Burger King Worldwide Inc. BKW, +19.92% is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc. THI, +21.59% THI, +21.15% a deal that would be structured as a so-called tax inversion and move the hamburger seller’s base to Canada.
The two sides are working on a deal that would create a new company, the companies said. The takeover would create the third-largest quick-service restaurant provider in the world, they said.
The motivation behind this inversion is to reduce BKW's U.S. taxes. Who's next?
Speculation is rampant that the new corporation will introduce the much anticipated doughnut burger!
ReplyDeletehttp://www.marketwatch.com/story/the-doughnut-burgers-time-has-come-2014-08-25?link=MW_home_latest_news
Mick
ReplyDeleteThis could be good news for weight watchers. A burger with a hole in the middle is a good commercial idea. Cuts costs for the producer and cuts calories for the customer. At the same time I think the IRS would have trouble taxing the hole so additional savings there. Only one problem arises from this idea and that is to invent a new sauce. Maple syrup perhaps to identify with the new company location.
Cheers from a country anxious to copy anything the yanks invent which is detrimental to the health and well being of your citizens.
Canada's total corporate tax rate is 46% lower than the USA.
ReplyDeleteThat's a load of Whoppers and donuts.
When you work on small margins, any decrease in taxes is significant.
DeleteUnless we simplify the corporate tax code, lower the rates paid, reduce regulations, and rework our trade agreements, we may one day find no more U.S. based businesses.
ReplyDeleteBlasphemy, reduce tax rates.
DeleteWhat the taxaholics don't realize is the consumer pays the taxes.
Great way to maintain the divisiveness and the war on business though.
Gotta's got it. Simplify the tax codes. If you check the taxes actually paid by U.S. corporations they are in line with the rest of the world, the stated tax rates are a joke. Any corporation worth its salt will pay the lowest legal taxes, to do otherwise would be foolish. The consumers do pay the taxes and the shareholders share in the profits.
DeleteSaw in this mornings paper that the deal is done.
DeleteMick, Taxes like labor, materials building costs are a cost of doing business and built into the price of goods and services.
DeleteMy business, I did exactly that, even though the taxes are paid on profits, I raised the cost of labor to customers to bump my profitability to the targeted percentage. Every business does the same.
"Investor Warren Buffett is helping finance Burger King Worldwide Inc. BKW -3.33% 's planned takeover of Canadian coffee-and-doughnut chain Tim Hortons Inc., THI.T +8.56% according to people familiar with the matter, in a surprise twist that thrusts the billionaire into a debate over U.S. taxes.
DeleteMr. Buffett's Berkshire Hathaway Inc. BRKB +0.05% would invest in the deal in the form of preferred shares, some of the people said. Berkshire is expected to provide about 25% of the deal's financing, one of the people said. The exact structure of Mr. Buffett's participation remains unclear and the discussions are ongoing."
http://online.wsj.com/articles/warren-buffett-to-help-finance-burger-kings-takeover-of-tim-hortons-1409012196
A rising tide lifts all boats. http://www.bloomberg.com/news/2014-08-26/boehner-camp-profit-from-corporate-bid-to-avoid-u-s-tax.html
DeleteObama has raised campaign money from executives, directors and advisers involved in inversion deals, and the administration has said it won’t return any money. In 2009, as part of its bailout of the auto industry, the Treasury Department helped the Michigan parts supplier Delphi Corp. emerge from bankruptcy as a U.K. company.
DeleteBoehner and Camp have weighed in on the issue before. In 2004, the two lawmakers voted for a corporate tax bill that included language that made it more difficult for companies to invert without using a merger.
Last month, Camp was one of 34 Republicans backing a ban on federal contracts being awarded to some inverted companies, a vote he said “was important to highlight the issue.”
We played this game under Reagan of simplifying the code and lowering rates. The rates have stayed low, but all the loopholes have returned. I've listened to the arguments about corporate taxation and they are all bullshit. People simply don't want to pay tax. We could take away corporate taxes altogether, and not a damn thing would change. Prices of good would not go down, salaries would not go up, but profits will. Like the S&P report shows, it will simply syphon even more money out of the economy.
DeleteHey Max. Say what you will. When in business and I will be back in 2016, I never paid a dime in taxes. I estimated my business taxes for local, state, federal and built the taxes into goods and services. State raised taxes which they did one time, I raised rates. Raises, raised rates.
DeleteA great game. Without the increase in costs to the customer, I would have not been paid. Why would I have stayed in business?
Here’s a letter to Sen. Sherrod Brown:
ReplyDeleteSen. Sherrod Brown (D-OH)
Capitol Hill
Washington, DC
Sen. Brown:
You call on consumers to boycott Burger King(http://www.foxnews.com/politics/2014/08/26/ohio-sen-sherrod-brown-calls-for-burger-king-boycott-over-mooted-tim-hortons/) for taking steps to keep its shareholders’ taxes as low as possible by moving its headquarters to Canada - that is, for responding predictably to incentives that you yourself, as a legislator, helped to create.
First, you err in asserting that Burger King will “abandon” its American customers. A company headquartered in Canada is no more likely to “abandon” paying customers in America than is a company headquartered in Kansas likely to abandon paying customers in Arkansas. Indeed, with fewer of its profits siphoned off to fund the boondoggles that you and other members of the political class are fond of supporting, Burger King’s attention to, and ability to serve, its American customers will only improve.
More fundamentally, because you believe that people have a duty to operate businesses in ways that generate tax revenue for government regardless of the effects that such operations have on their owners’ net wealth, can we conclude, because you haven’t resigned from the senate to launch and operate full-time your own maximal tax-paying business, that you are derelict in your duty? In fact, it’s fair to ask how many businesses have you founded that earn profits for the government to tax? Because you’ve been in politics your entire adult life, I’m pretty sure that the answer is none - which means that you’ve created far less wealth for the government to confiscate than have the professional investors and business executives who you publicly and so pompously smear.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
(http://cafehayek.com/)
The question that should be discussed is why these companies are leaving.... why Americans are renouncing their citizenship in record numbers... why retirees selling out in the US and are choosing to live in Panama, Ecuador and Uruguay.
Who is John Galt?
DeleteVIEWS ON SPENDING
DeleteVoters continue to support cuts to federal government spending, whether through keeping the Budget Control Act in place, or enacting cuts along with an increase in the debt ceiling. A bipartisan majority (65%) firmly disagree that “there are no more cuts to make” to federal spending:
When it comes to federal spending, do you agree or disagree that “there are no more cuts to make”?
Agree Unsure Disagree
All voters 26% 9% 65%
Republican 16% 6% 78%
Independent 25% 16% 59%
Democrat 36% 10% 55%
Men 26% 5% 70%
Women 26% 13% 60%
Seven in ten (71%) voters say they are more likely to re-elect their Member of Congress if he or she voted to reduce spending. Just 19% are less likely. This includes a majority of key voter groups like Independents (54%) and women (71%).*
A majority (58%) of voters support keeping the bipartisan spending limits put in place from the Budget Control Act. Just 28% support abandoning the 2011 agreement and agreeing to a combination of spending and tax increases. Republicans, Independents, and Democrats are all prefer keeping the limits in place over getting rid of them.
If the debt limit is going to be raised, then voters support cuts alongside any increase. Six in ten (61%) agree if Congress increases the debt limit, then they should also cut spending. Just 23% support keeping spending levels the same, and 8% support increasing spending.
Eight in ten (79%) support more transparency in federal spending by supporting legislation that would require the federal government to put all of its spending records online. Just 15% oppose this. This includes widespread support among Independents (78%), Democrats (74%), young voters (85%), and women (75%).
The combined Burger King-Tim Hortons will generate just 20% of its revenue in the U.S. and 67% of it from Canada.
Deletedo your research. Did you happen to know that Burger King has a Headquarters already overseas? Switzerland, they have been moving money offshore for years. Unpatriotic company for a long time. I would boycott them but I don't patronize their nasty restaurants or eat their foul tasting burgers anyway.
Delete
DeleteBurger King isn't an American company today.
3G capital took BK private in 2010.
3G Capital is an Brazilian multi-billion dollar, global investment firm.
Talking to me or Sen Brown who who called out Burger King for 'abandoning' its customers in America? Of coarse he used the opportunity to plug Wendy's and White Castle, two Ohio companies, (One of his jobs as a Senator to promote the success of Ohio) "that have not abandoned their country or customers". This dunderhead went on to flail his arms about how nothing in America (and I presume, the world) would have happened without the government. I would love to see one of these 'if not for government' idiots and a historian get into a debate about that subject in a public forum... please let it be Obama. Please talk about roads and canals and railways and schools and policing and healthcare... Oh, please. Then the public, those who payed any attention anyway, would see just how inept, corrupt and wasteful government is in handling just about everything.
DeleteYou know, it is a wonderful thing to have the ability to frequent or boycott an establishment of your choice based on criteria that you find important. Ah, freedom of choice... to bad private business doesn't have the same right in its ability to choose the customers it serves... an enabling government indeed.
If roads, and schools, and courts and laws that protect business are such bullshit, why is it that nobody but oil companies set up shop in places that essentially have no governments? As a nurse in 2014, I make good money because millions of nurses before me endured shitty working conditions and fought for respect and inclusion in the health care system. It's not because of the government per se, it's because the people of my parents generation chose to use government as the tool it is to create an environment that private enterprise could thrive in. But, I get it. Government is just a leech and has never done anything that helped private enterprise. never.
DeleteIt isn't all or nothing Max.
DeleteGovernment provides some useful services that are necessities. With that comes the waste and corruption. There is zero attempt to end the waste and corruption. Rarely has spending ever gone down.
The problem is government has chosen for the American people to join the global market [place with free trade agreements. Now the impact of the global marketplace has hit Uncle Sam (countries with lower taxes) in the pocket book as it has the consumer they are mad as hell.
Days coming soon when Americans will get to decide whats really important and worthy of their tax dollars and what isn't when we begin paying for the 17.5 trillion past sins. You can either tax business more, higher prices to continue funding the largess of government or begin the process of cutting spending.
p.s. How's that school thing? Kids home for a 5 day weekend before she begins the long haul of school for the holidays.
This and your cohorts ‘centrist’ bullshit are the main reasons why I stopped posting here and why I may yet again. Now people here may not appreciate my participation. I certainly haven’t been greeted with any “Hi, how ya been” comments. If that is the case, all people need to do is speak up because there are other places where people actually look at the cause and effect of their positions and admit deficiency in their thinking when it occurs.
DeleteI know that both you and Rick are socialists or communists or crony capitalist/fascists or some combination of the above. You have many positions that I do not agree with but I do not ever use the all or nothing position to shut down your discussion. Being libertarian minded, I would say that I am just as socially liberal as you are but always... always in the context of individual liberty. You can’t show me one example of how a libertarian state has degraded to anarchy but I can show you dozens of examples of socialist, communists and fascists governments that end up being dictatorial and totalitarian. Why? Because of the very human power and greed impulses you deplore in private hands. People such as yourself push and pull others to accept the very thing, concentrated in one place, with all the power and money and guns which you prattle about elsewhere. As if you as a voter, like Dr Frankenstein, can control the monster you work tirelessly to create.
I don’t think for one minute (or I choose to think otherwise) that you or Rick wish for a totalitarian government. So I try to talk to you about positions based on facts. You like to talk about the ‘real world’ but refuse to talk about the events that lead to the problems that exist today especially if it was government that created the problem in the first place. You only see government solutions. I see it as a sign of disrespect when I use the words ‘limited government’ in a sentence and individuals such as yourself process the words through your very (whether you choose to accept the term or not) dogmatic filtering system that causes you to echo the words as... “No Government”. I get tired of talking to you about the facts that show clearly the debilitating and irresponsible and wasteful negative effects of many social programs as they exist and regular as clockwork the response comes back as ‘hater, racist, bigot, old white man.. blah, blah, blah. It’s like talking to a child.
Liberals always surprised me in their tenacity to stand firm in their philosophy without feeling the need to question some important presuppositions. I don’t think ‘all’ liberals are stupid or evil or something like that. For the most part, liberals seem to be well-meaning, tolerant people who think they stand for the right things... all to often to the absolute exclusion of other ways of looking at the same problem But this is exactly what makes liberalism so toxic. It’s a skeleton wrapped in a shiny cloak.
I think you will find Max that it wasn’t people of your parents generation who “chose to use government as the tool it is to create an environment that private enterprise could thrive in.” Private enterprise worked quite well long before your parents and the pervasive encroachment of government in the world of commerce. Private enterprise created the first railway, road and police constabulary in the US. Government turned them into Amtrak that has never returned money to the taxpayer, bridges to nowhere that would have never ever been considered by private enterprise and a federally trained and equipped jackbooted, badge and gun mentality of today’s para-police.
Government was always meant to be an adjudicator of agreement, a peace maker and an enforcer of those that society deemed to be too bad to be allowed to mix. Of course the believers of big government grant them the power to pass moral judgement.... so much so that over half of the people in our prisons have done exactly nothing to anyone else.
Hey Scott,
DeleteIt is amazing how the generalizations become the fact. Unfortunately it for the left and the right as well when neither side considers the rest of the story. The classic example is Corporate profits are at record highs. For some companies yes they are, others not so much and struggle to stay in business. The Corporations don't pay there fair share, what ever that is. Reality we pay the taxes like it or not in higher taxes.
In any case hang in there.
Burger King is a 99% franchised operation. 8580 of these are in the US. and these private operators will see no tax relief from this move. Purely a corporate play.
ReplyDeleteYes it is, 3G Capital, the owner benefits.
Delete