by Mitch Kokai
Senior Political Analyst, John Locke Foundation
What, you hadn’t heard that Warren Buffett is an economic traitor? Of course, he isn’t. But that’s the label the Obama administration has been applying to companies practicing a tactic known as a corporate inversion.
Moving its official incorporation location from the United States to another country — almost any other country — allows a corporation to avoid the overly high American corporate tax rate.
It must have been a bitter moment for President Barack Obama when he got the news that his favorite economic guru not only doesn’t like paying taxes but hates America.
Warren Buffett, whose eponymous rule was a staple of Obama’s 2012 reelection campaign, is underwriting Burger King’s proposed move to Canada that the left is denouncing as practically the most dastardly plot since the Rosenbergs helped the Soviets get the atomic bomb.
Burger King is acquiring the Canadian coffee and doughnuts chain Tim Hortons in what is called a “corporate inversion.” At least that’s the technical term for it. Obama and the left prefer to call it by names usually reserved for spies and AWOL soldiers before they get a last cigarette and a blindfold.
The practice of corporate inversion, or relocating overseas to avoid the burden of U.S. taxes, offends the president’s sense of “economic patriotism,” as he put it in a speech a few weeks ago. He referred to firms that make this move as “corporate deserters” taking advantage of an “unpatriotic tax loophole.” …
… In most other contexts, Obama is a proud “citizen of the world.”
Except when it come to taxing businesses. Then, he is transformed into the Giuseppe Garibaldi of American progressivism. For him, patriotism is the last refuge of the taxman.
It should give him and his allies pause that Canada — boring, socialistic Canada — is a tax haven compared to the United States. How did that happen?
We now have a corporate tax system that combines the highest nominal rate in the developed world, at 35 percent, with loopholes that benefit special interests and the politically connected. Two Obama-appointed commissions have suggested major reform.