Burger King – Tim Horton merger


Burger King is going to buy the Canadian breakfast/coffee and doughnut chain Tim Horton’s for $11.4 billion dollars.   The reason it is in the news is because this supposedly is another big American company, buying a foreign company in order for the combined company to have its headquarters outside the United States. Why?   Because this is the impact of high taxation. If you keep your corporate tax rate at 35% and your next nearest industrial country tax rate is 29%, and it goes down from there to 12 ½% in Ireland.  Every other country in the world is lower than the US.  We have the highest corporate tax rate in the world and people are surprised that companies who want to stay competitive in the world marketplace are daring to move.

I don’t understand the surprise. I can understand the chagrin, I can understand the humiliation of having your stupid tax theory that doesn’t matter how high taxes go, people will still need to pay their fair share. Liberals, you’re stupid tax theory has been shown to be completely stupid and now dysfunctional. That is why corporations, without international sales, are leaving high tax states like California and New York and Illinois to go to Texas, and Florida and North Carolina. You are now not going to get an extra penny out of Burger King.

Of course, things like this bring out the crazies: there has got to be a boycott , the ‘Whopper’ has just es became un-American, another company wants to take your money out of the country. They don’t, really they don’t.   THE FACT OF THE MATTER IS no money is going to be taken out of the country. Any ‘Whopper’ sold in the US, the company will pay its usual taxes on it. Now that the company’s headquarters are in Canada, the tax on their overall profit will be less. The total federal and provincial taxes average is 27%. In the United States the average is 40%, in California it 45%.

Can you imagine starting a business, risking all your life savings, your money and vast amounts of your time, and the government does nothing but harass you along the way and make life harder for you. Make you work harder on idiotic regulation and compliance and fines you if don’t fill out stupid forms on everything, and they make you the bad guy, no matter what happens between you and your employees or customers. Then at the end of day, whatever it is you made they take 40% of it. Why bother? And that is how the government under Barrack Hussein Obama is trying to fundamentally change America- destroy private entrepreneurship.

Do you understand, though, that is not even the story. The real story can be found deep in the Wall Street Journal on Aug 26th.   You have to sell a lot of ‘Whoppers’ to get $11.4 billion dollars to be able to buy Tom Horton’s for cash. Well they didn’t have all of the money (probably because of the oppressive tax rate) so they received a loan for 25% of it. Now, who loaned them the money $2.85 billion worth, you got it Warren Buffett. Warren Buffett, the same guy who is the champion for the for the wealthy paying their fair share.   A billionaire is helping to finance and inversion as Burger King buys Tim Horton’s and moves their headquarters out of the United States. And of course, the way the loan was constructed, the payback of the interest and principal is sheltered for Buffett from US capital gains taxes.   Interesting that he operates under two sets of rules- one for everyone else and the special ones for himself that he gets by buying influence from the White House and Capitol Hill.

Now liberals have a well-known response, it doesn’t work any better than the high tax rates do, but they have a response. They hope the public will buy it and not blame them for what has happened because of what they done. They have raised the tax rate, they refuse to reduce it, they say corporations ought to pay their fair share, more so as there are fewer and fewer left. So here’s the liberal response, Ohio Sen. Sherrod Brown has now called for a consumer boycott of Burger King, a consumer boycott, that’s the ticket. He wants you to reduce your choice of fast food, in order to punish a company because they dared to suggest that they’re not going to pay those exorbitant taxes and are going to move out of the country, because after all this is a free country, right. Not to mention either that an effective (fortunately they seldom are) boycott would throw out of work hundreds of thousands of employees and add them to the already overcrowded low income group.

Burger King is going to become a Canadian citizen, and the liberals and their high taxes caused it. The liberals now want to blame Burger King for acting rationally (in the best interest of the company and its stockholders) even though they don’t.     But there has to be more, a company doesn’t make a $11.4 billion decision based on just taxes. Burger King wants to get into the business of breakfast. They haven’t really been good at providing a fast food breakfast menu. Breakfast sales, when you look at fast food restaurants, rose overall by $50 billion a year. This is the fastest-growing segment of the fast food industry. In fact the figures show that between 2007- 2012 90% of the fast food industry’s growth was at breakfast. Even Taco Bell is trying to compete with McDonalds.

Burger King has failed at a breakfast menu, so they are buying Tom Horton’s who knows how to do breakfast. Together the merger places Burger King squarely into the number three position in the fast food market of world, so it’s a significant business move for them.

But we really know what the liberals want. They will do the boycott, seeking to deflect blame onto the evil corporation instead of their outmoded tax practices. However, what the liberals really want to do is pass a regulation into law that says you can’t move to Canada or any other country and still do business in the United States. They want to cut the companies off altogether, put sanctions on corporate America (and we know how well sanctions work for Iran, and Syria, and Russia) so that all companies fall lock-step for the same wonderful liberal policies. They are trying to say to those evil American corporations who are constantly trying to figure out a way to screw the consumer and the government, to which they should owe allegiance and have a patriotic feeling to fork over anything that we liberals want from you. They are really just fascists! They want to use the power of government to affect the goals that you know are right, even if it takes extinguishing every freedom this country has to get there, because we would be so much better off doing things their way.


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