Breaking financial news today is Warren Buffett’s financing of Burger King’s buyout of the Tim Horton restaurant chain.  As part of this transaction, Burger King will move its corporate HQ to Canada, known as a Tax Inversion.  Tax Inversions are increasingly popular with U.S. based companies, while being increasingly unpopular with U.S. politicians, since the U.S. has the highest corporate tax rate in the developed world.    While Burger King asserts (with good reasoning) that this deal is not primarily about taxes, but the synergy of business product lines and international opportunities that will enable the combined company to grow more quickly, they nevertheless will face a lower tax rate in the future.

So Ohio’s own Senator Sherrod Brown is calling on a boycott of BK.

“Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders. Burger King has always said ‘Have it Your Way’; well my way is to support two Ohio companies that haven’t abandoned their country or customers,”

This is the classic case of our politicians creating a problem, and when the completely predictable consequences occur, they blame those that try to avoid the bad policies the politicians themselves have created.  Burger King didn’t give the US its highly uncompetitive tax rate; the politicians did.  And Burger King isn’t the one failing to do anything about the uncompetitive rate–even when, shockingly, both Republicans and Democrats agree on what needs to be done:  lower the tax rate and broaden the base (by closing corporate loopholes).  So Mr. Brown’s justification for the boycott?

“To help business grow in America, taxpayers have funded public infrastructure, workforce training, and incentives to encourage R&D and capital investment. Runaway corporations benefited from those policies but want U.S. companies to pay their share of the tab.”

Now its one thing to suggest that companies have benefited from government services (no doubt true), but its another thing to suggest they benefit in proportion to their costs, which is not likely.  Most government spending is not of the type that fits into the broader category of public goods and infrastructure, but rather much is income redistribution, military spending and interest on the debt.  Almost every American would say they’re not getting their money’s worth from what they pay in taxes.  At least everybody except Mr. Buffett, who famously suggests high income earners should pay even more in taxes.  So why is he profiting from a deal that will result in a corporation avoiding higher taxes?  Granted he was talking about a different tax (individual vs. corporate), but it does seem a bit…hypocritical.

Mr. Brown’s response, however, is exactly the wrong incentive to businesses.  This suggests that corporations better leave the U.S. while they can–that the politicians have no interest in solving the problems they created, but want to continue milking the taxpayers to pay for their desired spending on constituents.