The Dems (and RINOs) want all the tax money they can get out of corporations, so they’ve created elaborate laws that facilitate tax rates that are as high as 35% on corporations here in the U.S.
This is exactly why some of the nation’s top-earning corporations have pursued a tax reduction strategy called a “tax inversion.”
According to Forbes, a tax inversion “occurs when an American company merges with a foreign one and, in the process, reincorporates abroad, effectively entering the foreign country’s tax domicile. An American company that merges with a Canadian target company for share consideration can avoid U.S. residency for tax purposes as long as the shareholders of the Canadian target end up owning at least 20% of the shares of the new parent immediately after the acquisition.”
Tax inversions have recently been a target of Democrat lawmakers, including Obama, because they’re mighty upset that their “hard-earned tax dollars” haven’t been ending up in their pockets.
But this isn’t stopping Burger King, one of America’s largest fast food purveyors, from considering a deal to acquire Tim Horton’s, one of Canada’s largest fast food restaurants.
Burger King is worth around $9.6 billion and Tim Horton’s is worth about $8.4 billion.
The total valuation for the two put together is roughly $18 billion. And right now BK is aggressively pursuing a merger that would allow them to move their corporate operations into Canada.
Why Canada? As Forbes noted:
A recent KPMG Report Focus on Tax, ranked Canada as the #1 country with the most business-friendly tax structure among developed countries when adding up a wide range of tax costs to businesses from statutory labor costs to harmonized sales tax.
When you think about it, moving to a country where the corporate tax rate is only 26.5% instead of 35% makes a lot of sense.
The big question is… Can Burger King get away with it?
Obama has called companies that try to get away with tax inversions “economic terrorists.” His belief, which is shared by nearly all democrats, is that everyone needs to “pay their fair share.”
But how could any company that is trying to maximize profit and pay its shareholders remain in the U.S. any longer?
Though tax inversions are legal for the time, don’t expect career politicians to ignore them.
At the end of the day, corporations, much like people (even though they are not people, no matter what a court ruling says), want to keep their money. They work hard for it, and deserve the fruit of their (honest) labor.
And so do you.
And as much as the government is sticking it to corporations, it’s even worse for you.
If you want to see how you can hold onto more of your money, you need to check out this video today.