Whose yo daddy, Cannuck?
Posted on 08/26/2014 8:16:31 AM PDT by Squawk 8888
Speaking as someone who has eaten there, Burger King is one of the saddest places on earth. Abandon digestion and pimple-free skin, all ye who enter there. To me, Burger King isn't just a lousy place to eat but a sort of existential black site that drains the life out of you (well, me) on every level: All the products are just lousier versions than what's offered at better fast-food joints. The ads, even those old fake-hip ones with the weird Burger King, are awful to the nth degree (anyone else remember the "Where's Herb?" campaign?).
Yet I find the attacks on Burger King's purchase of Tim Horton's "Cafe & Bake Shop" even more saddening. By picking up the Canadian-owned maker of the terribly-named "Timbits" (donut holes named after the Canadian hockey player and drunk-driving cautionary tale who co-founded the chain), Burger King can escape U.S. corporate taxes that are much higher than those in most other countries. This is the so-called tax inversion process, by which a U.S. company picks up a foreign one and then moves its corporate headquarters there to take advantage of lower taxes. "Voila, higher profits!" clucks The Daily Beast's Daniel Gross. The Department of Treasury estimates that over the next decade such inversions could mean a loss of $20 billion in corporate taxes. To put even that self-evidently puny amount in even clearer context, the Congressional Budget Office (CBO) figures the corporate income taxe will raise $4.5 trillion over the same period. "In other words," notes Kyle Pomereau of the Tax Foundation, "corporate inversions are predicted to cost 0.5 percent of the corporate tax base over ten years."
The White House and a number of Democrats are trying to stymie tax inversions through legislation and the bully pulpit. Just earlier this month, President Obama floated the idea of an administrative action that could spike such deals and he's blasted tax inversions as "unpatriotic."
But this is all b.s. until the U.S. gets its corporate tax rate into line with what other countries are charging. According to KPMG, which has a comprehensive chart of corporate tax rates (including average state and regional rates), the U.S. total comes to 40 percent. Canada's comes to just 26.5 percent:
"The corporate income tax rate is 26.5%. It comprises a 15.0% federal tax component and an 11.5% provincial tax component. Depending on the province, the combined general corporate income tax rate ranges from 25% to 31%. Lower corporate income tax rates are available to Canadian-controlled private corporations (CCPCs) on their first CAD$500,000 (CAN$350,000 to CAD$425,000 for certain provinces) of taxable active business income. A 2014 representative tax rate for a CCPC on its first CAD$500,000 of active business income is 15.5% (an 11% federal tax component and a 4.5% provincial tax component). Depending on the province, the 2014 combined active business income tax rate ranges from 11% to 19%."
Read more, including a breakdown of the U.S. figure, here. There's no shame or infamy in moving to where conditions are better, whether for your family, your job, or your business. Such freedom of mobility is, in fact, typically celebrated as one of the things that makes America exceptional. And it goes without saying that since tax inversions are perfectly legal, there's not even a hint of impropriety here.
As Gross points out in The Daily Beast, Burger King won't save its corporate skin simply by shuffling off to Canada. It's a poorly run company and it's really kind of a miracle it's lasted as long as it has (did I mention how sad-inducing BK is?). But for god's sake, are Democrats and other economic nativists really so dumb as to think they can gain ground in a global economy by making it harder for all businesses to do business in America (whether through higher taxes or ownership rules or other regulations)? That way madness lies—and continued economic lassitude.
It didn’t do that well in San Francisco is probably why. Despite all the liberal hoopla homosexuals are a very small segment of the populace. They are however very rich and very loud.....and vengeful!!
The article starts out with a scathing criticism of Burger King, however my experience has been that their food tastes good, appears reasonably wholesome for fast food, and is reasonably priced.
Yeah, it’s amazing what the absence of family to support can do for one’s disposable income.
They also hint that BK is in financial trouble but I don’t see it....there are far more Burberkings in our area than any other fastfood franchises!!
I can attest to that!!
That JFK quote makes him sound like Reagan. Compared to BO, JFK is as conservative as Ted Cruz
I noticed here in Germany, that BK has burned a number of bridges and making itself a minor-league franchise operation. For the last two or three years...massive coupon campaign to get more people to visit...but this came with a cost. The individual franchise owner is forced to sell at a cheaper price, and buy the products for the meals at the regular cost. So most all franchise owners are watching a twenty-to-thirty percent cut on profits what they used to prior to 2010. This also starts to drag employee cost into close review and dumping anyone who starts to argue about schedules and over-time pay.
Presently, buying into a German Burger King operation is not a big money-maker....like it was twenty years ago.
THERE ARE NO CORPORATE TAXES!
We pay all taxes, the end user. Taxes are factored into the cost of business and passed along. Corporations are merely tax collectors.
Milton Friedman:
https://www.youtube.com/watch?v=YmqoCHR14n8
Here in Canada they’ve been in decline for the past decade or so, but the remaining franchises are quite well-run. One of the most successful ones here is on the boundary between Chinatown and the University campus; if they can compete with really good, cheap Chinese food for the perpetually-broke student trade they must be doing something right.
Higher profits as a result of lower taxes are beneficial to a free modern advanced division of labor society.There is more savings, more investment, more productive expenditure, more demand for capital goods and more demand for labor.
Higher profits are the means and motive for capital accumulation, which leads to more prosperity. And higher demand for labor leads to more employment and higher average money wage rates, which means a higher standard of living for the average worker.
Well, unlike BO, JFK was a staunch anti-communist. That’s why a hard-core commie shot him.
From the great Learned Hand:
“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”
Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).
Brian Mulroney said something similar when he was criticized for not handing over more federal cash to the provinces: “There is only one taxpayer”.
>> THERE ARE NO CORPORATE TAXES!
Don’t perpetuate that nonsense. Nothing happens in a corporation that isn’t “factored”. Corporations pay taxes. Then again the dividend beneficiaries a second time.
Consumers don’t necessarily suffer the costs of the corporation’s income taxation. But it directly impacts the ability to pay shareholders, hire, grow, R&D, etc.
Corporate taxation feeds the pigs in govt primarily as a cost to the shareholders and company growth.
Burger King is one of the crappiest fast food joints in the universe but I still don’t blame them for moving to Canada to get out from un the US tax system.
“torn down and made into bird sanctuaries”
KFC?
Ted Kennedy is the one that brought the tax breaks when he wanted to transfer his trust fund to the Bahamas to avoid taxes.
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