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Tag Archives: United States
Canada: Home of the Whopper
Architects of Burger King’s inversion claim it’s not about taxes
Burger King is rolling ahead with its plan to move to Canada. It confirmed Tuesday that it will purchase Tim Hortons, a Canadian coffee and doughnut chain, for about $11 billion, one of the biggest foreign acquisitions since 2012.
This makes Burger King one in a string of corporate deserters in recent years. According to new data provided by the Congressional Research Service, 47 companies have inverted in the last decade, including at least seven this year alone. These companies are able to dodge US taxes by moving their headquarters, but not their operations, to countries with lower corporate tax rates. So called “inversions” may save the companies a few bucks, but they could cost the US taxpayer tens of billions of dollars.
The Deal: Founded in Miami in 1954, Burger King operates more than 7,000 locations in the United States, but only 300 in Canada. In 1964, the Canadian fast food service Tim Hortons was founded in Ontario and now has more than one store per 10,000 Canadians. Burger King will shell out $11.4 billion for the coffee shop, but both will actually be controlled by 3G Capital, a Brazilian-US investment firm. According to the Wall Street Journal, Alex Behring, who is currently Burger King’s executive chairman and a managing partner at 3G Capital, will head the new company.
Although America has a top corporate tax rate of 35%, numerous multi-national corporations do not pay that much. Instead, U.S. corporations paid an average of 12.6%, according to the Government Accountability Office. Burger King also does not pay the top corporate tax rate, but has a tax rate in “the mid- to high twenties” according to Mr. Behring. While Burger King CEO Daniel Schwartz doesn’t “expect there to be meaningful tax savings,” Canada’s federal corporate tax rate is 15%.
Moving Forward: Burger King should reconsider its own bid for the company. Since the news broke, the public has denounced this newest corporate deserter. #BoycottBurgerKing is now commonplace on Twitter and Burger King’s Facebook was littered with comments threatening to never return. Senator Sherrod Brown added to that chorus: “Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders.”
When Walgreens announced its purchase of Alliance Boots, a European pharmacy, it received similar criticism, and it has since said that it will stay headquartered in the United States. They decided that paying their fair share was more profitable.
BOTTOM LINE: When more and more American companies move out of the U.S., ordinary Americans end up footing the tax bill. Companies employing the process of inversion are taking advantage of U.S. taxpayers and cheating the system, to the detriment of our workers and our economy. It’s beyond unpatriotic and it’s time for them to stop.
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Hard to Resist
More GOP-Led States Are Moving To Expand Medicaid
A successful first open enrollment period with 8 million enrollees. The uninsured rate at a record low 13.4 percent. Insurers clamoring to join state exchanges for next year. Health insurance premiums for 2015 beating expectations. The successes of the Affordable Care Act are clear.
Supporters of the law in competitive races have taken notice, and are increasingly running on, not from, the ACA. But they are not the only ones acknowledging the changing political landscape; the ACA’s opponents have also seen it, and are taking action. In particular, some GOP-led states who have been putting politics over people by opposing Medicaid expansion are now taking steps to accept it. Here are some of the latest to change their tune:
Pennsylvania: The Keystone State will become the 27th state, and the 12th Republican-led state, to expand its Medicaid program in accordance with the Affordable Care Act. The Obama Administration announced last Thursday that it had granted a waiver and reached agreement with the state to provide health care coverage to 500,000 low-income residents through private insurance. Gov. Tom Corbett (R), the deeply unpopular Pennsylvania governor, has previously fought against expansion but trails in his re-election bid by 25 points while 59 percent of voters support expanding Medicaid.
Tennessee: Gov. Bill Haslem indicated late last week that the state will likely submit a Medicaid expansion plan this soon. “I think we’ll probably go to [the Obama Administration] sometime this fall with a plan … that we think makes sense for Tennessee,” Haslem said. While he did not comment on any further details, the move could mean health coverage for 162,000 Tennesseans.
Wyoming: After initially rejecting Medicaid expansion that would provide health insurance to 17,600 low-income Wyoming residents, Gov. Matt Mead has now said he is now in negotiations with the Obama Administration to find a way to expand the program next year. The LA Times reports that “the reason for Wyoming’s wavering is clear: It’s money.” The state stands to save $50 million per year by expanding. Meanwhile, Wyoming hospitals are losing $200 million per year by treating people who lack insurance.
Another thing for these states, and all other conservative-led states who continue to deny health care to their low-income residents, to consider: they are sending hundreds of billions of taxpayer dollars to other states who are expanding Medicaid, and receiving nothing in return.
BOTTOM LINE: As candidates who support the ACA increasingly embrace it on the campaign trail, conservatives nationwide are downplaying their opposition to the law. In the latest sign, more conservative states are finally changing course by pushing forward with Medicaid expansion to provide health care to hundreds of thousands of low-income working people and save billions of dollars.
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Bill Gates: End your investment in private prisons
Immediately withdraw your $2.2 million investment in the GEO Group.
One of the world’s biggest social good foundations is contributing to one of society’s biggest ills — the private prison industry. The Bill and Melinda Gates Foundation Trust has invested more than $2 million in GEO Group, one of the largest and most abusive private prison corporations in the United States.
GEO makes a business of jailing those with the fewest resources, profiting from their labor, stripping them of their dignity, and leaching precious human capital from already-distressed communities.
GEO Group and other private prison companies have a perverse profit motive to drive criminal justice and immigration policy towards more incarceration of citizens and immigrants in prisons, jails, and immigrant detention centers. They spend millions of dollars — dollars provided in part by investors like the Gates Foundation Trust — lobbying local, state, and federal governments to institute longer sentences, to incarcerate more people for mi nor crimes, and to terrorize immigrant communities.
If that weren’t bad enough, GEO’s prisons are notorious for their awful treatment of prisoners. Accounts of sexual assault, physical abuse, medical neglect, rotten and inadequate food, forced signing of immigration papers, and death have been well-documented at GEO facilities. A federal judge called the inhumane conditions at GEO’s now-closed Walnut Grove Youth Correctional Facility, “a picture of such horror as should be unrealized anywhere in the civilized world.”
In light of this evidence, it is shocking that the Gates Foundation Trust would maintain its investment in the GEO group. The Gates Foundation prides itself on the good it does in the world. But this investment fundamentally contradicts the Foundation’s stated mission: to “ensure that all people — especially those with the fewest resources — have access to the opportunities they need to succeed in school and life.”
If enough of us speak out now, we’ll be able to create a powerful media narrative that exposes this contradiction and shames the Gates Foundation Trust to withdraw its investment.
Join Presente, Enlace, and 25 other organizations in calling on the Bill and Melinda Gates Foundation Trust to immediately withdraw its investment in the GEO Group.
Thanks!
–Presente.org
This petition was created on MoveOn’s online petition site, where anyone can start their own online petitions. Presente.org didn’t pay us to send this email—we never rent or sell the MoveOn.org list.
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Inequality hurts everyone NOT some …
| By CAP Action War Room
An Important New Report Argues Inequality Is Hurting U.S. Economic Growth, And It Isn’t The First
There are two refrains that we often repeat when describing our philosophy for economic growth: we need an economy that works for everyone, not just the wealthy few; and we need an economy that grows from the middle-out, not the top down. At the heart of both of those beliefs is the demand that our leaders address the growing economic inequality in this country that leaves the richest with an ever-growing share of our nation’s wealth, while squeezing the vast middle class. This inequality doesn’t actually hurt some while helping others — it weakens our overall economy and as a result hurts everyone.
A new report issued by economists at Standard & Poor’s Ratings Services agrees with these dire impacts of inequality. The report, entitled “How Increasing Inequality is Dampening U.S. Economic Growth, and Possible Ways to Change the Tide,” concludes that the widening gap between the wealthiest and everyone else is a key reason why our economic recovery is the weakest in the last 50 years. Pushing back against the oft-repeated and dead-wrong trickle-down argument on the right that a rising tide lifts all boats, S&P responds, “A lifeboat carrying a few, surrounded by many treading water, risks capsizing.”
This report is important because it comes from the business forecasting community, focused not on advancing new academic theories but on predicting for clients how the economy is working. It is far from the only voice, however, making the argument that income inequality is hurting economic growth. Here are a few other recent examples:
- The International Monetary Fund (IMF): In a report issued this February, IMF economists make the argument that continuing to ignore income inequality will harm economic growth. “Lower net inequality is robustly correlated with faster and more durable growth,” they write. It is “a mistake to focus on growth and let inequality take care of itself.”
- Billionaire Entrepreneur Nick Hanauer: Hanauer, who was the first nonfamily investor in Amazon.com, wrote the most popular article in Politico Magazine history, called “The Pitchforks Are Coming… For Us Plutocrats.” In the piece, he points out inequality doesn’t just hurt the economy, it creates political instability as well: “There is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out,” writes Hanauer. “You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None.”
- Nobel-Prize Winning Economist Joseph Stiglitz: Stiglitz wrote a whole book on this topic, aptly named “The Price of Inequality: How Today’s Divided Society Endangers Our Future.” One of several reasons he gives for why increasing inequality hurts growth is that it reduces people’s trust in the system. “People are not machines,” Stiglitz writes. “If they feel that they are being treated unfairly, it can be difficult to motivate them.”
- Economist and Best-Selling Author Thomas Piketty: In his 2014 best-seller Capital in the 21st Century, Piketty explains that wealth concentrating in the hands of a few at the top is not an accident in capitalism, but a feature. Governments need to intervene in order to prevent that concentration from weakening the economy and causing political instability.
- The Federal Reserve Bank. Sarah Bloom Raskin, who resigned from the Federal Reserve Board of Governors in March to become Deputy Treasury Secretary, believes inequality was the cause of the crisis and the source of the slow recovery: “because of how hard these lower- and middle-income households were hit, the recession was worse and the recovery has been weaker.”
BOTTOM LINE: The new S&P report that argues income inequality is hurting U.S. economic growth is an important reminder that we need economic policies that make sure everyone pays their fair share to help the economy grow from the middle-out. And it’s far from the only source to make that case: A stronger middle class means more workers, more consumers, and a better economic climate for everyone.
Be a Seed for Change 
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