The cross-border marriage between Burger King (US) and Tim Hortons (Canada) with the happy couple opting for a home in the North has really flipped people's switches in the US. The new buzz word is "inversions" and thank God for the Internet because in a paper world way too many trees would have to die just so that every pundit from Paris to Poughkeepsie can throw out his .02.
The Americans in the homeland are screaming for Something to be Done and Obama has come out swinging saying that he will do what he can to "discourage" American companies from marrying out and setting up shop in somebody else's tax jurisdiction. I mean, we can't have that, right?
Do the American People, their elected representatives and their President understand the utter hypocrisy of their position? I doubt it and I'm feeling frisky this morning (too much coffee?) so allow me to have some fun today at their expense.
Here's the argument three US lawmakers (including the now infamous Senator Reed) are making for strongly discouraging US companies from leaving the US :
“Inverted corporations take advantage of all the things American tax dollars provide – from tax credits for research and development, investments in transportation infrastructure, and strong patent and copyright protections..."Now just replace "American" in that sentence with "French", "German", "Japanese" or any other nationality. What about their tax base and talent? Any consideration whatsoever here? Not at all.
So when it's a foreign company (or talented migrant) that wants to set up in the US, then Americans slap themselves on the back and smugly point out that America is clearly still the most popular girl in high school and destined to be Prom Queen forever. But when the girl says, "Mom and Dad, I'm moving to Canada" because she thinks she can have a better HEA (Happily Every After) well, that's just wrong.
I'd have a lot more respect for the American "inversions are perversions" argument if its proponents took their position to its logical conclusion and said this to any company (or individual) wanting to move to the US from abroad,
"You know, that's just not fair to your home country and its taxpayers. You should stay home with your family and friends who have nurtured you from the cradle, invested in your education, and protected you as you grew and become successful. The world really would be a better place if all good boys and girls stayed home where they belong and we want to step up and lead the way. So here's your US certificate of incorporation and/or your Green Card. Thank you for thinking of us. Have a nice life."
For the best article I read about this (one that actually would be worth killing a tree or two), see Megan McArdle's Burger King and the Whopper about Taxes. Her point about the US tax system is well made. The US stoutly defends its unique citizenship-based taxation system in an residence-based taxation world. Frankly there is a certain insanity in the US position on this that says it's the rest of the world that needs to change and not the US. All I can say is, "Good luck with that."