Jump to content



Photo

  • Please log in to reply
69 replies to this topic

#1 DocM

DocM

    Neowinian Senior

  • 18,677 posts
  • Joined: 31-July 10
  • Location: Michigan

Posted 25 August 2014 - 11:29

In buying Tim Hortons, a Canadian chain, BK will move its HQ to Canada and save taxes, a tactic known as Inversion.

Many companies are taking this route due to Obama raising the US corporate tax rate to nearly 35%, among the highest in the developed world. Now add state corporate income taxes and you have an average tax load of 39.1%.

Obama calls it unpatriotic. I call it self defense against a tax system so insane you can run afoul of its legalities without criminal intent. Not even the IRS understands the tax code, which is why it often loses disputes in Tax Court.

On the other hand is this opinion piece by the NY Times. They say repeal corporate taxes and replace them with a consumption tax. The theory is that companies don't really pay taxes since they simply pass their taxes on to their customers. In effect, they are surrogate tax collectors (which double as political whipping boys.)

I lean more towards a two-tiered flat corporate rate like Canada's - generally 15% for small businesses and 25% for large with few alterations.

http://mobile.bloomb...rant-chain.html

Burger King in Talks to Buy Canadian Chain Tim Hortons

Burger King Worldwide Inc. (BKW), the second-largest U.S. burger chain, is in talks to buy Tim Hortons Inc. (THI) and move its headquarters to Canada, becoming the latest American company to seek a relocation to a lower-tax country.

Burger King, which is majority-owned by 3G Capital, would create the worlds third-largest fast-food chain by merging with Canadas bigger seller of coffee and doughnuts, the companies said in a statement. Canadas corporate tax rate is 26.5 percent, compared with 40 percent in the U.S., according to audit, tax and advisory firm KPMGs website.

The deal threatens to renew debate over American companies shifting their headquarters internationally in search of a lower corporate tax bill. The trend drew criticism last month from President Barack Obama. His aides vowed that the administration would take action to curtail the practice.

3G Capital will own the majority of the shares of the new company, with the remainder held by other shareholders of Tim Hortons and Burger King, according to the statement. The two chains will operate as stand-alone brands, the companies said.

The combined business would have about $22 billion in sales and more than 18,000 restaurants in 100 countries, according to the statement. The deal is subject to negotiation, and Burger King and Tim Hortons dont plan to comment further until an agreement is reached or discussions are discontinued.

Inversion Surge

Between mid-June and late-July, when Obama began criticizing deals that cut taxes by relocating outside the U.S., at least five large American companies have announced plans to make such a move -- known as an inversion. That includes AbbVie Inc. and Medtronic Inc.

Since the start of 2012, at least 21 U.S. companies have announced or completed the deals, comprising almost half the total of 51 such transactions in the past three decades.
>

37.jpg


#2 spenser.d

spenser.d

    Neowinian Senior

  • 11,082 posts
  • Joined: 19-December 03

Posted 25 August 2014 - 11:52

Yes because that idea went over so well with Walgreens. And 35% is misleading anyway considering all the tax loopholes. Abbvie was only paying 26 and cut it to 13 after their inversion. Its not self defense, its screwing the country you're truly operating out of in the name of padding an already profitable bottom line. Given the public reaction to the Walgreens ordeal I don't think people are on their side. Hopefully this blows up in BKs face the same way.

#3 +Matthew S.

Matthew S.

    Your worst nightmare

  • 3,026 posts
  • Joined: 15-December 05
  • Location: Georgetown, ON
  • OS: Windows 8.1 / Mac OS X 10.10.x iOS 8
  • Phone: iPhone 4S

Posted 25 August 2014 - 12:01

God No.  Tims is still at least decently good, if BK takes over... crap... home brewed coffee from now on than...



#4 My8th

My8th

    Neowinian

  • 353 posts
  • Joined: 01-November 13

Posted 25 August 2014 - 12:42

BK use to be fine but the last few years it has nothing but soggy burgers, I hope Timmies doesn't get the same treatment.



#5 Fresh

Fresh

    It's always best Fresh!

  • 9,360 posts
  • Joined: 11-April 03
  • Location: United States

Posted 26 August 2014 - 13:39

Warren Buffett to Invest in Burger King's Planned Deal for Tim Hortons Berkshire Hathaway Expected to Provide About 25% of Financing, Thrusting Billionaire Into U.S. Tax Debate

 

http://online.wsj.co...tons-1409012196

 

Say it is not so....Warren? How unpatriotic... :angry: 



#6 sidroc

sidroc

    The critic

  • 4,995 posts
  • Joined: 25-October 03
  • Location: Somewhere

Posted 26 August 2014 - 15:36

Tax rate means nothing when very few companies pay the rate.

#7 Fresh

Fresh

    It's always best Fresh!

  • 9,360 posts
  • Joined: 11-April 03
  • Location: United States

Posted 27 August 2014 - 10:28

Burger King buys Tim Hortons: The 'hypocrisy' of Warren Buffett

 

http://www.independe...tt-9692707.html



#8 sidroc

sidroc

    The critic

  • 4,995 posts
  • Joined: 25-October 03
  • Location: Somewhere

Posted 27 August 2014 - 13:20

Ice also like to add that the effective tax rate will remain the same and that the taxes to the US government do not change
Burger kung will still pay taxes on its us operations, but will only pay Canadian taxes on it's Canadian profits. If they stayed in america they would be taxed on overseas profits. I'm all for closing tax loopholes but this is a law I don't agree with. Pretty much anywhere else in the world does not tax you on profits made overseas.

#9 +LogicalApex

LogicalApex

    Software Engineer

  • 6,461 posts
  • Joined: 14-August 02
  • Location: Philadelphia, PA
  • OS: Windows 7 Ultimate x64
  • Phone: Nexus 5

Posted 27 August 2014 - 13:25

Ice also like to add that the effective tax rate will remain the same and that the taxes to the US government do not change
Burger kung will still pay taxes on its us operations, but will only pay Canadian taxes on it's Canadian profits. If they stayed in america they would be taxed on overseas profits. I'm all for closing tax loopholes but this is a law I don't agree with. Pretty much anywhere else in the world does not tax you on profits made overseas.


The USA doesn't fully either but a worldwide tax is probably coming to thwart these inversions. Burger King will likely pay very little to no US tax on its US operations by pushing them to Canada.

#10 sidroc

sidroc

    The critic

  • 4,995 posts
  • Joined: 25-October 03
  • Location: Somewhere

Posted 27 August 2014 - 14:17

Again, everyone misses the point. I'm posting from my phone and don't want to explain this right now but found an editorial that does.http://www.bloomberg...-for-the-donuts

#11 tiagosilva29

tiagosilva29

    Looking for a job in Lisbon

  • 12,231 posts
  • Joined: 08-May 04

Posted 27 August 2014 - 14:19

Again, everyone misses the point.

I'll wait for you to get a proper input device, bro.

#12 +LogicalApex

LogicalApex

    Software Engineer

  • 6,461 posts
  • Joined: 14-August 02
  • Location: Philadelphia, PA
  • OS: Windows 7 Ultimate x64
  • Phone: Nexus 5

Posted 27 August 2014 - 14:24

Again, everyone misses the point. I'm posting from my phone and don't want to explain this right now but found an editorial that does.http://www.bloomberg...-for-the-donuts


No time to read it all but he seems to be assuming that they can't leverage the patent licensing tactic to reduce us income. I don't think he is accurate there. I am sure burger king will be licensing its package design patents and others to offset.

#13 PGHammer

PGHammer

    Neowinian Senior

  • 9,174 posts
  • Joined: 31-August 03
  • Location: Accokeek, MD
  • OS: Windows 8 Pro with Media Center x64

Posted 27 August 2014 - 14:33

Warren Buffett to Invest in Burger King's Planned Deal for Tim Hortons Berkshire Hathaway Expected to Provide About 25% of Financing, Thrusting Billionaire Into U.S. Tax Debate

 

http://online.wsj.co...tons-1409012196

 

Say it is not so....Warren? How unpatriotic... :angry: 

 

Unpatriotic?  Please - the fiduciary responsibility of the members of a corporate boards to safeguard the interests of the stockholders.  The reason for this entire debate is that the United States - holder of the highest corporate tax rate on the planet - does not want to reduce it.

 

I don't blame Burger King (or Warren Buffett) for wanting to reduce their corporate tax bite (legally)  Considering how much of said tax bite is mis-spent (merely through straight waste and fraud alone), I don't begrudge individuals - of any income tax bracket) wanting to reduce their tax bite, either.  If you are so against tax loopholes or deductions, why have any at all?

 

What hypocrisy!



#14 Anibal P

Anibal P

    Neowinian

  • 4,368 posts
  • Joined: 11-June 02
  • Location: Waterbury CT
  • OS: Win 8.1
  • Phone: Android

Posted 27 August 2014 - 14:48

Unpatriotic?  Please - the fiduciary responsibility of the members of a corporate boards to safeguard the interests of the stockholders.  The reason for this entire debate is that the United States - holder of the highest corporate tax rate on the planet - does not want to reduce it.

 

I don't blame Burger King (or Warren Buffett) for wanting to reduce their corporate tax bite (legally)  Considering how much of said tax bite is mis-spent (merely through straight waste and fraud alone), I don't begrudge individuals - of any income tax bracket) wanting to reduce their tax bite, either.  If you are so against tax loopholes or deductions, why have any at all?

 

What hypocrisy!

 

Tell that to the President. he started floating this ignorant idea a month or so ago, forget what scandal he was trying to divert attention from but the press as usual have gone all out on this nonsense 



#15 spenser.d

spenser.d

    Neowinian Senior

  • 11,082 posts
  • Joined: 19-December 03

Posted 27 August 2014 - 16:00

Unpatriotic?  Please - the fiduciary responsibility of the members of a corporate boards to safeguard the interests of the stockholders.  The reason for this entire debate is that the United States - holder of the highest corporate tax rate on the planet - does not want to reduce it.

 

I don't blame Burger King (or Warren Buffett) for wanting to reduce their corporate tax bite (legally)  Considering how much of said tax bite is mis-spent (merely through straight waste and fraud alone), I don't begrudge individuals - of any income tax bracket) wanting to reduce their tax bite, either.  If you are so against tax loopholes or deductions, why have any at all?

 

What hypocrisy!

 

So their responsibility to their stockholders is more important than their responsibility to the country they operate out of (not to mention take advantage of)? I think not.