The White House might need a new poster child for its “tax fairness” campaign.
Famed billionaire investor Warren Buffett, who President Barack Obama has lauded and named a signature proposal after, is helping finance a deal that would allow Burger King Worldwide Inc. to reincorporate in Canada and potentially reduce its U.S. tax bill through a so-called inversion, the Journal reported late Monday.
The rabid marxists and paid Liberal shills that post at the CBC are frothing at the mouth right now. This merger and subsequent move to Canada contradicts their anti-harper narrative and demonstrates that under the economic stewardship of the Conservatives, Canada is outperforming its G7 partners. That is a message they need to squash in order to get their “man child” elected.
Instead of discouraging companies from finding ways around the U.S.’s idiotic corporate tax laws, why don’t they fix the tax laws?
When you add federal and provincial tax, there’s very little tax reduction with this. Most of the financial analysts agree there are all kinds of other reasons for this merger and move. Biggest ones are BK needing to get a higher quality of product beyond just burgers, and a much higher level of franchising with TH meaning much smoother and more predictable cash flow.
Northernont, it’s actually worse than that. If you watched The Exchange last night the ineffable Diane was trying out the “loss of a great Canadian icon” meme. Oh man, she’s a pinhead. What it means is BK taking TH international on the strength of its brand name, something that TH has been trying and failing to do for more than 10 years.
Instead of losing Timmies, Canada is gaining Burger King.
McDonalds still has better coffee!
Buffett might be one of Obamas idols but when it comes to the bottom line a good business deal trumps loyalty for Warren but then socialist Barry wouldn’t understand that concept. Also Buffett clearly understands where the business climate in the US is going and realizes that investments out of the US is a better idea.
From what I understand, the tax issue facing Burger King is that in the USA, they’re taxed on their global revenue, whereas in Canada, they will be taxed on their Canadian revenue. That’s a huge savings for them.
If that’s true, then expect a sudden, brief flood on large US corporations to Canada … before Congress closes the door to their cash cows leaving for greener pastures.
Go Canada!
True enough, Fred. But like all the rest, they’re not repatriating much of their global revenue. But the shareholders love this; time for a big dividend payout. But the principal reason for this is the one I gave. In 15 years, the number of fast food outlets in the US has gone from 9000 to 21,000. Like McDonalds and all the rest, their revenue is shrinking, and all the growth is outside North America. And to compete world wide they need an upscale brand.
Naturally! The corporate tax rate in the US is 35%, while the rate in Germany and Canada is 15%…
The three D’s of tax planning apply to individuals as well as corporations:
Deduct, Defer, Divide
Burger King made a rational analysis of it’s business venture and Tim Horton’s was deemed a worthy fit. Welcome to Canada, Warren Buffet; but we don’t need any more ‘progressive politics’ as we are relatively swimming in the stuff already. Perhaps Warren can donate to a conservative cause for once…
I don’t believe that Krispy Kreme will supplant Tim Horton’s anytime soon; so all our police forces can relax that their donut shop will still be around for a considerable time.
Cheers
Hans Rupprecht, Commander in Chief
1st Saint Nicolaas Army
Army Group “True North”
They don’t think the laws are broken. They just need to keep their victims from leaving.
Like in the good old USSR days.
To be fair to the new company – yes, it’s true that there are tax implications, but it’s also true that the largest source of revenue for the new company is Canada, not the U.S. (BK just doesn’t own that much of the US market.)
My concern – what are they gonna do about the Tim’s and BK that are right next to each other in Smith’s Falls?
US companies have been doing this for years already.
It just took the brand names of TH and BK that are familiar to the media twits to stimulate those moribund brain cells enough to provoke a response.
Business analysts who have followed the reincorporation trend say the activity is largely done and is on the tail of the the Bell Curve trend line.
Buffet is financing BK because he is going to make money from the share price boost and dividend bump that the merger and reincorporation will cause.
My only concern is that BK will somehow screw up the Tim Horton brand.
When your loyalty is to money your loyalty is for sale. I wonder if Oclueless will ever learn.
This is the same Warren Buffet who, once he got Obama’s assurance that he would never approve Keystone, went out and bought Burlington Northern Railway so he could move all that Bakken crude. Nice payback, Warren!
You forgot to add in the provincial corporate tax rate, Hans. There’s not actually all that much net difference between much of Canada and the US.
A Canadian company does not pay Canadian income tax for its profits in the USA, but a US company has to pay US income tax for its profits in Canada. Burger King will be able to keep 35% of it profits in the USA and 29.75% of its profits in Canada. Currently Burger King is paying 44.75% income tax on its Canadian operations, 15% to the Canadian treasury and 29.75% (they can write off the Canadian corporate tax as a cost, 35% of 85% is 29.75%) to the US treasury.
http://www.forbes.com/sites/theapothecary/2014/08/25/no-inversion-is-not-unpatriotic-yes-we-need-corporate-tax-reform/
Since all taxes are passed onto the consumer, all consumers outside the US are paying taxes to the US government everytime they buy a product from a US based company. Since only US citizens can vote in US elections all those foreign customers are being taxed without representation. Taxation without representation is tyranny. Therefore the US government is tyrannical. QED
Oops, that should read. “Burger King will be able to keep 35% MORE of it profits in the USA and 29.75% MORE of its profits in Canada.”
Expect a lot of this unless Trudeau get elected than we will tank faster than the US in one week than six years.
Recall when a US firm bought Hudson Bay Company few years back? In this past year they put themselves back on our TSX.
A sure sign the empire’s propaganda machine thinks you are an idiot – when insider oligarchs are touted as sterling examples of paying their “fair share” – Next we can expect to see Soros as the poster boy for market transparency reforms – Bizzaro world lives.
I’m quite happy to see Burger Thing move and become a Canadian company.
I’d be a lot more happy to see Caterpillar and John Deere do the same. And bring those factories with them. That won’t happen of course, because our regulations and labor laws in Ontario and the ROC are shall we say prohibitive.
Taxes are a lot, but they’re not everything.
If Caterpillar moves to Canada it may have to rename itself Chenille in la belle province; language laws you know.
“I’m quite happy to see Burger Thing move and become a Canadian company.”
I completely agree. As a Canadian, Canada must come first.
Good for BK.
This is just the beginning of such moves, unless the Republicans win AND confront Obama on every issue after the election.