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Burger King Moving To Canada?

Discussion in 'U.S. Politics' started by GBFan, Aug 25, 2014.

  1. GBFan

    GBFan Well-Known Member

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    Burger King is in merger talks with Canadian coffee chain Tim Hortons, a deal that would allow the burger seller to relocate out of the U.S. and possibly cut its tax bill.
    The new company would be headquartered in Canada, the two firms said in a joint statement. Both Tim Hortons (THI) and Burger King (BKW) would continue to operate as standalone brands.


    By moving north of the border, Burger King would be completing what is called an "inversion" -- a strategy that allows U.S. firms to lower their tax bills by merging with a foreign company, and then relocating to the new country.

    Corporate tax rates are lower in Canada than the U.S., which has the highest tax rate among developed economies.

    In the case of Miami-based Burger King and Tim Hortons, the combined company would be the world's third largest fast food chain, generating $22 billion in sales at more than 18,000 restaurants in 100 countries worldwide.

    In the past decade, at least 47 U.S. companies have used the inversion process. Several inversions have been proposed this year and more are in the works.

    One major inversion deal was announced in July, when Chicago-based AbbVie agreed to a $54.7 billion merger with Britain's Shire, slashing AbbVie's effective tax rate to about 13% by 2016 from 26%.

    Drugmaker Mylan also announced last month that it would buy a Netherlands-based unit of Abbott Laboratories in a deal designed to let it incorporate abroad.

    The flurry of deals has attracted the attention of Washington, and the White House has called on companies to practice "economic patriotism."

    "They're declaring they're based someplace else even though most of their operations are here. .. My attitude is I don't care if it's legal -- it's wrong," President Obama said in July.
     
  2. Texas_tea

    Texas_tea Well-Known Member

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    This does not surprise me at all. The US has become one of the most unfriendliest countries in the world for business because of the tax rate.
     
  3. pocketfullofshells

    pocketfullofshells Well-Known Member

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    Yep it its really hard what with all those loopholes that have some companies paying nothing, most paying far far far less then the actually listed rate, and a historically low amount. By the way enjoy picking up the tab on your personal taxes. Also odd how Canada has Universal single payer health care, and you guys use to use the taxes in Canada against it...but now pretending its great...
     
  4. pocketfullofshells

    pocketfullofshells Well-Known Member

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  5. dogtowner

    dogtowner Moderator Staff Member

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    Sure, some get favorable tax treatment but what of the rest ? What was Burger King's effective rate ?
     
  6. pocketfullofshells

    pocketfullofshells Well-Known Member

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    don't know ask them. I have said for some time I would be fore a lower rate if got rid of tax breaks, as have many Democrats...also would not change that we have historic low rates for companies. but don't worry I am sure BK will use all the US resources , just don't ask them to pay
     
  7. BigRob

    BigRob Well-Known Member

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    What loopholes - and lower to what rate?
     
  8. PLC1

    PLC1 Moderator Staff Member

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    Yes, because of the corporate tax rate to be specific, and because of the necessity of providing health insurance for employees.
     
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