CFIF has joined a broad coalition of fellow conservative and libertarian free-market organizations in…
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Image of the Day: Peril of a "Buy American" Medical Mandate

CFIF has joined a broad coalition of fellow conservative and libertarian free-market organizations in opposing any proposed "Buy American" mandates on medicines, because they would place unnecessary sourcing requirements upon medicines and medical imputs purchased with federal dollars.  That is the last thing that Americans need at the moment, not least because it doesn't single out China in the way that some falsely assume, and the just-released coalition letter is worth reading in its entirety here.

In that vein, however, this image helpfully illustrates some of the logic behind the letter:

[caption id="" align="aligncenter" width="574"] The Peril of a "Buy American" Order[/caption]

 …[more]

April 07, 2020 • 11:04 am

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Jester's CourtroomLegal tales stranger than stranger than fiction: Ridiculous and sometimes funny lawsuits plaguing our courts.
Warren Buffett Abandons Obama Print
By Timothy H. Lee
Thursday, August 28 2014
Since 2000, Canada has reduced its national corporate tax rate from 28% to 15%.

Agitated by the predictable consequences of their tax and regulatory agenda, liberals and the Obama Administration condemn the "economic patriotism" of "corporate deserters" who seek refuge by relocating operations beyond U.S. borders. 

This week, Burger King became just the latest target of their misplaced wrath, after announcing its acquisition of Canadian restaurateur Tim Hortons Inc. and that it will move its corporate headquarters to that lower-tax locale.  Senator Sherrod Brown (D - Ohio) went so far as to advocate a consumer boycott. 

One problem:  Burger King is actually owned by 3G Capital Management, a Brazilian private-equity firm.  Accordingly, if the Obama Administration or Senator Brown were taken at their word, "economic patriotism" would result in Burger King moving its operations south to Sao Paulo or Rio de Janeiro, not remaining in the U.S. 

Another amusing aspect to this kerfuffle is that Warren Buffett's Berkshire Hathaway Inc. will help finance the transaction. 

This is the same Warren Buffett who hypocritically and on false pretenses advocated higher taxes during the 2012 election campaign.  It was hypocritical because nothing stopped him from paying the 30% "Buffett Rule" for millionaires and billionaires he claimed to support, rather than the 17.4% rate he actually paid.  He also notoriously battled the IRS over disputed taxes in 2010 after the sale of a subsidiary.  As hedge fund partner and Buffett biographer Jeff Matthews summarized for The Wall Street Journal, "The gap between what he says about taxes for everyone else and what he does for himself and Berkshire has always loomed large." 

And as Heritage Foundation economist Stephen Moore pointed out at the time, Buffett was also factually incorrect in his assertions: 

“According to the Congressional Budget Office (CBO), middle-class families in 2007 (earning between $34,000 and $50,000) paid an effective 14.3% of their income in all federal taxes.  The top 5% of income earners paid 27.9% and the top 1% paid 29.5%.  And what about the highest earners?  Americans with annual incomes above $2 million paid an average of 32% of their income in federal taxes (the most recent year for which data are available).”

Those amusing angles aside, there's actually a very good reason that Canada was the chosen destination for corporate operations. 

The accounting firm KPMG recently released a comprehensive report entitled "Competitive Alternatives," which compared the tax competitiveness of ten of the world's largest and most advanced economies.  The report considered the array of taxes imposed on corporations, including income taxes, sales taxes, labor tax costs, property taxes, capital taxes and other forms.  Standing atop the list?  Proving once again that its reputation as some sort of socialist paradise is increasingly false, Canada: 

"Among the countries studied, Canada has the lowest Total Tax Index (TTI) at 53.6.  In other words, total tax costs in Canada are 46.4 percent lower than in the United States, which has a TTI of 100.0 and represents the benchmark against which all locations are scored." 

It should therefore come as little surprise to Senator Brown or the Obama Administration that Burger King would reach the decision it did.  Since 2000, Canada has reduced its national corporate tax rate from 28% to 15%.  And affirming the wisdom of that decision, Burger King shares rose nearly 20% following the announcement, while Tim Hortons shares increased 19%. 

Rather than maligning Burger King or supposed "corporate deserters," Senator Orrin Hatch (R - Utah) correctly observed that the real problem is America's outdated, uncompetitive and complex corporate tax code.  "Burger King's pursuit of an inversion," Hatch said, "only further underscores the arcane, anticompetitive nature of the U.S. tax code."  Specifically, our 40% combined federal and state corporate tax rate is the highest in the developed world.  Making matters worse, the U.S. is unique among advanced economies in taxing income earned overseas at the U.S. rate in addition to the local rate already paid in the nations where the income was actually earned. 

Meanwhile, the Obama Administration has suggested that it may once again take unilateral executive action to erect a metaphorical Berlin Wall preventing companies from fleeing our suffocating corporate taxes and federal overregulation.  That maneuver, and stubbornly refusing to work with Congress to reduce America's increasingly uncompetitive tax code, is far more "unpatriotic" than businesses relocating elsewhere in order to survive. 

When foreign businesses like Toyota opt to locate manufacturing or other operations in America rather than their own home countries, we justifiably celebrate them.  Yet when domestic companies respond to irrational and punitive U.S. tax and regulatory burdens by relocating, they are demonized. 

Here's the optimal course:  Reform our corporate tax code, lower rates and broaden the base.  By doing so, we can finally put this entire problem and unnecessary debate to rest, and persuade companies like Burger King to remain right here at home. 

Question of the Week   
Which one of the following pandemics caused the largest number of deaths in the 20th Century alone?
More Questions
Quote of the Day   
 
"In the end we were unprepared for what has happened, just as we were unprepared for 9/11. Administration after administration, over decades, gave lip-service to the possibility of a pandemic but made no real plans for all of the equipment necessary to be available -- we had no effective early-warning pandemic system, no stockpile of masks, no effective testing, no technology alliance for safety monitoring…[more]
 
 
—Mark Penn, Managing Partner of the Stagwell Group, Chairman of the Harris Poll, and Former Pollster and Adviser to President Clinton
— Mark Penn, Managing Partner of the Stagwell Group, Chairman of the Harris Poll, and Former Pollster and Adviser to President Clinton
 
Liberty Poll   

Have you or a member of your family contracted coronavirus or are having undiagnosed coronavirus symptoms?