Dozens of Businesses Move HQs Outside America Under Obama
On Tuesday, Burger King announced that it would spend some $11 billion to buy Tim Hortons Inc., a Canadian breakfast food chain, then merge Burger King into it, thereby turning what was once a major American company into a major Canadian one. As the Washington Post reports, Burger King would “move the company’s headquarters to Canada, where corporate taxes are significantly lower.”
This process, called inversion, has been occurring more and more often, despite the fascistic suggestion by President Obama that headquartering outside the United States represents a betrayal of God and country. Members of the Obama administration have taken to labeling business inversions a lack of “economic patriotism” – presumably under the assumption that to stay in America, cut jobs, and lose all profits in order to pay higher taxes represents a sort of higher moral value than moving one’s headquarters and continuing to pay millions of workers and reward consumers with better and cheaper products.
The Obama administration ought to note that the Soviets built a wall in the center of Berlin to keep their people and industries “economically patriotic.” Suggested measures to chain companies to the United States represent the same sort of government compulsion. And that sort of compulsion is a heavy club for a very slight increase in government revenue: an estimated $19 billion over 10 years.
Sadly, the Obama administration’s policies have driven more and more industries out of the country. Since 2008, more than two dozen companies have taken advantage of inversion. Here are seven other companies that have shifted production out of America in order to avoid our ridiculous regulatory schemes, or are considering the possibility of doing so:
Walgreens. Walgreens seriously considered inversion this month, but walked away from moving its headquarters to Europe after purchasing Alliance Boots GmbH. That decision drove Walgreens stock down. Walgreens’ board only decided against inversion, according to the Wall Street Journal, because “the board felt that the arrangement might not easily pass muster with the Internal Revenue Service and created the potential to be hung up in litigation for a decade.”
Pfizer. The pharmaceutical giant has been in on-again, off-again talks to buy Britain’s AstraZeneca in order to take part in a tax inversion. In May, Pfizer walked away from a deal to buy AstraZeneca for some $118 billion – but now, the deal is reportedly back on the table. According to Reuters five days ago:
Pfizer Chief Executive Ian Read has made clear he is still considering big deals to revive his firm's pipeline and cut its tax bill - something buying AstraZeneca would allow it to do via a so-called inversion that would shift its tax base to Britain.
Should AstraZeneca not become part of the deal, other companies, like GlaxoSmithKline, could.
Medtronic. Medtronic, a huge medical technology firm, has acquired Covidien, and will adopt Ireland as its legal headquarters. As the Wall Street Journal reports, here is the deal: “Medtronic agrees to call Ireland its legal home, and in return it gets to bring $1 billion or more into the U.S. without penalty.” The deal was for some $43 billion.
Tim Hortons. The company Burger King now seeks to buy participated in what is called a “naked inversion” itself in 2009. It started off as a Canadian company, according to the Congressional Research Service, but was bought by Wendy’s in 1995, then went independent in 2006.
Liberty Global. In 2013, Liberty Global bought Virgin Media for $23.3 billion. The merger, according to BBC, created “the second biggest pay-TV business after BSkyB” as well as “the world’s largest broadband company, with 25 million customers in 14 countries.” Most of the company’s revenue was earned in Europe. Richard Branson, previous owner of Virgin Media, became a 2 percent stakeholder in the new entity. Upon inverting, the tax rate for Liberty Global dropped to 21 percent, and the company was exempted from taxes for several years, according to the American Bar Association.
Chiquita Brands. Just this month, Chiquita participated in an inversion deal, buying Fyffes of Ireland and relocating its headquarters there. The company stated, “Chiquita remains committed to completing its transaction with Fyffes, which it believes will create a combined company that is better positioned to succeed in a highly competitive marketplace while driving strong performance and value for shareholders.”
Eaton. When Eaton bought Cooper Industries and headquartered in Ireland, Eaton saved approximately $160 million on taxes. The companies explained, “Incorporating as an Irish company provides significant global cash management flexibility and associated financial benefits.” As Bloomberg News noted:
Eaton’s effective tax rate for 2011 was 12.9 percent and its rate for 2010 was 9.5 percent, according to company filings. In 2011, lower taxes on its non-U.S. operations made up more than half of the difference between the company’s effective tax rate and the 35 percent top U.S. rate.
Overall, some 25 major companies have participated in tax inversions since President Obama took office. That trend will continue to accelerate as President Obama ratchets up the rhetoric and threatens harsher action against companies that dare to buck his high-tax priorities.
Ben Shapiro is Senior Editor-At-Large of Breitbart News and author of the new book, The People vs. Barack Obama: The Criminal Case Against The Obama Administration (Threshold Editions, June 10, 2014). He is also Editor-in-Chief of TruthRevolt.org. Follow Ben Shapiro on Twitter @benshapiro.