Posts filed under “Taxes and Policy”
The jury is out as to how much of the Burger King-Tim Horton merger is driven by the desire for tax savings. So far, the range seems to be modestly to not very much. The Los Angeles Times noted “Burger King’s overall effective tax rate in 2013 was 27.5%, according to its annual report. Tim Hortons’ effective tax rate for the same year was 26.8%.” That hardly seems motivation for a deal valued at almost $12 billion. More likely, creating a competitor to fast food’s No. 1, McDonald’s, was the driving force. The merger creates the world’s third-largest fast-food company.
Before we proceed, you might want to get a better understanding of the details of this transaction: Read my colleague Matt Levine’s excellent Warren Buffett Funds Global Donut-Burger Behemoth; for a good history of tax inversions, see this quick take.
As we have discussed, I find corporate inversions to be rather distasteful, and suggested several simple steps to make them less desirable to corporate America.
Fueling Road Spending with Federal Stimulus Sylvain Leduc and Dan Wilson FRBSF Economic Letter 2014-25 August 25, 2014 Highway spending in the United States between 2008 and 2011 was flat, despite the serious need for improvements and the big boost to state highway funds from the Recovery Act of 2009. A…Read More
Standard & Poor’s: Runaway Inequality Dampens GDP Growth, Leads to Boom/Bust Cycles and Discourages Trade, Investment and Hiring Inequality Also Dampens Social Mobility, Increases Political Pressure and Produces a Less Competitive Workforce Standard & Poor’s released a report on inequality today, concluding: Higher levels of income inequality increase political pressures, discouraging trade, investment, and hiring. Keynes…Read More
In sports, all great competitors know that they have a choice, even when confronted with daunting, insurmountable odds. They can lay down and let the larger, stronger opponent run up the score. Or they can find a way to compete, to make a game of it. A good loss is a dignified way to show…Read More
So you’re the world’s greatest trader®? Taxes will fix that. Barry Ritholtz Washington Post, July 27 2014 Imagine the following: You, the investor, believe you have an uncanny skill at picking stocks. You set up an online trading account and begin to buy and sell. As it turns out, you are quite good….Read More