The U.S. administration is in an uproar, because Burger King executives want to have it their way where corporate taxes are concerned.
Burger King announced last week that it would buy a Canadian donut shop. In the process, the fast food giant plans to move its burger empire north of the U.S. border.
Many pundits are expressing their outrage and shock that the fast food chain would essentially renounce its U.S. citizenship. Those upset need to face reality: With an exorbitant corporate tax rate and a rapidly mobile and global economy, this sort of thing is bound to happen more often.
When national, state, and city-level tax rates are combined, the effective U.S. corporate tax rate is one of the highest in the world at 40 percent. By moving its burger business north, Burger King will enjoy Canada’s much lower effective tax rate of 26 percent.
It isn’t rocket science that business is in the business of making money. And business that is able will move where they can keep more of what they earn.
Maybe those who are shocked and outraged should start thinking about ways in which the U.S. can lower its effective corporate tax rate.