Could Broadway pull a Burger King?

I knew there was a reason I was a McDonald’s fan.

Burger King made a Whopper-sized announcement this week that they are buying Tim Hortons, another processed food parts chain, and moving their headquarters to Canada . . . eh?

Why this major business move?

Simple.  Why else do big corporations (and sometimes small corporations, and sometimes super wealthy people) move?

To get further away from the long arm of the IRS.  Yep, Burger King, one of the most successful American food franchises, which earned $75.1 (!) million last quarter, is trading in their US passport to save taxes.

There’s a legal loophole that allows corporations to do what BK is doing (technically called a “tax inversion”), although Obama is swearing to try to close it and close it quick (although long time supporter Warren Buffett looks like he stabbed the Pres in the back by backing the BK move).

I’m an entrepreneur, and a capitalist, so I understand the instinct of the modern day CEO whose sole mission is, “To make as much money for my shareholders as legally possible.”  That’s really it, in a nutshell, right?  So part of me can’t blame 34 year old BK Boss Dan Schwartz, but there’s something about this that just seems plain wrong.  Because it gets to the question of, “When is enough . . . enough?”  You just made $75.1 million in a quarter, buddy.  You really need more?

I know, I know. You’re saving for a rainy day.  And again, if there’s a legal way to save money, why shouldn’t you do it?

I’ll even admit, when I get my tax bill every year, I wonder if I should move my corporate offices to New Jersey, or just move my house to New Jersey, to save on both the corporate city tax and the personal city tax.

And every time I consider it, I squash it, because it just doesn’t make sense for my business.

Unfortunately, the city, the state, and the federal government know this about Broadway Producers.  It’s why theater producers and more importantly, Broadway investors, don’t get any special breaks for what they do . . . because governments know that Broadway can’t go anywhere else but the center of NYC.  So they don’t have to make any concessions to tax codes . . . while they bend tax legislation for any movie that comes along (because movies can always got to another state, or yes, Canada).

So our taxes remain high, as billion dollar public companies skirt rules left and right.  And we, the small business men and women of this country, continue to pay their bills.

Burger King was never a first choice of mine.  But now it will never be a choice of mine.

Because as a Producer, as a Business Owner, and yeah, even as a CEO of a publicly traded company, I do believe there is such a thing as going too far to make money.

 

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Comments
  • louann strothmann says:

    I agree 100% . Thanks for having the courage to say it!

  • Michael Hennessey says:

    Off shore, across the boarder… our country is made for the haves.Keep on getting on!!!

  • But with money fast becoming (if not already) the ends to all human endeavor. don’t the ends justify the means. Just ask Machiavelli.

  • Here, here. There are not enough business owners brave enough to ask the question of “when is enough, enough.” I whole heartedly agree this sentiment.

  • Marshall says:

    And if we’d get rid of the corporate income tax altogether (stockholders already pay taxes on earnings, isn’t it double taxation?) BK would be back, back, back in the US(S)A in (pardon the phrase) a New York minute. Then watch the economy soar! Which leads to more people going to New York to see B’way shows! AND pay ungodly high prices on everything. 🙂

  • Jonathan Mann says:

    I agree with you. The federal government should equally tax all income of any company doing business in America and do away with loopholes that allow them to evade it whether they are HQd here or abroad. The greed of corporations’ leadership is endless and damaging to the health and well being of our citizens. But the only way for the political will to do so to arise will be when we the people force big campaign finance reform — the root cause behind politician’s refusal to crack down on corporate welfare and ridiculous tax breaks and advantages that sap resources and imperil the ability for our citizens to make a living and have a place to live. There is only so much pie and the fat cats are currently fit to burst but not slowing down one bit!

  • Randy says:

    The “when is enough enough?” problem flows from a single word…MAXIMIZE. As you stated only slightly differently, these CEOs (and boards of directors) see as their mission a need to not merely be profitable, but to “maximize profits.” That sits along a very blurry, very fine line right next to greed.

  • George says:

    Not really a BK fan (Mickey D’s still my fast/cheap/tasty poison) and I have always thought their advertising… “creepy!”

    But that’s irrelevant!

    A companys #1 responsiblity is to their INvestors (read Producer’s #1 – sometimes unacknowledged – Responsibility) and IF BK did the analysis and found that moving their Base of Operations to Canada to minimize the money that the GOVERNMENT confiscates from the “Business” that means I – as an Invester – stand a better chance to make a better return and I – as a customer – stand a better chance at getting a quality product at the lowest price.

    Why is that so hard for people to understand?

    Well, because they were raised as socialists… raised by unionize teachers that their main purpose in Life is to feel guilty about making $$$ and the only way to atone for that is the pay taxes… so that the All Knowling Politicians can do better things that YOU could do with it… like helping out all the “poor” people (but always starting with themsleves…) So that is why a lot of people will never really understand that Money is Freedom to do what you want and Business is how you make that Freedom sustainable.

    So – no – the fact that a “company” – which is double-taxed because everyone IN the company is already paying tax… as are the investors… as are the customers – wants to avoid having the government steal their capital… really doesn’t bother me because I am not getting anything from this redistribution scheme… and socialist security and medifraid will be bankrupt long before I am able to get anyone of the money stolen from me back… so more power to ’em!

    Besides, even if the government was able to confiscate all the assets of all the muliti-billionairs in the country (not just income but assets) would run the govenment for only three or four years at the current rate of spending… so do I support keeping up this OPM Ponzi scheme??? No. I’ll just protect my assets and assure my Investors that I can protect their capital… and that’s how a business is run… else it goes out of Business.

    g

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