Over at Business Insider, Joe Weisenthal discusses the political implications of Burger King’s purchase of Canadian donut company Tim Hortons. The home of the whopper and the … home of the maple bear claw (or whatever) will merge and Burger King will, for tax purposes, become a Canadian company. This is called a “tax inversion,” and American companies have been partaking in such moves to avoid America’s punitively high corporate tax rates. Here’s Jon Hartley explaining why it makes sense for Burger King to abandon America for the Great White North:
Canada’s corporate tax rate in Ontario of 26.5% (the federal rate of 15% plus Ontario’s provincial corporate tax rate of 11.5%) is considerably favorable to the American corporate tax rate of 35% thanks in large part to the conservative Canadian government led by Stephen Harper. The Harper government lowered the federal tax rate to 15% in 2012 down originally from 28% since it took office in 2006.
Weisenthal thinks that BK’s move plays right into the hands of the Democrats:
the news gives Democrats another talking point. The potential departure of an iconic American company because of “corporate greed” will be trotted out on the campaign trail.
Now, this is undoubtedly the narrative that the media will go with, because the media, writ large,* believes that corporations (and the super-wealthy, though not the modestly wealthy because many upper-level journos are in the modestly wealthy bracket) should be paying higher taxes. So they’ll be more than happy to parrot Democratic talking points about greedy corporations and such.
But the Republicans have a chance to lay out a winning message. And that message is this: Canada Sucks.