Why Burger King’s Expatriation Is The Moral Thing To Do

It was announced last week that Burger King had bought a famous Canadian restaurant franchise known as Tim Horton’s to reduce the amount of taxes they “owe” to the US government.  An upcry arose!

As usual the mainstream media and the people who watch it have the story totally wrong. Burger King is not giving US taxpayers a “raw deal” by looking to move abroad so as to save on profits which are not repatriated. Instead, the iconic fast food burger chain is doing the moral thing by moving its tax-base outside the war-mongering, highly socialist US federal government’s reach. 

The mainstream media will never give you this side of the story. This obvious trend towards expatriation terrifies the talking heads. You have to come to alternative media sources to get the truth. As Howard Kurtz writes at Fox News,

I feel confident in saying that most Americans are disgusted by the perfectly legal practice of US companies avoiding taxes by incorporating in another country.

If this is the case, it is because Americans love bombing other countries. They lust for blood. I can think of no other logical explanation Americans would want the machine in Washington to continue being fed. Burger King is not the first company to make the moral decision to leave the US tax farm. Many American companies are going abroad – as many as 70. These so-called “inversions”.

Even the most American of investors stand behind the inversion. Iconic American billionaire, Warren Buffet, coughed up $3 billion so the hamburger chain could buy the Canadian donut outfit Tim Hortons. Buffett did this just one month after Obama denounced ‘inversion’ tactics as an ‘unpatriotic tax loophole’, ordering regulatory changes to undermine them.

The debate has been totally laughable. It is truly shocking how clueless Americans are about why these companies (and citizens) are leaving the US in droves.  The US is not competitive! For a country that claims to have been built on capitalism, it sure does not understand free markets.

US tax policy has made the US uncompetitive globally. The nation has the highest effective corporate income tax rate in the developed world.

And the US taxes earnings of foreign subsidiaries of US companies once that money comes back to the US. US corporations instead have chosen to keep more than $1.9 trillion earnings offshore abroad. The moral thing to do.

The past couple years alone have seen dozens of well-known US companies move abroad. Many have at least considered it. All this just to lower their corporate income tax. All the politicos in Washington would need to do is lower the US corporate income tax, but they are Marxist and Keynesian idiots. In the US, the wealthy are now seen as the cash-cows for the poor thanks to the nanny state’s government welfare. As Nick Giambruno of International Man points out, Medtronic, Liberty Global, Sara Lee, and Omnicom Group–the largest US advertising firm–have all moved abroad. Pfizer looked into moving abroad in order to cut its tax bills by $1 billion each year. Walgreens also mulled doing the same.

Walgreens was looking at Switzerland. Its tax rate would decrease to 20% down from 31%. The move would save around $4 billion over the next five years. Quoting an international tax lawyer, The New York Times stated, “it takes one company with enough public recognition to start [a] domino effect.”

Walgreens backed off due to the public scrutiny. By moving, though, Walgreens would have gained a big advantage over its competitors who will all be paying the effective US corporate  tax rate. I still think they will do it. They’ve tested the waters. And now Burger King has made the move.

I almost coughed up my tacos when I read that Republocrat Senator Chuck Grassley from Iowa said,”These expatriations aren’t illegal. But they’re sure immoral.”

What a joke! Immoral! Sorry, Chuck, but immoral is bombing nearly every country on the planet or at least intervening to the tune of millions dead and forcing people at gunpoint to pay for it.

These companies don’t want to keep giving parasite psychopaths in Washington DC more money. It’s immoral to keep funding Washington, DC. These companies are doing the moral thing by paying taxes in less war-prone nations. Inversion is a matter of life-and-death for people all over the planet, including in America. While people abroad depend on the inversion of American companies to slow the tide of American-led war, Americans depend on US companies not inverting so that they don’t starve when their food stamps run out.

I am not so much championing Burger King as much as I am championing the notion of an inversion. Personally, I think Burger King produces nutritiously void foods and promote an unhealthy and early-to-the-grave America (albeit admitting I have eaten it after a long night out and it has been delicious and appreciated at that moment). As far as I know, the only thing I support in their business model is the company’s long history of aggressive tax-reduction strategies and others.

The firm has long been trying to bring down taxable profits in the US and maximizing profits reported in low tax jurisdictions.  “I would be surprised if in five years’ time, their tax rate does not come down reasonably dramatically,” said Professor Stephen Shay, from Harvard Law School, who has testified to Congress on corporate taxation. Great for Burger King, in this regard. 

By operating a tax-efficient overseas regime, with income coming through Switzerland, Burger King’s effective tax rate has been 15% on foreign income in the past three years. Clearly Burger King wants to lower that rate.  What does Burger King have up its sleeves? As an American company Burger King cannot cut its current American tax bill by routing franchise fees from its US franchisees via Switzerland. If they bought Tim Hortons this would not apply to the Canadian company.  

At this point, for a company clever on taxes like Burger King, despite its status as an American icon, Obama’s vision for a 28% corporate tax rate won’t be low enough.

And this is all besides the fact that THERE IS NO CORPORATE TAX.  Corporate tax is always passed on to the consumer… it is a tax on consumers.  Yet, look at all the tax slaves in the US rising up angrily that a company is trying to find a way for them to be extorted for less money.

It’s a thankless job helping people by always doing the moral thing (in this case avoiding taxes at all costs).  But all of us thank Burger King for their service.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.