The Government Guilt Trip for Your Money
Burger King (NYSE:BKW) was crucified in the media this week after it announced that it was not only purchasing Canadian company Tim Hortons (NYSE:THI) but that it was also moving its address to Canada, benefiting from a so-called tax inversion.
President Obama calls it something else — an “unpatriotic loophole.”
But, of course he would say that, as ridiculous as it is. He has to.
First, Burger King pays an average corporate tax of 27.5% compared with Tim Hortons’ average tax of 27% in Canada. Not a huge difference. However, Burger King will benefit because it won’t be paying American taxes on what it earns in South Africa or Colombia or the 93 other countries where it has franchises. American companies share this taxation “privilege” with only one other country in the world — Libya.
And second, the idea that a tax inversion is an “unpatriotic loophole” is just silly. What could be more American than saving a few bucks? Are you telling me that Ohio Senator Sherrod Brown — the gentleman calling for a boycott of Burger King because of its move to Canada — doesn’t take advantage of every deduction and loophole available to him when he files his taxes every year? Are the rest of Americans who take joy in cutting down their tax liability “unpatriotic” as well?
When you consider that the U.S. government has tallied up a debt of more than $17 trillion and doesn’t show any sign of stopping, do you want to throw your hard-earned money down that bottomless pit to nowhere?
No, I didn’t think so.
As for the companies that are seeking a tax inversion to cut down their tax liabilities, this isn’t about patriotism. It’s business. And the money these companies don’t toss down the bottomless pit of government spending can be used for brilliant things such as reinvesting and growing their business, creating new jobs, paying higher wages to employees and even redistributing those funds to shareholders in the form of dividends.
Protecting your wealth isn’t unpatriotic, but responsible and wise — and it’s not unpatriotic to look outside the U.S. for these kinds of breaks. The American government is in a bind with debt and it can’t see a way out of it without the money it can grab from both corporations and individual citizens. We at the Sovereign Society remain steadfast in our resolve to find you the best asset protection avenues and investments that will keep your money in your pocket rather than Uncle Sam’s.