What happens when you raise taxes on businesses? They leave:
Via Red State, in Mark Steyn’s column:
Last week, the donut chain Tim Hortons, which operates on both sides of the border but is incorporated in the state of Delaware, announced that it was reorganizing itself as a Canadian corporation to take advantage of Canadian tax rates.
As Red State points out,
Let’s just review a few facts.
o Tim Horton’s is mostly a Canadian-based operation (bit of an icon up there, particularly in Ontario); they may own some other brands, but I’m not sure and that might have changed.
o Canada’s corporate tax rate (now 21%) is lower than the U.S. rate (35%) – Prime Minister Harper, sensing an opportunity (particularly given the increased idiocy in Washington), has talked about reducing it further.
o Any profits earned in Canada but “repatriated” (sic?) to the U.S face that nutty double-taxation game that I’ve written about multiple times; Canada (like the rest of the world) doesn’t do double taxation.
So this just makes sense from a business point of view.
Get used to this news; we’ll be seeing a lot of them in the future.
Speaking of taxes, via Ed,
It’s not really that surprising that Tim Hortons would essentially reincorporate in Canada as it had divested itself of Wendy’s and was only signing contracts to share facilities with other American fast food outlets rather than buy them outright. And since its stock is down 25% it seems logical to do something that would boost the value of the dividend and the stock.
You’d think they’d learn (but we know they won’t).
Some years back, an Eastern-seaboard state decided it could raise a bundle of money by putting a “luxury tax” on yachts.
To nobody’s surprise but the taxers, yacht-builders moved out of the state. So they lost not only the tax receipts they thought they were going to get, but also those they had been getting before.