://therightscoop.com/special-cbs-report-ferguson-residents-will-loot-and-destroy-businesses-until-businesses-give-them-jobs/#ixzz3BWaVcQlH

      • “Looting and rioting will continue until community investment improves”.
        .
        I just know there’s something wrong there…

        • “Looting and rioting will continue until community investment improves”.

          Perfect.

        • Wait! I’ve got it! The hitherto unknown phase 2 of the gnome plan!
          .
          1) collect underpants.
          2) looting and rioting to increase investment.
          3) profit!
          .
          Phase 1 could pretty much say anything couldn’t it.
          .
          And therein lies the beauty of this model!