With recent news about Burger King and medical device manufacturer Medtronic relocating their headquarters outside of the United States to avoid high corporate taxes, the subject of corporate inversions has been a big topic of discussion in the media. While President Obama and the Treasury Department condemn these moves and construct roadblocks to prevent inversions, they fail to see the reasons that drive these corporations overseas.
Tagged: Burger King
It’s no mystery why American companies have stockpiled over $2 trillion of overseas earnings in foreign bank accounts. If they bring it to the United States, the IRS would grab 35% of it. That’s the US corporate tax rate – the highest in the developed world, double the average in EU nations.
One of the underappreciated aspects of the current debate over corporate tax inversions is how it represents not just an opportunity for some progressive populism, but is just another aspect of the same view which motivates the left’s general disgust with Uber and other members of the sharing economy.
Political rhetoric in the United States, particularly on the right, has a strong tendency to focus on the incomparable economic freedom of Americans and American businesses. They portray the rest of the world as more socialistic and the American system as the closest thing to a free market economy operating in the world. Yet that is far from the truth. In fact, America is swiftly being supplanted as a preferred place of business by many other countries in the rich world.