8-26-13 – Burger King Will Have It Their Way

Posted by Rob Roper

Would it be fair to say that any income sensitized Vermonter who elects to pay a lower property tax bill based on their income rather than a higher bill based on their property value is greedy? Isn’t paying their fair share? Hates kids? Or is in some way unpatriotic? After all, their decision means we have less money to educate our children, and certainly the state would love the extra cash.

Most (if not all) people would say this is ridiculous, and rightly so. Everyone has an obligation to pay the taxes they owe by law, but nobody has an obligation to pay more taxes than legally required. This is why it is equally unjust to cast aspersions and accusations at companies choosing legal paths to lower tax bills – most notably of late, “corporate inversions.”

A “corporate inversion” occurs when a U.S. company buys a company based outside the U.S, and then moves its legal address to that other country, becoming in the process subject to the other country’s tax laws. Burger King appears to the latest U.S. company to employ the corporate inversion strategy with a deal to buy Tim Horton’s of Canada.

Why would a U.S. company do this? The United States has the highest corporate tax rate in the modern world at nearly 40%. Canada’s tax, on the other hand, is 26%. Even more onerously, the United States is the only G-7 nation to tax foreign profits when they are repatriated. Canada, France, Germany, Italy, Japan, and the United Kingdom impose little or no tax on repatriated foreign profits.

In blunt terms, doing business with the U.S. is a rip-off. Our government is greedy.

And, this greed looks like it could cost the U.S. treasury and estimated $20 billion over the next ten years as companies leave for other climates where they are treated fairly. So, our government is both greedy and stupid.

None of us would patronize a restaurant that charged twice as much for the same meal as the restaurant(s) next door, just as none of us would pay a higher property tax bill when a lower cost option is legally available – and no one would blame us.

The United States used to be the place businesses and entrepreneurs flocked to for lower taxes, less complexity, and greater opportunity. This is what made our country great. This is what let us build the most powerful economy in the world. Our government should take a lesson from Burger King, which built its brand by telling its customers to, “Have it your way.” In other words, give people a good product and reason to do business with you. Don’t kick people in the teeth and expect them to stick around.

– Rob Roper is president of the Ethan Allen Institute

{ 1 comment… read it below or add one }

jim bulmer January 16, 2015 at 6:18 pm

Unfortunately, common sence was never Washington’s strong suite.


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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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