When people stop coming to a restaurant, you suspect there’s something wrong with the food. When people stop watching a TV show, you assume there’s something wrong with the story. But when businesses start going through all the trouble of pulling up stakes in America and moving to other countries, our ruling class don’t think there’s anything wrong with the environment for businesses. Oh no, the problem must be that those business are bad.
The political favoritism that riddles the U.S. corporate tax code means that well-connected firms do not pay that world-leading top rate, and the worldwide ambition of the IRS — the United States is one of a tiny handful of nations, including North Korea and Zimbabwe, that purport to tax firms’ earnings outside of their jurisdictions — is tempered by the generous treatment of deferred foreign income. Which is to say, given the tradeoffs in play, most U.S. firms choose to be legally incorporated in the United States, because the tax advantages of incorporating elsewhere do not — at this moment — outweigh such practical considerations as access to U.S. courts.
But of course the Left wants to change that equation. There are trillions of dollars in U.S. corporate earnings parked overseas, and progressives want the government to shove its greedy snout all up in that, denouncing “corporate cash hoarders” and blaming un-repatriated corporate earnings for everything from the weak job market to chronic halitosis. Harebrained schemes for putting that corporate cash in government coffers abound. So the current balance could quite easily be tipped.
Oh, it’s tipping all right. More on the insanity of the tax code here:
The U.S., unlike most developed-world governments, insists on taxing the global income of its citizens and corporations that have U.S. headquarters. And because the U.S. has some of the highest tax rates in the world, especially on corporate income, this amounts to demanding that everyone who got their start here owes us taxes, forever, on anything they earn abroad.
This is a great deal for the U.S. government, which gets to collect income tax even though it’s not providing the companies sewers or roads or courts or no-knock raids on their abodes. On the other hand, it’s not a very good deal for said citizens and corporations, especially because our government has made increasingly obnoxious demands on foreign institutions to help them collect that tax. Both private citizens and corporations who have a lot of income abroad are deciding that they’d rather renounce their ties to the U.S. than deal with the expense and hassle of letting it tap into income that they have earned using some other country’s roads and sewers and police protection.
Far from being mad at Burger King, I am delighted for anyone to do what they can to cut the funds going to our corrupt, wasteful, and stupid government. They less money the feds have, the less they can spend on computers to monitor our emails and taxidermy to make Harry Reid look life-like.
I used to think that if you betrayed the government of America, you were betraying the nation of America. But I don’t think that way anymore. And I have Barack Obama to thank for setting me free from that narrow, limited mindset.
America is still a great nation. It’s great because the idea that birthed it is a great idea, and that idea still lives in the heart of a lot of great people. But a government that can drive the flame-broiled goodness of Burger King over the border to Canada is no friend of that idea.
Hopefully, one day, things will change and Burger King will return. But until that day, I will hold my head high with American pride every time I plow through a delicious Original Chicken Sandwich. (Dear Burger King, I am willing to accept payment for advertising in Canadian dollars. Or french fries.)