Deep Tax Cuts Opens Northern Front for U.S. Companies

[Purveyor]

By Scott Deveau and Eric Lam Aug 26, 2014 10:54 AM ET

Canada has become the latest frontier for U.S. companies fleeing the high cost of business, spurred by low corporate taxes and a policy that keeps international earnings out of the clutches of the Internal Revenue Service.

Burger King Worldwide Inc. (BKW), the second-largest U.S. burger chain, agreed to buy coffee-and-doughnut company Tim Hortons Inc. today for about C$12.5 billion ($11.4 billion) and move the headquarters of the combined company to Canada. It’s “not fair” that companies can renounce their U.S. citizenship by filling out paperwork, a White House spokesman said yesterday.

The deal, which is still subject to the standard approvals, for Oakville, Ontario-based Tim Hortons follows Valeant Pharmaceuticals International Inc.’s merger with Canada’s Biovail Corp. in 2010, which sparked the latest so-called tax-inversion wave.

Burger King is unlikely to be the last U.S. company to consider moving north even as President Barack Obama and his aides try to curb the practice, tax experts say. In addition to avoiding U.S. taxes on global earnings, companies like Burger King can take advantage of Canadian tax rates that have been cut by about a quarter in the past eight years.

“We have now made it a lot more attractive for companies to say Canada is a good place to set up shop,” said Jack Mintz, director of the University of Calgary’s School of Public Policy.

more...

http://www.bloomberg.com/news/2014-08-25/tim-hortons-targeted-as-u-s-tax-inversion-heads-north.html

[Phlem]

1. Companies who move their headquarters out of the US to

avoid tax cuts should have to pay a tariff to sell their products in the US. Bunch of fuckers.

When do the US citizens get to have huge tax cuts like corporations?

What's the setup. Eventually the only tax the government collects will just come from citizens?

Some TTP before the actual TTP?

[RunInCircles]

2. Another race to the bottom courtesy of free trade

There is no such thing as free trade. There is always a price to be paid and the American middle class is paying that price.
Cutting taxes is a fools errand as somebody else will always cut their taxes more in a race to the bottom.
CEO's get paid 10's of millions of dollars to prioritize immediate profits above every other concern. Any CEO who holds onto an outdated concept of morality being more important than profits will be replaced. There are solutions such as balanced trade policies and tariffs which favor US companies that pay income tax that would eradicate this problem but these solutions are not optimal for the 1%. I know I am just spitting in the wind here as those that matter (not me) could care less if the entire middle class is eradicated for the sake of short term profits.

[LoisB]

3. These corporations don't pay any taxes anyhow so what difference does it make

what the rate is? Wonder what Canada is going to do when it finds out that "American" corporations expect to get tax refunds, not pay taxes.

[yortsed snacilbuper]

4. " "American" corporations expect to get tax refunds, not pay taxes."

Also, they will expect to lower wages and get rid of the Canadian health care system!