Taxes

Canada Wants Your Inversions. More Please, Says Finance Minister

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Foter / Creative Common

Lost amidst all the breast-beating and rending of garments last week over Burger King's "inversion"—its planned merger with Canada's Tim Hortons to lower its corporate tax burden—is that Canadian officials are quite pleased with the whole arrangement. American pundits may denounce "corporate deserters," but Canada's Finance Minister Jim Oliver is laying out the red carpet for any international investors interested in a relatively low-tax environment.

"Canada has moved to a highly competitive tax regime," Oliver announced in response to questions about the deal. "We moved corporate taxes since we've been in office from 20 percent to 15 percent and 11 percent for small companies. We believe this has been a constructive move that is designed to retain capital in this country, which results in more business expansion and more employment."

How about that? Instead of bitching and moaning about economic patriotism, Canadian officials see a need to compete with other jurisdictions to create an attractive environment for business.

And then Oliver went to Australia to see if any businesses there wanted to follow the lead of Burger King and Warren Buffett in moving their cash to the Great White North. At the Austraian Financial Review, John Kehoe wrote:

Canadian finance minister Joe Oliver has seized on Warren Buffett's $US3 billion ($3.2 billion) investment in the country's leading fast-food business, urging Australian investors to follow the billionaire's lead to take advantage of low corporate tax rates and pro-business policies.

Mr Buffett caused controversy in his home country of the United States last week after he pledged to help finance American icon Burger King's $US11.4 billion merger with Canadian coffee and doughnut chain Tim Hortons.

Burger King's new headquarters will be based in Ontario, partly because corporate tax in Canada is lower than the high 35 per cent federal rate in the US.

Specifically, the United States has the highest corporate tax rate among developed nations, according to the Tax Foundation. "They currently face the highest statutory corporate income tax rate in the world at 39.1 percent. This overall rate is a combination of our 35 percent federal rate and the average rate levied by U.S. states." The average across the 33 countries of the Organization for Economic Cooperation and Development is 25 percent.

Canada's overall corporate tax, including provincial rates, is just a hair higher than average at 26.1 percent. The U.S. isn't even trying to compete—unless whining is a strategy.

Tax Foundation

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  1. The U.S. isn’t even trying to compete?unless whining is a strategy.

    So you have seen Chuck Shumer’s position paper then?

  2. This is exactly what we could use–Canada poaching American businesses because of our ridiculous regulatory and tax structure. That’s more likely to force some reform here than anything else.

    1. Republicans and Democrats agree, fuck Canada?

      1. They’ll try to make it illegal or something stupid like that, but those measures rarely work. So it’ll either be loosen things up or continue to see businesses flee.

        I’m rather stunned that I’m typing that–flee the U.S.? Not very long ago, that would be laughable for most industries.

        1. As long as they don’t do something stupid, like bombing the Baldwins, I think they will be OK.

          1. In actuality, that would likely improve our relations.

          2. “We’ll lower our tax rates…as soon as Canada take Bieber back!”

        2. Pro Libertate|9.4.14 @ 2:28PM|#
          “They’ll try to make it illegal or something stupid like that,”…
          The Anti-Going-Out-of-Business Law?

        3. So many apparently American companies are incorporated in other countries that I think even stupid politicians might see what a disaster making it illegal would be.

          1. ROTFLMAO. You overestimate our politicians.

    2. Apaprently, its ok for progs to threaten to leave for Canada if McCain got elected. Corporations, not so much.

    3. Damnable KKKapitalist KKKanukastanis!
      I am sure Ted Cruz has something to do with this …

    4. PAY YOUR FAIR SHARE, KKKORPORASHUNS!

      1. PAY MY FAIR SHARE, TOO!

  3. “We believe this has been a constructive move that is designed to retain capital in this country, which results in more business expansion and more employment.”

    Nobody on the American Left would utter such heresy, much less move a bill through Congress to make it actually happen.

    1. I wonder why American progressives can be so much stupider than their counterparts in most other countries. Is it because we’re the only superpower so our country can do epically stupid things longer?

  4. But, but, corporations can deduct stuff like expenses!

  5. How long before “we” take over canada, to get “our” tax revenue back?

        1. ^^^ THIS!!!!!
          ELEVENTYMILLIONS TIMES OVER!

          THEY BURNT OUR WHITE HOUSE!
          THEY ARE THE ONES THAT DID IT!

          1. Please do it again. Get the Capitol too, since you’d already be in town.

  6. WOOO HELL YA GO CANADA

    The country with the next lowest corporate income tax rate is…Greece?

    1. Canada, the capitalist enclave? WTF? Am I taking crazy pills?

      1. Canada has almost always had a smaller government than America during the 20th century as % of GDP except during The Reign of Sauron Trudeau…don’t talk about him.

        Canada never implemented anything near as crazy as the New Deal. Bad statist ideas like central banking and medicare drifted north from America to Canada.

    2. Ireland is a lot better (and the EU is fucking livid about it, but it’s doing wonders for their economy) but Canada is a lot closer.

      Hell, even Mexico is better than the US (on this). Shame Canada is so cold.

      1. Shame Canada is so cold.

        but…poutine!

        1. If you live in L.A., you won’t have to go to Canada to get poutine soon…..

    3. Japan, actually. Which isn’t too surprising given how dynamic their economy has been for the last 20 years.

      1. I meant next lowest from Canada.

        1. Yes, I don’t know why I read it as next below the US.

  7. The US has the highest corporate income tax rate in the industrialized world.

    Gee, I wonder how much of what they have to pay gets passed on to the final peons consumers?

    1. None, according to the progs. Wealthy businessmen just take some more out of their gold filled swimming pools to pay it.

    2. I’ve actually seen people say that the taxes corporations don’t pay get paid by everyone else. Because fair share, or something.

    3. We peons get to enjoy MRAPS on our streets and the NSA in our communications.

  8. Fiscal federalism. I like it.

    Compete or die, biotches!

  9. Responding to incentives is unpatriotic.

    1. I have it on good authority (some prog who responded to my wife’s fb post this morning) that 2 things make you a good, patriotic American: 1) paying taxes and 2) voting (for democrats).

      1. The truly patriotic continue voting long after death. And the dead always vote Democrat.

    2. Acknowledging the incentives exist is unpatriotic.

  10. How can the United States compete on the global market when all of our corporate citizens are turncoats and other countries won’t play fair with their poaching corporate tax policies?

  11. “You want poutine with that?”

    Bet your ass I do.

      1. Once stood at an intersection. Three of the corners had Tim Hortons. I miss their soups.

  12. Taxing wealth creation may be the dumbest concept ever devised by man.

    1. They are either mindlessly stupid, or think that it acts like a vice tax on evil profits.

    2. Right up there with taxing energy.

  13. When the Canadians are making fun of you, you really are a rube. We have fallen so far that the Canadians, of the were supposed to have French culture, the American economy and the British work ethic but got American culture, French work ethic and the British economy, are rubbing our noses in it.

    Pathetic.

    1. Next, the Mexican president will be tweaking the US about its immi….oh, wait….never mind….

      1. “Poor Mexico, so far from God, so close to the United states”?

        1. Don’t feel too badly for them. They are about to become the newest medical mecca.

      2. Obama’s America

        It was supposed to have the British Legal System, the German economy, Latin American women and the Canadian Police Forces.

        Instead we have the Mexican economy, the British women, German Police forces and the Canadian legal system.

  14. So, like, when all the business moves to Canada, they’ll take over our entertainment industry. And then US citizens will only be able to see “Hockey Night In Canada”, “This Hour Has 22 Minutes” and “The Red Green Show” on TEEVEE.

    And radio with play nothing but sweet, sweet Rush, Triumph, Max Webster, Shriekback, Our Lady Peace….and Ann Murray (Nova Scotia represent, eh!), Shania Twain, and all them other Canadaian women singer types.

    Heaven. On. EARTH. I tell ya.

    Come on – we’re takin’ the snowmibiles up to the lake for some ice fishin’!

    1. Vancouver will finally be able to portray Vancouver rather than pretending to be every American city.

      PS: They’ve pretty much taken over our Entertainment industry already. We’ll officially it’s all been out-sourced there. But it’s just a small step…

  15. Didn’t I hear some idiot fuckstick yammering on about fairness issues recently?

    1. Was he in a tan suit?

  16. Before it hits the PM Links:

    Joan Rivers is dead

    1. Abe Vigoda, OTOH…

    2. Why is this worth posting on more than one thread?

      1. Well, Melissa Rivers is looking for work.

      2. She was more talented than Lou Reed?

        1. But not Sean Connery?

        2. “She was more talented than Lou Reed?”

          After he died, yeah.

  17. “We pay for the roads and education system that fuels corporate success, so you can’t desert to another country.”

    “But we give you millions of dollars in revenue, which you use to build roads and education. And the American people buy our products.”

    “Stop saying that! You have to pay your fair share!”

    “What if we just moved our entire operation overseas, so taxpayers don’t have to spend on dime for us?”

    “Fine then! 500 mom and pop and independent stores will take your place, and we’ll be the mainstreet economy the left has envisioned for so long!”

  18. So, if I understand the prog position it goes something like this. 1) America is only rich because we exploited literally every other country on earth. 2) We should not allow any of this wealth to leave, ever.

    1. As for 2)…. only in the form of AGW penance.

  19. It’s not just the rate. It’s the combination of the rate plus the insane worldwide, non-territorial taxation. The same stuff that means that if you’re a US citizen living in Canada making only Canadian income, you have to file US taxes and pay any extra.

    You could switch to territorial taxation, so that US companies only paid US taxes on US income (just like what foreign companies do on US income) and companies wouldn’t do inversions at all. They’d also bring money home from overseas. (Since right now, if they don’t bring profits home they can defer taxation.)

    1. damn it John,you beat me to it

  20. Warren Buffett’s $US3 billion ($3.2 billion) investment in the country’s leading fast-food business

    That’s impossible. Buffett repeatedly called for higher taxes on the wealthy, so I know this is just a made up story to smear him. I mean otherwise, he’d be a lying, hypocritical sack of partisan shit.

    1. And you can’t smear shit on Buffet…

      There’s no place left to smear it.

  21. it’s not just the high tax rate that is the problem,with all the deductions the actual rate is lower.Just like the middle class pays very low taxes due to deductions and things like child tax credits.The main thing[and progs who talk about the former never mention] is is that profits made in another country are taxed there and the U.S. wants to tax them here again.That’s like living in say,Ohio and working in West Virginia and paying state income taxes in both.That’s where the high rate kicks in

    1. While there are numerous timing differences, the principal deduction allowed that effects corp. taxes is depreciation. If you are making lots of capital investments, you can take accelerated depreciation and postpone taxes for years. Eventually it catches up to you.

  22. We live in strange times when Canada is more business friendly than the USA.

    OT: I think Tony was my Uber driver last night. Dude hit every gd talking point for the lunatic left in roughly this order (it was a 20 minute ride)

    – single payer
    – second amendment should only apply to muskets
    – teabaggers
    – Koch bros
    – Somalia
    – ROADZ
    – “‘real’ communism has never been tried

    At one point he started rambling about how in the ’60s the military created HIV (and possibly Ebola) to ‘cull the population because of global warming’. He did not like it when I asked what the world population was in the ’60s compared to today..

    1. Did the government install a camera in his head while he was previously institutionalized? Because I think this guy stopped me in the street in Santa Cruz to tell me the same shit.

    2. Hope you told him real communists don’t allow tips, it’s a bourgeois institution.

      1. Real Communists” call them bribes

    3. Wife and I had a bus tour in a Canadian city before O-care was rammed through congress.
      The driver spent the entire tour riffing on how wonderful the Cdn medical care was; he broke a finger and got it fixed the same day! And all us USers ought to back O-care!
      I sent an email to the company suggesting the drivers keep their politics to themselves. Got an email back apologizing and agreeing.

  23. I love the IRONY of the assholes here defending Paris-Hilton billionaires, crying an end to “Death Taxes” and “socialism”. They will fight for people who think them slaves… and fittingly, they do it for free. All for the delusion of one day being among them 🙁 sigh

    1. Noodlez|9.4.14 @ 5:10PM|#
      “I love the IRONY of the assholes here defending Paris-Hilton billionaires, crying an end to “Death Taxes” and “socialism”.”

      That’s not irony; that’s principles and honesty. More than slimeball lefty assholes could ever dream of.

  24. This is merely a collective action problem that can be solved by a world government.

    /prog

    1. That has already been tried. A lot of people didn’t want to go along with the program.

  25. It still boggles my mind that BK chose ONTARIO, of all places, to relocate. Ontario has worse public finances than even California!

    Alberta or Saskatchewan, I could understand, but Ontario?!

    When freakin’ ONTARIO is a more attractive tax jurisdiction, you KNOW you’ve got problems!

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