The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Burger King Is a Traitor. Really?

On September 2nd, 2014, posted in: Uncategorized by

money burgerBurger King is taking the Whopper across the border to Canada. Yep, that can happen. The corporation wants to acquire a restaurant chain called Tim Horton’s that focuses on morning fare, thus better rounding out the King’s ability to clog one’s arteries for the entire day versus just P.M. delights.

In normal times, this is a business story that creates discussion only inside the circles of investors, business-related media, and those of us who are data wonks specific to the ways of commerce. If you read the Wall Street Journal most days, this story interests you. Otherwise, your only real concern might be whether or not they are moving your favorite Burger King out of your neighborhood. That’s not happening — so everybody relax. Only the corporate headquarters are becoming Canucks.

But these aren’t normal times. The economy has been stuck in first gear with little reason to believe that there will be much formidable improvement for some time. The non-partisan government agency Congressional Budget Office (CBO) said in their most recent study that a continued slow go is coming up. Well, Burger King pays a ton of taxes to the federal government, and the “King” moving its permanent address north of the border means bye-bye to tax revenue to fund the feds. Less money for the feds to spend rankles a lot of folks and means even more of a slow-down in government spending — or at least it should.

The media have been mobilized, and the line in the sand has been drawn. Apparently, Burger King is at fault. Apparently, their fiduciary responsibility to their stockholders to grow the business and create a return on their investment is not why they exist. Apparently, they exist to pay the government a 35% tax rate and that’s just the way it is. Apparently, as a result of their proposed move, they have been labeled a defector. Pretty strong language — our media friends may want to look it up. The same advice goes for calling them “traitors.”  Some of us might like to call them “responsible capitalists.”

Really, in the world we live in today, a business that seeks to optimize profits through sound acquisition and reducing their taxation rate is called names. Really! Burger King is the bad guy. Apparently, we need a scapegoat to deflect our attention to the real problem — a lack of accountability on the part of our elected officials to change the tax code. TAXES ARE TOO HIGH ON BUSINESSES, and that leads to myriad problems related to spurring the economy to new heights. I’ve written about it before.

Because we always need a protagonist and antagonist in order to keep our minds off what is really going on, many on TV have pitted Burger King against the United States. That’s not it at all. Ugh!!!

I’ll bet you that Burger King will use the acquisition of Tim Horton’s to deploy the new restaurants into our great country, create more jobs and create economic energy for the communities lucky enough to get a Tim Horton’s. Saving tax dollars may also create investment in more Burger Kings across the U.S. as well. See, when one can invest in the community, one creates economic well-being. A “thank you” may be more in order.

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