Tags: Barack Obama | Buffett | Burger King | tax | WSJ | Journal

WSJ: Buffett Makes Tax Whopper on Burger King Deal

Image: WSJ: Buffett Makes Tax Whopper on Burger King Deal (Yoshikazu Tsuno/Getty Images)

Wednesday, 27 Aug 2014 06:40 AM

By Elliot Jager

Billionaire Warren Buffett may be an ally of President Barack Obama's quest to raise taxes on the wealthiest Americans, but his Berkshire Hathaway conglomerate is financing Burger King Worldwide's relocation to Canada, where business taxes are 10 percent less than in the United States, The Wall Street Journal  editorialized.

Burger King is buying the Ontario-based multinational casual restaurant chain Tim Hortons for roughly $11 billion and moving its headquarters to Canada. Berkshire Hathaway will supply $3 billion in preferred shares to facilitate the investment.

Burger King says it will continue to pay taxes on its U.S. earnings and that its purpose in relocating is to build its burger — and Hortons coffee and doughnut— business abroad, the Journal editorial board wrote.

"The real tax gain for Burger King is that by choosing a legal address in Canada it can avoid Washington's obsession with taxing overseas profits at American tax rates," according to the Journal editorial.

While Democratic Sen. Sherrod Brown from Ohio is calling for a boycott of Burger King, Buffett's involvement will make it harder for Democrats to criticize the deal because they have cited his advice on taxes as guiding their policies, according to the editorial. Moreover, the criticisms are unfair, according to the Journal.

Canada has repeatedly cut taxes since 2000, leaving its federal corporate rate at 15 percent, down from 28 percent. While local taxes add on about another 12 percent, that still leaves the combined rate north of the border "more than 10 percentage points below the overall U.S. rate," the Journal wrote.

All the while, in the absence of congressional action, the Obama administration is exploring approaches to unilaterally raise corporate taxes, the Journal wrote.

Buffett may claim that the prospect of higher taxes does not put off investors if they can make a profit. He's written that, "People invest to make money, and potential taxes have never scared them off." Nevertheless, when it comes to his own investment strategy, Buffett has sought to minimize his investors' tax burden and termed paying more than absolutely necessary "dumb," the Journal says.

"That word also applies to America's corporate tax code, the reigning world champion in punishing investment and discouraging job creation," the Journal editorial board wrote.

Related Stories:

© 2015 Newsmax. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved