Surprisingly, Canada is the BEST major country when it comes to total corporate tax burden — by a LOT. Hence Burger King’s decision to relocate to the Frozen North. See the short article and tax table below. And keep in mind that total CALIFORNIA tax costs increase this tax differential substantially for our Golden State businesses.
Obama’s response to Burger King’s move (a move because of our punitively high U.S. tax structure) was predictable — further restrictions on American companies leaving. It’s the usual thuggish response of a Chicago community organizer against those who do not bend to his will.
Well, I have a wry suggestion: Obama’s plan to keep companies from moving to low-tax Canada should include installing along our Canadian border a 3,000 miles long string of machine gun towers and mine fields (a la East Germany) to keep Ahmericans in AMERICA (well, wherever) — Land of the Free!
Think about it — it would be the first effective Obama jobs stimulus program!
NOTE TO OBAMA — I’m KIDDING, you BLOCKHEAD!
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Who-d a-thunk it? Total tax costs in Canada are 46.4% lower than in the US, and Burger King wants to move there?
In a post titled at Business Insider (“Canada Has The Most Business-Friendly Tax Policy In The World“) Myles Udland points to a recent KMPG special tax report “Competitive Alternatives” that measures the Total Tax Index for the ten countries in the table above. KMPG’s Total Tax Index measures all taxes levied on corporations including income taxes, property taxes, capital taxes, sales taxes, miscellaneous local business taxes, and statutory labor costs (statutory plan costs and other payroll-based taxes). According to KMPG:
Among the countries studied, Canada has the lowest Total Tax Index (TTI) at 53.6. In other words, total tax costs in Canada are 46.4 percent lower than in the United States, which has a TTI of 100.0 and represents the benchmark against which all locations are scored.
Should it be any surprise then that Canada may be the new home of Burger King? From the New York Times:
The restaurant operator said on Sunday that it was in talks to buy Tim Hortons, the Canadian doughnut-and-coffee chain, in a potential deal that would create one of the world’s biggest fast-food businesses.
If completed, the deal would mean Burger King’s corporate headquarters would move to Canada, raising the specter of yet another American company switching its national citizenship to lower its tax bill.
Comments 6
It’s much worse than that.
The US taxes corporations’ GLOBAL earnings, while Canada like almost every other civilized nation taxes earnings under a territorial system. The same thing happens to individuals where the US is unique among Western nations by taxing the earnings of its citizens even when they don’t live or work in the US! So record numbers of corporations and individuals are rightly fleeing the punitive US tax regime.
And Canada’s free (but rationed) health care is included in that tax burden, while the higher US taxes don’t include health care except for the very poor and the old.
See: Tea Party Nation, eh! (1) and (2)
Author
Great stuff, W.C. But I hope you’ll update your Canook stats from the “current” 2011 set on your blog. I’d like to use ’em myself!
Sure!
Canada’s budget deficit is 1% of GDP. The US budget deficit is 3% and projected to get much worse in a few years (plus the US deficit is understated because much of our debt is owned by the free-money-printing Federal Reserve, which gives all the interest on that debt back to the Treasury!). If the Fed was ever able to shrink its balance sheet back to normal size, and then raise interest rates back to normal levels, the US deficit would absolutely explode.
According to many that inhabit this blog, even a hint of “socialized” heath care should have bankrupted Canada decades ago. Perhaps the real reason Canada is doing so well is that they don’t let lobbyists from the banking industry dictate bad policy. Question: Why do conservatives (in general) oppose re-instatement of Glass Steagall?
Paul Therrio,
Who said that?
If you’re ruthless enough with price controls and rationing, free health care is quite affordable.
Author
Paul Therrio — Yes, the banks work better in Canada. Starting with the fact that home loans are PERSONAL loans, with the borrower responsible for repayment. In most of the U.S., such loans are NON-RECOURSE loans — so home speculation is encouraged, especially in California.
Moreover, Canada does not require its banks to make loans to people who likely can’t make the payments. What a concept!
As to why Canada is not bankrupt from health care, two reasons:
1. They ration and delay patient care.
2. Their military budget is 3 percent of the overall budget. Ours is at least 20%.