Have it your way, Warren.
The Oracle of Omaha and Obama tax policy, Warren Buffett, is reportedly helping finance Burger King’s acquisition of Canadian coffee chain and prominent ice hockey sponsor Tim Hortons. The move will allow BK to base itself out of Canada, potentially lowering the corporation’s U.S. tax burden. (The U.S.’s combined corporate tax rate, nearly 40 percent, is the highest of its democratic trading partners in Asia-Pacific, North America, and Western Europe.)
Burger King’s tax-saving tactic here, in which a U.S. company reincorporates outside the United States, is termed “inversion.”
The one thing that makes Buffett’s involvement with the deal “awk,” as the kids say: Buffett is a key ally of the Obama administration on tax issues. The “Buffett Rule,” for instance, a “tax on the wealthy” that Democrats have repeatedly tried to use to pay for the cost of legislation, is named for him. As a recent example, the provision is part of Sen. Elizabeth Warren’s student loan bill / shameless campaign document.
The Wall Street Journal reports:
Mr. Obama and Treasury Secretary Jacob Lew have spoken disparagingly about companies that use inversions. Mr. Obama in July called inversions an “unpatriotic tax loophole” and said “my attitude is I don’t care if it’s legal, it’s wrong.”
It even published a blog post titled “what are inversions and why should you care.”
Now that Mr. Buffett’s involvement in a possible inversion has been made public, will Mr. Obama and other Democrats take him to task?
Doubtful. White House Press Secretary Josh Earnest outmaneuvered Catherine Zeta-Jones’ character in “Entrapment” Monday with his circuitous dodge of criticizing Burger King, saying, “The president, again, speaking as a general matter, not as it relates to any specific transaction that’s being contemplated, doesn’t believe that a company simply switching their citizenship, filling out a few papers to switch their citizenship to avoid paying their fair share in U.S. taxes, is good policy.” That doesn’t mean men in Buffett’s position can’t take advantage of U.S. law. After all, he lives in the real world of finance, not the political and rhetorical world of American politics.
The BK-Tim Hortons deal was made official Tuesday morning. As the Washington Examiner noted, Buffett will provide $3 billion to help it along. The deal must now meet approval from Tim Hortons’ shareholders and U.S. and Canadian regulators.
