In defense of Burger King

I am hearing criticism of Burger King for wanting to acquire Tim Horton’s and relocate its HQ to Canada. Aside from ingratiating themselves with Canadians, a huge customer base, they will also enjoy a lower corporate tax rate than in the U.S. Many Americans are critical of the company wanting to do something that will lower its taxes at the expense of U.S. tax revenue.

To this criticism I say that this is a business. If a business can be healthier and more prosperous by moving, then that’s what a business is supposed to do. A business is not a political entity or a citizen that is obligated to have patriotic ideals. A business exists to serve its customers and do so profitably.

I would rather spend my energy to criticize the Americans who lie and cheat on their taxes than a company that is making an honest business decision.

Your position doesn’t seem to take into account that, in the US, businesses ARE citizens, since we count them as people. So I’d say that your argument fails in that regard.

Since the US policy of taxing the income of American individuals and businesses earned anywhere in the world is contrary to almost every other country’s policy, I have absolutely no problem with them taking steps to avoid it. When Canada and Europe have more business-friendly policies than we do, something is wrong with us. Our foolish tax code is what leads to companies moving headquarters to other countries and to draconian rules on foreign banks with American customers. Simply so the US government can try to capture tax revenue that almost no one else does.

People also have the right to move due to whatever reason they wish. If tax is one of them then so be it. Individuals and companies move from State to State in order to take advantage of lower tax rates within the US. They also have a right to move to an entirely different country. Let’s hope we see more of this.

Yes, hopefully we’ll see more of this, because I’m looking forward to my personal income taxes going up to make up for less corporate tax revenue.

Of course they can move if they want to. And, people can give them crap if they want to as well, and boycott their stores for being amoral. Corporate actions have consequences – they could minimize their costs by selling rat meat, but the customers may decide not to go there. They can minimize their tax burden by moving away from the US, and customers can decide to stop going there for that reason as well.

Canada is not that big of a market anyway. They have a smaller population than California. It’s not for the market share – BK is already up there – it’s for the taxes.

Walgreens threatened to do the same thing, but decided against it. Maybe a boycott can convince BK to do the same thing.

What taxes would you raise to make up for the shortfall produced by only taxing income made in the US? Which corporate deductions would you eliminate? There is no appetite in congress for raising any taxes, so if more corporations decide to follow suit, it will just mean bigger deficits.

If any company wants to be treated as a foreign company, so be it.

Let’s see how they like being a non-American company for purposes of doing business with the U.S. Government. Why should a non-American company have sweet deals to set up restaurants on U.S. military bases, for example? Seems like American companies should have first crack at those opportunities.

I recently read that Ingersoll Rand has lucrative contracts to maintain U.S. military bases, even though it moved its headquarters to Bermuda 13 years ago. If they don’t think maintaining a U.S. identity is worth it for tax purposes, they also shouldn’t get government contracts if a U.S. company is capable of doing the same work. I wish Ingersoll Rand the best of luck in winning those big-dollar contracts to maintain Bermudan military bases, however.

I think the public would support such a law, Ravenman, but the moneyed interests would squash it.

I don’t know that it’s a simple tax inversion. Apparently Burger King & Tim Hortons are roughly equal sized companies, and the merger will mean that the majority of their business is done in Canada, so it does make sense to move the headquarters there for that reason.

Plus, the tax rate of both companies is about 27%, so it’s not like they’re getting much of a break moving to Canada, if at all.

Actually I would like to see spending reduced to halt the inexorable rise of taxes.

Yes, lets embrace the world of economic patriotism. Watch as costs increase when non US based companies are edged out of these contracts. While we are at it, every other country will do the exact same in retaliation. US companies can say goodbye to contracts with the Canadian Govt, the German Govt, the UK Govt, and the Chinese Govt. The US market does not have the same clout as it did 30 years ago. Every passing year it becomes a smaller fish in a bigger pond.

How many contracts do you think US companies have with the Chinese government to support their military?

Most likely they are just making noises in hopes of some kind of concession or subsidy; in reality, taxes have a secondary effect on where companies base themselves at most. Plenty of communities have slashed taxes to keep or attract companies, only to have the company move elsewhere anyway.

What makes you think the rest of the world doesn’t already? We’re the oddballs here, not the norm.

So economic patriotism is only to be limited to military contracts? Thats not the way these things work. If you stop a company A from bidding on a military contract for nationalist reasons you can be sure the offended country will counter with an Act preventing US companies bidding on non military contracts.

Assume you stop a British company(for whatever reason) from bidding on NASA contracts. The British Government are kinda screwed if it limits its retaliation to preventing US companies bidding on British aerospace contracts. But it will retaliate by preventing US companies from bidding on things such as NHS contracts. Thats the great thing about human nature, it can think of allsorts of creative ways to be complete bastards.

I very much doubt this. Im sure most countries have a fairly mixed record on government contracts. Some will be fairly open, some will be corrupt, some will be based on economic nationalism. With the amount of political back scratching, pork barrelled politics and downright corruption in Congress im guessing the US will be middle of the international pack when it comes to doling out contracts to foreign companies. Indeed, if US economic performance is anything to go by US companies probably receive more than there fair share of such luctrative contracts abroad.

So, tell me how many US companies hold contracts with NHS.

A sh*tload. Though I used the NHS only as an example. I could have used as an example almost any sector in any country.

Here’s a link from the Indie. Note the story plays a fine line between economic nationalism and “concern” about privatisation of the NHS.

You just provided me a cite that says that Labor disagrees with a treaty under negotiation that would allow US companies to take over the NHS, IF the treaty is approved; and Labor wants to exclude those US firms from the UK if that treaty were approved. It also says that one US health care company plans to open a private clinic in London. Both positions are just peachy by me.

I hate when I have to summarize the cites to show that they say something other than what was to be “proven.”

Hey, me too. And, I’d like a pony as well.

Since defense spending isn’t going down any time soon, and SS and Medicare never gets touched, and we have to keep up our interest payments, that leaves not much room to cut, and cutting most of that space hurts the little guy (medicaid, food stamps, welfare, unemployment, pre-school, college aid, housing aid, infrastructure, etc.)

Is it your contention that US citizens cannot move abroad? Cannot renounce their citizenship and become Canadians? Are all US citizens required to have “patriotic ideals”?

Not that your statement about businesses being citizens is correct, but let’s just assume it is, arguendo. So what is the problem?

I’m not sure I understand. There are US companies that hold NHS contracts. The new treaty would just further reduce the barriers to entry.