Wow, I really hate Burger King, but this latest move leaves me very confused. Maybe I have to eat there now?
The Chicago Tribune reports on it.
Canada has become the latest frontier for U.S. companies fleeing the high cost of business, spurred by low corporate taxes and a policy that keeps international earnings out of the clutches of the Internal Revenue Service.
Burger King, the second-largest U.S. burger chain, agreed to acquire Oakville, Ontario-based Tim Hortons on Tuesday for about C$12.5 billion ($11.4 billion) in a deal that creates the world’s third-largest fast-food chain and moves its headquarters in Canada. It’s “not fair” that companies can renounce their U.S. citizenship by filling out paperwork, a White House spokesman said Monday.
The deal for Oakville, Ontario-based Tim Hortons follows Valeant Pharmaceuticals’ merger with Canada’s Biovail in 2010, which sparked the latest so- called tax-inversion wave.
Burger King is unlikely to be the last U.S. company to consider moving north even as President Barack Obama and his aides try to curb the practice, tax experts say. In addition to avoiding U.S. taxes on global earnings, companies like Burger King can take advantage of Canadian tax rates that have been cut by about a quarter in the past eight years.
“We have now made it a lot more attractive for companies to say Canada is a good place to set up shop,” said Jack Mintz, director of the University of Calgary’s School of Public Policy.
[…]Lower corporate taxes may also be an attraction for foreign companies. Canada began cutting its federal corporate tax rate in 2001 under the previous Liberal government. Prime Minister Stephen Harper then took up the baton, dropping the rate in several steps to 15 percent in 2012. Combined with provincial rates averaging 11.5 percent, Canada’s rate of 27 percent is now the second-lowest in the Group of Seven countries behind the U.K.’s 21 percent, according to auditing and tax firm KPMG.
Canada’s combined rate is still above the 24 percent average for the Organisation for Economic Co-operation and Development, according to the report.
Low corporate tax rates helped the country rise to second place in a Bloomberg ranking of best countries for doing business in January, behind only Hong Kong.
“We are proud that our low tax environment in Canada attracts businesses,” Carl Vallee, a spokesman for Harper, said by email on Monday.
The U.S. corporate tax rate is the highest in the world. It warms my heart to think that corporations are moving out to Canada. And I hope they take the jobs with them, because that’s the only way people will learn to elect presidents who understand economics. Our leader is out of his depth trying to run this country, and is only able to his economic failures by borrowing trillions and trillions of dollars from our children. Anybody can appear competent if they borrow and spend that much money, but it’s a bubble, just like the housing bubble his party caused. Canada’s prime minister has a BA and MA in economics – he actually knows how economies work. We could have picked someone qualified, but we didn’t.
I fully expect Obama to whine like a little girl about this, and call Burger King “unpatriotic”. This is loser talk, because he is a loser. The limit of his knowledge of economics is that he makes snarky speeches insulting people who disagree with him. Why did we elect this stand-up comedian? Is that what a President is supposed to do?