Charles Munger, vice chairman of Berkshire Hathaway Inc., said corporate taxes should be cut and that there’s no reason to fault Burger King Worldwide Inc.’s plan to shift its headquarters to Canada, where rates are lower.
Anyone who thinks Burger King’s move is unjust is “stark raving mad,” Munger, 90, said in Los Angeles at the annual meeting of Daily Journal Corp., the publishing company where he is chairman.
Berkshire, led by Warren Buffett, committed $3 billion to help finance Miami-based Burger King’s planned takeover of Tim Hortons Inc., the doughnut maker with headquarters in Oakville, Ontario.
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President Barack Obama has criticized American companies that move to other nations in search of lower corporate tax bills. Burger King has said the acquisition was designed to expand sales rather than to gain a tax advantage, and that the shift to Canada makes sense because the country will be the largest market of the combined company.
More than 40 U.S. companies have reincorporated abroad since 1982. Future shifts, known as inversions, may cost the U.S. Treasury Department $19.5 billion in forgone tax revenue over the next decade, a congressional panel estimated this year.
“If I were running the world, I would probably have low corporate taxes and get at the well-to-do people in some other way, like consumption taxes,” Munger said.
Burger King, which is majority owned by Jorge Paulo Lemann’s 3G Capital, said Aug. 26 that it agreed to buy Tim Hortons for more than $11 billion. Omaha, Nebraska-based Berkshire will earn 9 percent annual interest on its investment and gets the option to buy a 1.75 percent stake in the combined company.
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