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Warren Buffet's Whopper

Mike

Well-known member
Billionaire investor Warren Buffett on Thursday again defended Burger King’s purchase of Canadian chain Tim Hortons, a deal criticized by many as an inversion plan by the fast food company to avoid paying U.S. taxes.

Berkshire Hathaway, the conglomerate where Buffett serves as president and CEO, invested $3 billion to help finance the deal. Appearing on MSNBC, Buffett insisted that the purchase was not a tax dodge.

“It is a corporate inversion and many corporate inversions are tax driven,” he conceded. But Buffett insisted that the more than $11 billion Burger King paid for Tim Hortons significantly outweighed any tax relief the company will receive by relocating to Canada. Critics have insisted that the purchase was largely motivated by the company’s desire to avoid paying high corporate taxes in the U.S.

Buffett cited statistics that the highest amount of federal tax the company has paid in the last three years is $30 million. “If anybody would be paying $11.8 billion to save $30 million of federal income tax, they did not go to the math class I went to,” he quipped.

He also reiterated a point he had made several weeks ago that Burger King is significantly smaller than Tim Hortons. “It’s a case of the larger company being in Canada,” he said. “Tim Hortons earns twice as much money as Burger King.”

Buffett over the years has emerged as an ally for President Barack Obama’s message of “economic patriotism” and tax fairness, urging higher rates for individuals and companies to pay their fair share. Buffett has made headlines for advocating for cracking down on millionaires who pay taxes according to the lower capital gains rate, noting that his secretary has paid higher rates than him. The president has often touted the so-called Buffett Rule named after the investor — a proposal that would ensure millionaires pay a minimum tax rate at least equal to that of middle-class people.


Read more: http://www.politico.com/story/2014/09/warren-buffett-burger-king-111092.html#ixzz3DhXOvTFj
 

Mike

Well-known member
hypocritexposer said:
I agree with him and as stated before, they will now be paying tax on Tim Horton's earnings, as they expand in the US.

The tax will be more overall, but not percentage wise.
 

hypocritexposer

Well-known member
Mike said:
hypocritexposer said:
I agree with him and as stated before, they will now be paying tax on Tim Horton's earnings, as they expand in the US.

The tax will be more overall, but not percentage wise.

yep and as far as federal tax revenue goes, % doesn't mean much, it is the aggregate that counts.

lower the % and increase the tax base...

and that is why companies are moving, or expanding in Canada.
 

Mike

Well-known member
hypocritexposer said:
Mike said:
hypocritexposer said:
I agree with him and as stated before, they will now be paying tax on Tim Horton's earnings, as they expand in the US.

The tax will be more overall, but not percentage wise.

yep and as far as federal tax revenue goes, % doesn't mean much, it is the aggregate that counts.

lower the % and increase the tax base...

and that is why companies are moving, or expanding in Canada.

A percentage is a percentage. Depends on how creative the accountants are.
 

hypocritexposer

Well-known member
yes, but if you significantly increase the number of dollars taxed at a lower rate, you will increase tax revenue

The US corporate tax rate is scaring business away...if they were to lower it, they would increase revenue.

BK/Tims is a different situation than just picking up and leaving the Country. They will still have their US operations/revenue that they will be paying tax on.

The domestic expansion will increase revenue, thus tax, and will also increase job numbers, increasing personal income tax revenue.

What BK is avoiding.... is taxes paid on profits in other Countries.

If they were to keep head offices in the US, they would have to pay tax on Tim's profits in Canada.

A revenue that the US never had anyway, so really, they are not losing anything.

The US is the only Country I know of that operates in this fashion, where they tax foreign profits, of US based companies.
 
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