To a large extent progressive politicians who wish to redistribute the wealth of America to smaller—less productive countries created this monster—but now those same politicians are feeling the wrath of their failure surrounding the tax inversion tactics created by the federal government. Tax inversions are where United States corporations move their headquarters to other countries to avoid paying corporate taxes. While those same progressive activists in government wanted this to happen to some extent—they did not bother to do the math on the potential impact to loss in the United States treasury. When Burger King recently announced that they were about to move to Canada to avoid the high corporate taxes in the United States, it forced politicians like Obama and Ohio’s Sharrod Brown to confront the issue as “unpatriotic.”
To the progressive politician patriotism means supporting their system of government schools, their high monopolistic wages for road maintenance, their social infrastructure created by government for government through an intrusive tax system. Obama’s response to the Burger King exodus was that their failure to pay future taxes would lead to tax increases for individual citizens who would be forced to cover the federal bill for services rendered. However, it never occurred to Obama, or Brown that their progressive policies which cost a lot of money—their wealth redistribution schemes, their ridiculously inefficient education system, their welfare policies were unsolicited by a large portion of the thinkers in the United States. Just because the producers, thinkers, and general entrepreneurs are in the minority in America does not mean that the masses through democracy can vote themselves the legal ability to loot and pillage enterprise. Corporate taxes in America are among the highest in the world because of intrusive progressive politicians representing the degenerate masses. They did not consider what would happen if those corporations picked up and left because the looting of their profit would be deemed too costly.
President Obama intensified his criticism of U.S. firms that shift their headquarters overseas Thursday, arguing the tax-saving tactic is unfairly “gaming the system.”
“This is basically taking advantage of tax provisions that are technically legal,” Obama said in an exclusive CNBC interview, referring to a surge of U.S. corporations transferring their official addresses to Ireland, Bermuda or other lower-tax jurisdictions.
“But I think most people would say: If you’re doing business here, if you’re basically still an American country, but you’re simply changing your mailing address to avoid paying taxes, then you’re really not doing right by the country and by the American people,” said Obama.
He acknowledged that corporate executives and board members are paid to maximize company profits and expand business operations. “But people are also paid to be good corporate citizens, they’re also paid to make sure that they’re thinking about, in addition to shareholder value, how do you grow a company over the long-term,” said Obama.
NEW YORK (CBS Cleveland/AP) — Burger King says it struck a deal to buy Tim Hortons Inc. for about $11 billion, a move that creates the world’s third-largest fast-food company and could accelerate the international expansion of the Canadian coffee and doughnut chain.
The corporate headquarters of the new company will be in Canada. The two brands will continue to be run as stand-alone chains, with Burger King still operating out of Miami.
Some analysts have suggested that Canada’s lower tax rates stand to benefit Burger King over time. But Burger King said that’s the not main motivation for the deal.
During a conference call with analysts and investors, Burger King Executive Chairman Alex Behring stressed that international growth possibilities are driving the deal. He noted that 3G Capital, the investment firm that owns a majority stake in Burger King, has turned the hamburger company into one of the fastest-growing chains since buying it in 2010. He said that experience will be applied to Tim Hortons.
Sen. Sherrod Brown, D-Ohio, is calling for a boycott of Burger King.
“Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders. Burger King has always said ‘Have it Your Way’; well my way is to support two Ohio companies that haven’t abandoned their country or customers,” Brown said in a statement. “To help business grow in America, taxpayers have funded public infrastructure, workforce training, and incentives to encourage R&D and capital investment. Runaway corporations benefited from those policies but want U.S. companies to pay their share of the tab.”
Tax inversions, newly popularized by the law firm Skadden Arps Meagher & Flom four years ago, have taken on a new popularity this year as many corporations struggle to appease shareholders looking askance at growing corporate cash piles. While corporate cash piles act as a bulwark during recessionary times, the recovering economy has made the multibillion-dollar cash hoards look like bad financial management.
Many US corporations have complained loudly about US tax rates, even though it’s rare that they pay the full burden of 35% to 39%. Out of the Fortune 500 of prominent US companies, 288 paid an effective US federal tax rate of just 19.4% between 2008 and 2012, according to advocacy group Citizens for Tax Justice.
The conflict really centers around the profits that US companies generate overseas. These foreign profits have flooded the coffers of US companies, making up the bulk of an estimated $1.5 trillion in excess cash. Some, like Apple, have burned down some of the money by returning it to shareholders in the form of dividends, or have bought back their own stock in an attempt to drive their share prices higher on the open market. Still, the trillions remain out of reach until the companies make peace with the taxes they will have to pay, and Apple CEO Tim Cook has testified to federal officials in favor of a tax holiday.
What is ignored by politicians like Obama, and Brown—progressives who falsely believed they could build an empire of dependents in America and that corporations and the productive entrepreneurs of industry would gladly pay for services, schools, roads, and government infrastructure that they don’t support—for the greater good as defined by those same progressives, is that people might not want to pay for their view of the world. Brown’s statements specifically about Burger King was that the business of the fast food chain was built by those same infrastructure items and that the restaurant chain does not want to pay their fair share. But consider that roads to nowhere have no value unless there is a Burger King to drive to, or an Apple product to purchase at a shopping mall. Education has no value unless it is to prepare young people to live in the world created by entrepreneurs—people who will eventually eat at Burger King or drive a car to make an Apple Store purchase. In a capitalist society entrepreneurship comes first, dedication to social causes that win Democratic elections second. The “egg” comes first in that kind of society and it is under a capitalist society that Burger King was created. Socialist countries don’t create such places.
It is patriotic to leave America when progressives have infiltrated capitalism so ridiculously that it has weakened the capitalist system which built all these marvelous businesses. It is patriotic to say no to higher taxes because most taxes only serve politicians who benefit from the demographic receiving wealth redistribution. Most politicians, especially those like Obama and Brown have no ideal how two quarters are made into .50 cents and how the value was created to begin with. All they see is that somebody has money and that they feel it is their duty to social justice to take that money and give it to somebody who doesn’t have it. Most of their public education systems teach the same behavior and their road construction crews are artificially high in cost because of their monopoly on that particular construction industry. The system really only benefits progressives and their politicians—it does not benefit the job creator. Without a job creator there is no place for a road to go, or even the need for an education—because the destination is created by the few for the many. Not the other way around.