10 things to know about corporate inversions

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  • Kevin J. Kirkham Salt Lake City, UT
    Aug. 29, 2014 7:27 p.m.

    Schnee, the article only mentioned 2 things - Hopscotching and Stripping. The former simply allows foreign made profits on which local taxes were paid, to be sent to the US without paying US taxes. It simply avoids double taxation. No other country taxes their corporations on profits made in other countries. there is nothing wrong with it.

    Stripping seems shady, but its impact would be negligible. If a US subsidiary made $1,000,000 in profits, it would have to "borrow" about $20,000,000 from the home office where the interest payments would equal about $1,000,000. This means that the home office would have to cough up $20,000,000 and have it sit in the US where the home office couldn't touch it. I doubt Tim Horton's is going to be able to send BK 20x BK's profits to avoid paying US taxes. It only works where the US subsidiary is a LOT smaller than the foreign owner.

    Most people are basically fair and if the Dems and the IRS were fair, there wouldn't be a lot of effort into dodging taxes.

  • Happy Valley Heretic Orem, UT
    Aug. 29, 2014 4:27 p.m.

    So according to conservative only people pay taxes Not corporations because they pass it on to the people.

    So would conservatives only tax the citizens of this country and let the corporations keep all their profits so that they will let it trickle down to the consumer and employees? Yeah I think we've been trying that one and corporations have never kept their end of that disaster st. reagan promised, just a steady decline in the middle class and a growing gap of wealth.

    Lost, I'm aware of what I purchase and whenever possible my dollars go to local businesses that are Not corporate, even if your unaware that they exist.

  • Schnee Salt Lake City, UT
    Aug. 29, 2014 2:55 p.m.

    @Kevin J. Kirkham
    "they'll still be paying their taxes on American profits. "

    That's why I'm not that annoyed about the inversion itself, it's all the other loopholes (some of which are noted in the article) that will surely be exploited so that their American profit driven tax bill is made as low as possible that I take issue with.

  • Say No to BO Mapleton, UT
    Aug. 29, 2014 9:29 a.m.

    You may recall the young man who asked GOP presidential candidates, "How much of my money do you think I should be allowed to keep?"
    That is the crux here.
    Has a corrupt government and its collection agency, the IRS, overstepped its bounds? Is government too big, too expensive and too ineffective (see VA and immigration enforcement for examples) to have value to the average taxpayer? As we gas up this holiday and pay high motor fuel taxes to ride on bumpy roads, are we asking ourselves what government really does?
    Is it worth it?
    Expect more inversion to take place. And expect more individuals to shelter money and/or cheat on their taxes. People who get gouged by government are likely to protect their own interests.

  • lost in DC West Jordan, UT
    Aug. 29, 2014 9:10 a.m.

    most of those local shops you visit are also corporations - sorry to burst your bubble

    Midwest Mom,
    unfortunately the personal tax rates are higher and the health care choices are fewer. I see despite the close proximity, you remain in WI and have not emmigrated to Canada. yeah, what ARE you waiting for? no, please do not interpret that to imply I want you to leave.

  • Midwest Mom Soldiers Grove, WI
    Aug. 28, 2014 8:42 p.m.

    Wow. Lower corporate taxes and national health care. What are we waiting for?

  • Shimlau SAINT GEORGE, UT
    Aug. 28, 2014 6:32 p.m.

    One thing all of you posters need to realize, is that the only person who pays taxes is the final consumer. the person who eats that burger is the one who pays the tax. the person who burns that gasoline is the one who pays the tax. Everyone else just passes it on. Now all of you who are saying supply side economics doesn't work; what is your option? would it be socialism, communism? I don't see droves of people trying to get into Cuba, or China, or even Russia right now. So, tell me what your fully integrated financial system would look like, how would you keep the producers producing if they can't keep what they produce, or can't turn a profit. Socialism may work, in a beehive or ant hill!

  • Shaun Sandy, UT
    Aug. 28, 2014 5:12 p.m.

    @jsf. So how much will Burger King reduce the cost of a hamburger since they will certainly pass on the savings to their customers once they invert and start saving money?

  • Kevin J. Kirkham Salt Lake City, UT
    Aug. 28, 2014 5:03 p.m.

    I hear those on the left complain that BK won't be paying for American infrastructure via taxes which allowed them to earn those profits in the first place. That claim is designed for the "low information voter" because they'll still be paying their taxes on American profits. The libs claim about BK isn't being loyal Americans or patriotic. Loyalty/patriotism is a 2-way street. The government isn't being loyal the BK by wanting to tax money not earned in the US. It's abuse. BK is like an abused wife who discovers that other men (countries) don't abuse their spouses (local corporations) like BK's does. She is just packing her bags and leaving the abusive relationship as much as possible. Don't blame the victim. Blame the abuser in the White House.

    American citizens are giving up their citizenship in droves because the IRS requires US citizens to pay US taxes on the wages they earn overseas as legal residents and even make their non US spouses pay US taxes. Foreign banks don't even want to deal with US citizens due to the paperwork hassles. Again, don't blame the victim.

  • Happy Valley Heretic Orem, UT
    Aug. 28, 2014 4:28 p.m.

    Corporations will destroy America, and the republicans will gladly give it away for a donation to their campaign.

    O'well Can't say I've visited them in years and will continue to shop local whenever possible.

  • Dr. Thom Long Beach, CA
    Aug. 28, 2014 3:56 p.m.

    You haven't raised any new money,all you've done is literally out of thin air, you've created a debt obligation." Sounds a lot like Fiat Currency where the Fed just prints money to cover their obligation but doesn't back up the "new money" with hard assets such as gold or silver.

    What government doesn't understand is that corporations are based on the principles of improvise, overcome and adapt. Where as government is fixed, corporations are fluid and adjust to changes in the economy, taxes and employment which is why so many universities now hire a large percentage of instructors as contracted adjuncts. Not a real FT employee so you don't have to pay benefits such as medial or retirement.

    Aug. 28, 2014 2:44 p.m.

    The IRS and tax laws are a complete waste of resources! Private companies would much rather not have to pay accounting departments to manage their taxes, but they have to or the IRS will come confiscate its fees at the point of a gun.

    Private business doesn't even pay taxes anyway, they never have and they never will. Only people pay taxes. Any tax is a cost of doing business that must be recovered from its customers.

  • jsf Centerville, UT
    Aug. 28, 2014 11:39 a.m.

    A truth in advertising. Should apply to discussions about taxes.
    1) Burger King is still required to pay U.S. federal tax on all income earned in the U.S.
    2) Burger King will not be paying U.S. tax on income it earns out side the U.S.
    3) Warren Buffet (One of Obama's financiers) the guy who says you should pay more taxes is financing the deal.
    4) Corporations pass all income tax expense through to their customers. Raise corporate taxes and the price it sells its products for rises. In the case of Burger King, every hamburger you by includes the tax costs. If the tax costs cannot be passed on to the consumer the corporation ceases being in business. Corporate tax is governments way of hiding the tax they charge the individual by including it in the cost of everything you buy.

  • Redshirt1701 Deep Space 9, Ut
    Aug. 28, 2014 11:34 a.m.

    How could this be? The liberals tell me that companies only leave the US to get cheaper labor, now we find out that BK is escaping high tax rates.

    I wish the liberals could have a consistent answer for why businesses leave the US. But there is some home, maybe some of them will realize that it all come down to the Government becoming overbearing on the businesses.

  • lost in DC West Jordan, UT
    Aug. 28, 2014 8:40 a.m.

    I think BO was actually on board to reform US tax laws, but harry and the radical dems in the senate are too busy playing class warfare to actually do something good.

    Oh please!
    Most mom and pops pay taxes at the personal rates because they operate as sole proprietorships, partnerships, LLCs, or S-corps. Liberals want them to pay higher taxes anyway because they are so wealthy, regardless of the benefit they have on our society and the fact that they already pay the lion’s share of taxes. Call it envy.

    Doesn’t matter if it is historically low, what matters is how it compares to the rest of the world. If your car now has an automatic transmission, whereas before it only had a 3 on the tree, your car is better than it was; but if the neighbor has a 6 speed auto, AC, CD player, 44 MPG hybrid, and can tow 10,000 pounds, your neighbor’s car is better than yours!

    Decreasing the tax rates greatly INCREASED federal revenues in the 1960s, also in the 1980s. sorry you are so ill-informed.

    Individuals can renounce US citizenship and move elsewhere. that option is not limited to corporations.

  • Baron Scarpia Logan, UT
    Aug. 28, 2014 6:15 a.m.

    As Labor Day draws near, let's think about how American laborers "are people" and how corporations "are people too" (thanks, Mitt), and yet, corporations have significantly more rights and privileges than laborers with the ability to invert abroad (that is, renounce American citizenship), stay in America to enjoy its quality of life and privileges, but avoid paying taxes like the rest of us laborers.

    What bothers me the most is how corporations have Congress to thank for setting laws that allow them to invert, but continue to rely on the American government to protect them from copyright and patent stealing, guarding oil interests in the Mideast, the court system, subsidies for water, transportation, energy, etc. ... they don't want to pay for these privileges, but they can still use them because they're here.

  • GaryO Virginia Beach, VA
    Aug. 28, 2014 6:10 a.m.

    Hey DNSubscriber -

    "Me? I say cut the spending, and reduce the tax rates which will increase revenue."

    I know . . . It's the same UNWORKABLE mantra.

    Decreasing personal tax rates, especially for the highest earners, has proven consistently to DECREASE revenues, not increase them, everything else being the same.

    Yet, in spite of all the actual EVIDENCE refuting what they say, "Conservatives" just keep on making the same unsupportable claims.

    "Conservatives" inevitably point to the Reagan administration as support for their false claims.

    Yes, Reagan reduced taxes for high earners, and yes revenue increased, but that was due to a completely unrelated phenomenon. The price of world oil plummeted during the Reagan administration (no thanks to Reagan) to less than 1/3 of what it had been during the Carter administration. That spurred the economy, increased profits, and increased tax revenue . . . NOT Reagan's policies.

    "Conservatives" say trickle-down economics creates jobs.

    WHERE are the jobs? And WHERE is the immense revenue we are supposed to be generating through our relatively low personal taxes high earners enjoy?

    Sorry DNSubscriber, but the facts to NOT support your claims.

  • Schnee Salt Lake City, UT
    Aug. 27, 2014 10:46 p.m.

    The inversion thing is fine, it's all that other stuff mentioned in the piece describing exploitive loopholes that prevent them from paying much of their taxes on the US holdings, that's what the problem is.

  • DN Subscriber Cottonwood Heights, UT
    Aug. 27, 2014 10:41 p.m.

    I want everyone who complains about corporations or individuals not "paying their fair share" to prove their sincerity.

    Those folks you are complaining about are just obeying the (very convoluted) laws on the books and have lots of people working hard to pay the absolute minimum taxes they must. Otherwise, the would be thrown in jail.

    Now, critics, we assume you likewise obey the law, but claim all your deductions and report all your income and file for refundable tax credits, exactly the same stuff you are complaining about the corporations. Since you think they should voluntarily subject themselves to voluntarily paying more than the law requires, you need to do likewise. In fact, it is easy, you can send a check to the Bureau of the Fiscal Service, P. O. Box 2188,
    Parkersburg, WV 26106.

    Please report back how much you paid, and your future comments will be weighed according to your willingness to do as you say.

    Me? I say cut the spending, and reduce the tax rates which will increase revenue.

  • GaryO Virginia Beach, VA
    Aug. 27, 2014 9:36 p.m.

    Hey Mountanman -

    "Talk about government greed!"

    The effective corporate tax rate in this nation is very low historically. Look it up. And NO, not on some lying Right Wing Web site.

    And its "government greed" that pays the bills. "Conservatives" keep complaining about paying down the debt, but the debt will never be paid down without revenue.

    And where does revenue come from? It comes from taxes. "Conservatives" consistently oppose true fiscal Conservatism.

    Many Democrats believe the tax code should be restructured. The highest individual tax bracket should be bumped way back up to where it was when the nation collected enough revenue to pay its debts. And yes, we should look at corporate tax code.

    Of course, Republican politicos should just keep their hands off of it, since they will inevitably see to it that only the wealthiest in this nation will benefit at the expense of everyone else.

    It's what they do.

  • Oregonian Sherwood, OR
    Aug. 27, 2014 9:35 p.m.

    Burger King is just doing what progressives are promoting: Open borders. They are just economic refugees wanting a better life up North.

  • Sven Morgan, UT
    Aug. 27, 2014 7:04 p.m.

    With operations moving to Canada, Burger King's federal tax rate will be cut nearly in half. This means they can open more Burger King and Tim Horton chains, and create more jobs. Imagine that, lower tax rates incentivize businesses to hire more people...who would've thunk it?

    Good for Burger King...and Tim Hortons!

  • Say No to BO Mapleton, UT
    Aug. 27, 2014 2:06 p.m.

    Mountainman is correct. BK will still pay taxes.
    The big advantage of inversion is that BK will no longer have to pay taxes on foreign operations that have nothing to do with their US operations. Only our IRS is able to get away with that.
    Many corporations are parking their money overseas in protest over our greedy tax laws.
    Libs won't explain that to you.

  • OneWifeOnly San Diego, CA
    Aug. 27, 2014 1:38 p.m.

    Corporations are people. I'm a person (but not a corporation). How can I "invert" myself offshore while living in the US in my wonderful neighborhood with great schools, first responders, courts and infrastructure? Oh, and I'd like to keep collecting welfare from the US government too.

  • Mountanman Hayden, ID
    Aug. 27, 2014 1:10 p.m.

    Relax liberals, Burger King will pay taxes in the US even though the US has the highest corporate taxes in the world! Why would anybody with a brain start a business in America today? Talk about government greed!

  • Oh, please! Saint George, UT
    Aug. 27, 2014 1:04 p.m.

    Mega corporations aside...the large tax rate hurts thousands of small corporations, some are the mom-and-pop variety. Many of these are the people/families who have/had a multi-generational, positive impact in our cities and towns. It's sad that the small guys who hire local people are pushed out of business by federal government tax rates, burdensome paperwork and the like. Obama and his ilk have had plenty of time to decrease tax rates for all not just the select few.

    Interesting that Obama and Democrats would question the patriotism of corporations seeking to move headquarters outside the US. Conversely, I would certainly QUESTION THE PATRIOTISM OF OBAMA, his wife, and his never-worked-a-day-in-the-public-sector (a little exaggeration, but not much) "advisors."

  • Say No to BO Mapleton, UT
    Aug. 27, 2014 12:11 p.m.

    We all must realize that it costs money to have the likes of Henry Waxman and Elizabeth Warren grouse about greed.
    The most laughable part is that politicians try to convince us that big government is good and we should all pay up so it can get bigger.
    Give me a break!

  • The Wraith Kaysville, UT
    Aug. 27, 2014 11:38 a.m.

    "GE pays no tax as it is a pal of Obama"

    Yup before Obama came into office GE paid loads of taxes and then after he went out of his way to cut a special deal for that single corporation.

    In reality big companies have been getting away with this type of thing for decades.

  • What in Tucket? Provo, UT
    Aug. 27, 2014 10:49 a.m.

    Romney had a minuscule amount offshore. Miore than $17 trillion of US business is now overses because we have the highest corporate tax rate. 40% vs 25% of socialist EU nations. GE pays no tax as it is a pal of Obama. Crony capitalism is the name. We also have excessive red tape. Business needs to be monitored, but bureaucrats keep adding rules and regulations, it's what they do. So unless you put in sunset laws regulations just keep adding up.

  • FT salt lake city, UT
    Aug. 27, 2014 10:22 a.m.

    The US has a lot of leverage with corporations. This is the richest market in the world and all corporations want to sell their goods and services to us. In addition, we're still providing a safe haven for them to operate in. Time for our leaders to devise tax policies that leverage our markets and capital.

  • Third try screen name Mapleton, UT
    Aug. 27, 2014 10:02 a.m.

    If you have the choice of paying higher taxes or lower taxes, which would you choose.
    The downside of globalism is that you have choices. Do you pay workers $50 a day or $50 a month? Factor in quality and transportation costs and you make a logical decision.
    The Romneys and the Kennedys both kept money off-shore to avoid taxes. I seem to recall an old economics book that explained how people act in their self-interest.
    It never mentioned the unseen heavy hand of a corrupt IRS though.

  • Irony Guy Bountiful, Utah
    Aug. 27, 2014 9:32 a.m.

    It wouldn't matter how low the tax rates are. US companies are filled with accountant/lawyers who will forever come up with more and more ingenious ways to dodge any tax obligation.
    GE pays no income tax at all. No need to invert. They're just smarter and less willing to pay their way than any other corporation.